Q. I heard there is a new law in New York City that covers retail and fast food establishments. What do I need to know?
A. Effective November 26, 2017, retail and fast food employers will be subject to strict new laws that govern scheduling. The law is meant to provide retail and fast food employees with more predictability around scheduling by requiring employers to provide schedules a certain amount of time in advance, and prohibiting on-call shifts, among other provisions. Retail employers are simply prohibited from violating the law, while the law provides that fast food employers are required to pay employees premiums of varying amounts for some violations.
In the retail context, the law covers any retail business with 20 or more employees that is engaged in the sale of consumer goods. Consumer goods are defined as products primarily for personal, household, or family purposes, such as appliances, clothing, electronics, groceries, and household items.
Employers are required to provide employees with a written work schedule at least 72 hours before the first shift on the work schedule. In addition, employers will be prohibited from: (1) scheduling an employee for an on-call shift; (2) canceling a regular shift within 72 hours of the scheduled start of the shift; (3) requiring an employee to work with fewer than 72 hours’ notice, unless the employee consents in writing; and (4) requiring an employee to contact his/her employer to confirm whether to report for a regular shift fewer than 72 hours before the start of a shift.
The law permits employees to trade shifts. Moreover, employers may change schedules with fewer than 72 hours’ notice in the case of certain emergencies.
In the fast food context, the law will cover any fast food establishment whose primary purpose is serving food or drink, where patrons order and pay before eating, and that is part of a chain that has 30 or more establishments nationally.
Unlike in the case of retail establishments, fast food employers may make changes to work schedules. But it will cost them money to do so.
Employers are required to provide employees with at least 14 days’ notice of their schedules. If employers make changes to the work schedule with less than 14 days’ notice where additional hours or shifts are added, or the date, start time, or end time is changed with no loss of hours, the employer must pay the employee $10 for each such change. If the employer makes changes to the work schedule with less than 14 days’ notice where hours are subtracted from a shift or a shift is cancelled, the cost to the employer rises to $45 for each such change.
If changes are made with less than 7 days’ notice but with no loss in hours, the employer must pay the employee $15 for each change. If changes are made with less than 7 days’ notice and the change results in lost hours or a shift is cancelled, the employer must pay the employee $75 per change.
Like in retail, fast food establishments may make changes in the case of certain emergencies. In addition, the employer may make changes without penalty if the employee requests the change in writing, or if employees voluntarily trade shifts subject to an existing employer policy.
Fast food employers will also be prohibited from requiring employees to work consecutive shifts that involve both the closing and opening of a restaurant. Employers must provide a minimum of 11 hours of time off between shifts when the first shift ends on the previous calendar day or spans two calendar days. The law provides an exception if the employee requests or consents to work such hours in writing, but even in such a scenario, the employer must pay a premium of $100 for each such shift.
Finally, the law requires fast food employers to offer shifts to current employees before hiring additional employees. The law establishes a specific procedure for offering the shifts, which involves posting a notice with detailed information about the shifts. Employers are required to offer hours to current employees until the point at which the employer would be required to pay overtime, or until all current employees have rejected available hours, whichever comes first.
Recommended Action for Compliance
As is clear from the description above, the law is extremely onerous for retail and fast food employers, and particularly so for fast food employers. Given the high premiums employers must pay for violations of the new law, it is essential for employers to begin preparing for the law significantly in advance. Employers should conduct a detailed review of their scheduling procedures and systems, and revise them to make scheduling more predictable (and in line with the upcoming law). Given the unpredictable nature of the fast food industry, particularly in New York City, it will be nearly impossible for employers to avoid paying any premiums under the law. However, with advance preparation, employers can certainly take steps to minimize the premiums that will be paid.
We expect that many employers will take the potential premiums into account when setting hourly pay rates for those employees who are paid above the minimum wage. Employers who would otherwise pay a higher hourly rate may decide to pay a lower rate to account for the potential premium payments.
While the law provides for many exceptions based on consent (as well as request) from employees, consent is often an amorphous concept in the world of employment litigation. We strongly recommend obtaining written consent (rather than verbal consent) so there is a record. It is unclear under the law whether employers must get written consent for each instance, or whether a blanket written consent suffices. To balance administrative ease and risk management, we recommend having a blanket written consent form that each employee can fill out (with check boxes for the various kinds of consent), and then if possible, confirming each instance of consent via email or text. It is a good idea to partner with an employment lawyer to ensure that your consent forms are in compliance.