Effective August 2015, the Predictable Work Schedule law (“PWSL”) requires “formula retail” businesses with forty (40) or more locations worldwide, and twenty (20) or more employees in San Francisco, to provide predictable schedules, and two weeks’ advance notice for any change in an employee’s schedule, as well as provide greater protections for and equal treatment of part-time employees. This new ordinance will require substantial revisions to most formula or retail stores’ operations and hiring practices in California in these key ways:
- Requires set schedules, with extra pay for changes in schedules on short notice;
- Requires certain protections for part-time employees;
- Provides additional protections for on-call shifts; and
- Provides protections to workforces in the event of a sale of the business.
A “formula retail” business is one that has two (2) or more of the following features: a standardized array of merchandise, a standardized facade, a standardized decor and color scheme, uniform apparel, standardized signage, a trademark or a servicemark. This can include retail stores, franchises, and chain restaurants.
Under the new law, a covered “formula retail” business in San Francisco must:
- Provide an employee with a description of their work schedule and an estimate of the minimum hours and days they are expected to work each month, including on-call shifts, prior to the start of their employment (note: the employee may request modifications of the proposed work schedule, and the employer must consider and respond to the request);
- Post work schedules in a conspicuous location or provide them electronically (so long as the employees are given access to the electronic schedules at work) at least two (2) weeks in advance;
- Provide notice to employees either in person or through appropriate forms of electronic communication (e.g. phone, e-mail, or text) of any change or cancellation to the employee’s schedule, which can trigger “predictability pay” as described below;
- Pay part-time and full-time employees with the same job at the same hourly rate;
- Provide part-time employees with the same access to time off, and the same eligibility for promotions as their full-time equivalents;
- Offer, in writing to the employee or by posting in a conspicuous location in the workplace where notices to employees are customarily posted, any extra work hours to current qualified part-time employees and provide the qualified part-time employees with seventy two (72) hours to accept the additional hours before hiring new employees or subcontractors or staffing agencies to perform any additional work; and
- Compensate employees who are scheduled to be “on-call” for a particular shift but are not called in to work with “On-call Compensation” as described below.
If a covered employer makes any changes to the posted schedules (i.e., cancels the shift or moves the shift to another date and/or time), the employer must pay the employee with a certain amount of pay in addition to the hours worked, referred to as "predictability pay." Predictability pay is as follows:
- One hour of pay in addition to the hours worked if changes are made to the work schedule with less than seven (7) days notice, but more than twenty-four (24) hours notice;
- For changes made with less than twenty-four hours (24) notice, the employer must pay the employee either:
- two (2) hours of pay in addition to the hours worked if the shift is four (4) hours or less; or
- four (4) hours of pay in addition to the hours worked if the shift is more than four (4) hours.
There are certain exceptions, which include natural disasters, public utilities failures, voluntary employee shift-trading, and the unexpected unavailability of another employee when the employer did not receive at least seven (7) days' notice.
Covered employers are required to compensate employees who are scheduled to be "on-call" for a particular shift but are not called in to work with either:
- Two (2) hours of pay for shifts of four (4) hours or less; or
- Four (4) hours of pay if the shift is more than four (4) hours.
Employee Treatment when Selling a Formula Retail Business
If a "Formula Retail" business is sold, the new employer must retain, for ninety (90) days, all employees who worked for the former employer for at least six (6) months prior to the sale. If the new employer determines it needs fewer employees, the new employer must retain the employees by seniority based on their date of hire. However, this requirement does not apply to supervisory or managerial employees.
A public notice of change of control must be posted at the business within twenty-four (24) hours of the date of the transfer of ownership. Additionally, the new employer must provide written notice to any and all retained employees about their rights.
The law also requires employees to retain employee work schedules and payroll records for three (3) years and post a notice of the law in a conspicuous area at the workplace where it can easily be viewed during the workday.
Action Item: Covered San Francisco formula or retail businesses should ensure their on-call and scheduling policies comply with the new law as well as ensure that employees are receiving predictability pay and on-call compensation where required.