The Seattle Office of Labor Standards (“OLS”) has released proposed rules implementing the Secure Scheduling Ordinance. The Ordinance takes effect on July 1, 2017 and requires large retail and food service employers in Seattle to provide employees with annual estimates of work hours, advanced notice of schedules, premium pay when a posted schedule changes or when shifts are scheduled too close together, the right to provide input into their work schedule, and the opportunity to work additional, available hours before new employees are hired. Employers and all members of the public may provide comment on the proposed rules until March 28, 2017.
Employers Invited to Comment on the Proposed Rules
The proposed rules provide more detail about the requirements of the Ordinance, define key terms, and provide examples. For a detailed description of the Ordinance, see our previous advisory.
While several of the proposed rules provide employers with more flexibility and discretion, others create additional burden and have the potential of increasing employer costs. We encourage employers and their associations to carefully review the rules and submit any comments or questions to OLS. Comments can be submitted via mail, email, or telephone. OLS will consider comments and may revise the rules before issuing a final version, which is expected to be released in April.
Covered Employers The Ordinance applies only to (1) retail establishments with 500 or more employees worldwide; (2) quick and limited food service establishments with 500 or more employees worldwide, and (3) full-service restaurants with 500 or more employees worldwide and more than 40 locations worldwide. The worldwide employee count includes all employees in a chain, franchise network, or integrated enterprise. Therefore, employers with a single, small Seattle location must comply with the Ordinance if their worldwide operations meet the threshold. However, the Ordinance applies only to those employees physically working in Seattle.
Here is a summary of some of the key proposed rules for employers:
Proposed Rules Expanding Employer Obligations or Limiting Employer Flexibility:
- Employee Requests Due to a “Major Life Event”: If an employee requests a schedule change due to a “major life event,” the employer must grant the request unless it has a bona fide business reason to deny the request. The proposed rules provide broad definitions of what constitutes major life events, and restricts the employer from questioning the employee on the facts supporting the “major life event.” Although an employer may request information to verify the occurrence of a major life event, the employee may choose what type of documentation to provide, and may choose to submit a statement written and signed by the employee explaining the circumstances and the reason for the schedule change request. The employer is prohibited from inquiring further.
- Good Faith Estimate of Hours: Employers must provide employees with a “good faith estimate” of the median number of hours the employee is anticipated to work each year, divided into three-month increments. The employer must revise the good faith estimate annually and when there is a “significant change” to the employee’s work schedule, which is defined as a 30 percent or more difference between the estimate and actual median number of scheduled hours over a three-month period.
- Interactive Process: If there is a “significant change” to an employee’s schedule, the employer must engage in an interactive process with the employee to discuss the change. The proposed rules state that this process should begin within one week of the employer learning of the “significant change,” and generally must be completed within three weeks.
- Exceptions to Premium Pay Requirement: Under the Ordinance, an employer is required to provide “premium pay” in connection with changes to an employee’s schedule that occur after the advanced-notice period (e.g. up to one hour of additional pay if hours are added to an employee’s schedule or one-half the employee’s rate of pay for each hour subtracted). The Ordinance contains several exceptions to the premium pay requirement. The proposed rules provide that employers who wish to use the “mass communication” or “in-person group communication” exceptions must “convey” that accepting the offer of additional hours is voluntary and employees have the right to decline and that the employer is not required to pay premium pay for the additional hours. For a mass communication, employers must also specifically convey that it is a “mass communication.” However, beyond that, the proposed rules do not contain specific language that must be used or describe how employers should “convey” this information.
- Offering Additional Hours to Employees on an “Access to Hours” List before Hiring New Employees: Before an employer can hire a new employee, it can either post the job internally and wait three days to see if a current employee wants the job or extra hours, or, alternatively, it can create an “access to hours” list and offer the job or extra hours to all employees on the “access to hours” list. If those employees decline the job or hours, the employer can immediately move forward with hiring externally. Employers who wish to use the “access to hours” list option can maintain one list or position-specific lists, but are required to include all employees on all lists regardless of qualifications or current position held, unless the employee opts-out of being included on any list. For example, a restaurant may maintain a “server” list and a “dishwasher” list, but must include all employees (who have not opted out) on both lists. This ensures that all employees will be aware of opportunities for hours, including possible promotions or job changes.
- Limits on New Employees from Hiring Programs: Employers may hire new employees through approved hiring programs affiliated with a government entity or non-profit organization without first offering those hours to existing employees, but the exception is limited to either 15 percent of all the employer’s covered employees in Seattle or 15 percent of the employer’s covered employees at the relevant location in Seattle. The proposed rules do not state whether the employer can hire the greater of those two numbers or is limited to the lesser of the two.
Proposed Rules Allowing Employer Discretion or Addressing Technical Questions Raised by Employers
- Employee Coverage: The proposed rules clarify that the Ordinance “does not cover employees who work in hourly administrative or professional, non-customer facing positions.” This resolves an open question of whether employees who work in the “back office” – such as HR or accounting – would be covered. At this point, they are not.
- Scheduling Employee After Transfer or Schedule Change Request: The proposed rules clarify that an employer can immediately place an employee on all posted schedules – without 14 days’ advanced notice – in the following situations: upon hire or assignment from staffing agency; upon an employee’s return from an authorized leave of absence; upon the approval of an employee’s schedule change request; or upon job transfer or promotion.
- Rounding Hours for Computing Premium Pay: The proposed rules provide that employers may use their usual and customary hours rounding practices. As a result, premium pay may be based off the rounded time, not the actual clock-out time. (Many employers do not use rounding of hours; those that do should ensure that their rounding practices comply with wage and hour laws, which contain specific, narrow requirements).
- 15-Minute Grace Period for Premium Pay: The proposed rules provide for a 15-minute grace period – after the employer’s usual rounding practice – before premium pay must be provided. For example, if an employee stays ten minutes late to finish assisting a customer, he or she will not be entitled to premium pay.
- Pro-Rated Premium Pay for Changes Adding Less Than One Hour: If an employer adds less than one hour to an employee’s schedule, premium pay may be prorated. For example, if an employee is asked to stay thirty minutes late, the employer is required to pay only thirty minutes (not one hour) of premium pay.
- “Scheduled Rate of Pay”: The proposed rules clarify that the “scheduled rate of pay,” which is used to calculate premium pay, is the employee’s rate of pay at the beginning of the affected shift. For example, if the employer adds or subtracts hours to a shift for which an employee would earn overtime pay at the beginning of the shift, any premium pay owed will be calculated at the overtime rate. If the employer adds or subtracts hours to a shift that the employee would be eligible for overtime or holiday pay midway through the shift (but normal hourly rate at the beginning of the shift), premium pay owed will be calculated at the employee’s normal hourly rate.
Conclusion Seattle’s Secure Scheduling Ordinance will likely have a significant impact on the operations of covered employers. The proposed rules are not yet final, and employers are encouraged to carefully review them and provide thoughtful feedback to help Seattle understand the practical effect of these new regulations. Comments in support of or opposition to the Secure Scheduling Ordinance rules are due to OLS before March 28, 2017. Please feel free to contact us with questions or if you need assistance.