Retail employers beware: New York City’s predictive scheduling law went into effect on November 26, 2017, and now New York State is now getting in the mix. The New York State Department of Labor (“NYSDOL”) recently released draft regulations that would amend the rules for scheduling employees covered by the Minimum Wage Order for Miscellaneous Industries and Occupations. The NYSDOL comment period recently came to a close on January 22, 2018. Likely on the heels of the NYSDOL’s issuance of a final rule, we break down what employers need to know. But before diving into the proposed NYSDOL draft regulations, let’s recap the New York City predictive scheduling law that recently went into effect.
New York City Predictive Scheduling Law
On November 26, 2017, New York City’s “Fair Workweek” legislation went into effect, which is a collective of laws aimed to protect fast food and retail workers. This blog focuses on the provisions for retail workers. The following Q+A provides an overview of the law’s key provisions applicable to retail businesses:
- Does the new law apply to all retailers? No. The law applies to “retail businesses” which are defined as entities with 20 or more employees engaged primarily in the sale of consumer goods at one or more stores within New York City.
- Does the new law apply to all employees? Almost all. This law applies to full-time, part-time, and temporary workers. This law does not apply to employees covered under a valid collective bargaining agreement.
- What kind of notice is required? Employers must provide each individual employee with a final schedule at least 72 hours before the employee’s schedule begins. Employers can provide employees with their schedules in the manner in which they usually contact employees so text or email works. Employers must also post the schedule in-store in an area where all employees can view it.
- On-call outlawed? Yes. What used to be a standard industry practice is now outlawed; an employer cannot require an employee to call in fewer than 72 hours before a shift beings to determine if he or she should come to work.
- Can you add a shift? Not with less than 72 hours’ notice. However, this does not prohibit an employer from asking an employee if he or she would be willing to do so. If the employee is willing, the employer must obtain the employee’s written consent.
- Can you cancel a shift? Not with less than 72 hours’ notice except under limited circumstances including: 1) threats to employees or the employer’s premises; 2) public utility failure; 3) shutdown of public transportation; 4) fire, flood, or other natural disaster; or 5) a government-declared state of emergency.
- I have to keep what for how long? An employer must retain employee work schedules for at least three years. An employer is also required to provide employees with their work schedules for any previous week worked for the past three years within 14 days of the employee’s request.
This law creates a private right of action for employees seeking to enforce their rights. Employees have the option of filing a claim either with the New York Department of Consumer Affairs (“DCA”) or directly in court. Employers are subject to penalties equal to the greater of $500 for each affected employee or the employee’s actual damages.
Ok, We Get the Law but How Do We Implement This in Real Life?
Step 1: You need to draft and distribute a predictive scheduling policy. I know—all blogs have a bullet point recommendation stating that an employer must draft/revise their HR policies. Let’s go a step further with identifying exactly what the HR policy should contain. The policy should first and foremost identify employee rights under this new law, including their right to file a complaint either with the DCA or in court. The policy should also identify how an employee will be sent their schedule as consistency is key. In addition, the policy should identify the process for requesting prior schedules (does the request go to HR or the store manager?) including how much time an employer has to comply with the request.
Step 2: Train any employee who deals with scheduling. Whether retail businesses violate this law will boil down to whether the employees who are responsible for scheduling understand and implement the law.
Step 3: More tips.
- Implement a notice system that can be archived. Although the law permits an employer to notify an employee of their schedule via text, the chances that this communication will be archived is slim. Therefore, implement a system, such as notice via email, which you can easily archive.
- Conduct an Audit. We are two months in and this law is complicated. To assess compliance, employers should conduct an audit of their retail stores. This provides the opportunity to course correct at an early stage if necessary. This is especially important since penalties for non-compliance can be steep, especially with repeat violations.
New York (State) of Mind
While New York City’s predictive scheduling laws target retail and fast food employers only, the NYDOL recently issued proposed predictive scheduling regulations that are far more expansive (Link). The proposed rule would revise the “call-in pay” requirements of the Minimum Wage Order for Miscellaneous Industries and Occupations (12 NYCRR Part 142 §§ 142-2.3 and 142-3.3). The proposed rule would apply to all industries and occupations that are not exempt from the minimum wage law, and that are not covered by a separate minimum wage order.
At present, the current Minimum Wage Order requires an employer to pay an employee four hours of call-in pay if the employee reports to work and is sent home early. The new proposed rule adds other scenarios when call-in pay is required, including:
- Four hours of call-in pay must be paid to an employee who is required to be on call to report to work (e.g., if the employee is on-call but doesn’t end up working);
- Four hours of call-in pay must be paid for shifts that are cancelled less than 72 hours before the start of the shift;
- Four hours of call-in pay must be paid when an employee is required to contact an employer less than 72 hours before the start of a shift to find out whether to report to work (on-call pay); and
- Two hours of call-in pay is required when an employee is scheduled for a shift that is scheduled less than 14 days before the start of the shift.
The manner in which an employer calculates call-in pay depends upon whether the pay is for hours actually worked. For hours actually worked, employers must pay an employee his or her regular rate or overtime rate of pay, minus any allowances. Payments for hours not actually worked are calculated at the basic minimum hourly rate with no allowances. Therefore, in the scenario where an employee is expected to be on call but never gets called in, an employee would receive four hours at the basic minimum hourly rate. In the scenario where an employee works a shift that was not scheduled 14 days in advance, an employee would be entitled to two hours at the basic minimum hourly rate in addition to any wages earned during the shift.
Although the proposed rule will not doubt increase costs for employers, the proposed rule does not apply to several categories of employees including:
- Employees in the hospitality, building service or agriculture industries
- Employees whose weekly wages exceed 40 times the applicable basic hourly minimum wage rate, such as highly compensated employees
- Employees who are subject to a collective bargaining agreement that covers call-in pay
- Exempt, executive, administrative and professional employees
While initially subject to a 45-day comment period, the NYDOL extended the comment period to January 22, 2018. Stay tuned for the final rule.
While we have explained what is and what may be, no doubt employers’ heads are spinning. Employers should be on the lookout as this is a legislative trend that is in no way limited to New York.