On May 30, 2017, New York City Mayor Bill de Blasio signed a legislative package of five bills, commonly referred to as the “Fair Work Week” legislation. The laws are primarily concerned with scheduling predictability for NYC retail and fast food restaurant workers and take effect on November 26, 2017.
Covered Employers and Employees
“Fast Food Establishment” is one: (i) that has as its primary purpose serving food or drink items; (ii) where patrons order or select items and pay before eating and such items may be consumed on the premises, taken out, or delivered to the customer’s location; (iii) that offers limited service; (iv) that is part of a chain; and (v) that is one of 30 or more establishments nationally (including franchisors and franchisees that own or operate 30 or more establishments in the aggregate).
“Retail Business” is defined as any entity with 20 or more employees engaged primarily in the sale of “consumer goods” at one or more stores within the city. Consumer goods means “products that are primarily for personal, household, or family purposes, including but not limited to appliances, clothing, electronics, groceries, and household items.” Additionally, an employer that operates a chain business must count the total number of employees in the group of establishments.
For purposes of the Fair Work Week laws pertaining to work schedules and shifts (the “scheduling laws”) at fast food establishments, the definition of “fast food employee” excludes salaried employees. In the law within the Fair Work Week package that provides for pay deductions from fast food employees for not-for-profit organizations (the “contributions law”), however, the definition of “fast food employee” does not exclude salaried employees. There is also no exclusion for salaried employees in the definition of “retail employee.”
Retail Employers – On-Call Scheduling
For retail businesses, the Fair Work Week legislation focuses on providing employees with at least 72 hours’ notice of when they will need to report to work. The legislation prohibits the practice of “on-call scheduling” in which a retail employee is scheduled for an “on-call shift” during which the employee must be available to work but will not necessarily be given the opportunity to work. Employers may not require retail employees to either contact the employer or wait to be contacted by the employer fewer than 72 hours before a shift to confirm whether he or she must report to work.
Employers also may not cancel an employee’s shift with fewer than 72 hours’ notice, or require an employee to work with less than 72 hours’ notice without the employee’s written consent. The legislation contains a few limited exceptions: for employee requests for time off, employees who trade shifts with one another, and specified situations in which the employer’s operations cannot take place.
In addition, retail employers will be required to provide employees with a written work schedule and post, in a location accessible and visible to all employees, the work schedule for all employees at that location at least 72 hours prior to the start of the first shift on the schedule. As changes occur, retail employers will be required to update the schedule and directly notify affected employees if there are any changes to the schedule. The employer will also be required to transmit the schedule electronically if it regularly uses electronic means to communicate scheduling information.
The legislation exempts retail employees covered by a valid collective bargaining agreement (CBA) that addresses scheduling as long as the provisions of the law are expressively waived in the CBA and the CBA addresses employee scheduling.
Fast Food Employers – 14-Day Notice, Time Between Shifts & Additional Shifts
Providing more predictability for employees and limiting employer flexibility, the legislation requires fast food employers to provide new hires with a “good faith” written estimate of the employee’s weekly hours for the duration of his or her employment and the expected dates, times, and locations of those hours, and to provide updated good faith estimates as soon as possible after long-term or indefinite changes occur. Fast food employers must also provide employees (directly and by posting visibly to all employees) with work schedules for periods of at least seven days, at least 14 days in advance. Seven-day work schedules must contain all anticipated regular shifts and on-call shifts the employee will work or be required to be available to work. If the employer changes a work schedule, it must update the schedule within 24 hours and provide the revised written schedule to the employee. Notably, an employee of a fast food establishment may decline working additional hours that were not included in the original schedule. An employee’s consent to working additional hours must be recorded in writing at or prior to the start of the shift.
Schedule changes with less than 14 days’ notice must be compensated. The affected fast food employee will be entitled to a “schedule change premium” in an amount ranging from $10 to $75, depending on the number of days’ notice the employee received and the nature of the schedule change. Schedule change premiums will be highest when less than 24 hours’ notice is provided and hours are subtracted from a shift or the shift is cancelled. Certain exceptions will allow covered employers to make schedule changes without paying a premium.
The legislation also prohibits such employers from requiring fast food employees to work shifts that have fewer than 11 hours between them when the first shift ends on the previous calendar day or spans two calendar days. The employer will be required to compensate the affected employee an additional $100 for such scheduling, unless the employee either requests or consents to these work hours in writing.
In addition, the law requires that a fast food employer offer additional work shifts to existing fast food employees before hiring any new employees or staffing through subcontractors. After the employer has satisfied posting requirements specified in the legislation, advising employees of the available shifts and certain other information, if existing employees, first at that location and then at other locations, reject the additional shifts, or if the employer would be required to pay the existing employees overtime for the additional work, the employer may then hire additional employees.
Payroll Deductions for Voluntary Contributions to Not-For-Profit Organizations
The legislation further requires fast food employers to process payroll deductions for voluntary contributions to certain registered not-for-profit organizations upon an employee’s written or electronic authorization. The employee’s written authorization for the deduction, which can be provided to the fast food employer either by the employee or the non-profit, will be required to contain certain information, including a statement notifying the fast food employee that the contributions are voluntary and revocable at any time by submitting a revocation to the not-for-profit. While unions are explicitly precluded from seeking contributions under this law, the law otherwise broadly defines a “not-for-profit” organization as an entity organized under the not-for-profit laws of the jurisdiction of its incorporation. The not-for-profit will have to be registered with the “office of labor standards,” which is housed in the Department of Consumer Affairs as the Office of Labor Policy and Standards (“OLPS”).
Notice & Recordkeeping
Pursuant to the Fair Work Week legislation, the director of the OLPS will have to publish posters detailing the rights and protections created by the legislation, which will be available on the City’s website. Every fast food and retail employer will be required to post a copy of the notices applicable to its workforce in a conspicuous location. And if at least five percent of the workforce at a covered job site speak a language other than English, a notice of the scheduling laws will also be required to be posted in that language.
Employers covered under the legislation will be required to retain records demonstrating compliance with the scheduling laws for three years and records demonstrating compliance with the contributions law for two years.
The Fair Work Week legislation also makes it illegal for employers to take any adverse action against an employee for exercising or attempting to exercise his or her rights under these new laws. The legislation defines taking an adverse action to include “threatening, intimidating, disciplining, demoting, suspending or harassing an employee, reducing the hours or pay of an employee, informing another employer that an employee has engaged in activities protected by this chapter, and discriminating against the employee, including actions related to perceived immigration status or work authorization.”
Enforcement & Penalties
The director of the OLPS will have the authority to administratively enforce the legislation. Administrative remedies may include penalties in amounts specified in the legislation. In addition, New York City’s Corporation Counsel is permitted under the legislation to initiate in any court of competent jurisdiction any action or proceeding that may be appropriate or necessary to secure compliance with the scheduling laws, including actions for injunctive relief. The legislation also establishes a private right of action for any person, including any organization, to sue for violations of most of the legislation’s provisions.
Outlook & Conclusion
Significantly, there has been speculation that the Office of the Governor of the State of New York is in the process of drafting statewide legislation that would both benefit employees in these industries throughout the State and preempt the City measures.
New York City retail and fast food employers should ensure compliance with all local legislation, paying especially close attention to areas where state and local requirements differ from federal requirements.