On November 22, 2022, the Los Angeles City Council unanimously passed the Fair Work Week Ordinance (“FWWO”). Set to take effect in April 2023, the new law imposes significant requirements on retail employers in the City of Los Angeles with respect to both scheduling and hiring. It follows in the footsteps of similar predictive scheduling laws already on the books in other major cities, including San Francisco, Seattle, New York City, Chicago and Philadelphia.
Although the FWWO is bad news for retailers, its scope is relatively narrow. To be covered, an employer must (1) be identified as a retail business by the North American Industry Classification System and fall within retail trade categories 44 through 45, and (2) have 300 or more employees globally (including employees placed through a temporary service or staffing agency, employees of the employer’s subsidiary, and some franchise employees). Any employee who qualifies for minimum wage and performs at least two hours of work in a workweek in the City is covered by the FWWO.
Some of the FWWO’s more notable provisions include the following:
- Two Week Notice Requirement for Work Schedules. Under the FWWO, employers will be required to notify their employees of their work schedule at least 14 calendar days before the start of the work period, either by posting the schedule in a conspicuous and accessible place in the workplace or by providing the schedule electronically to employees. Any subsequent changes to an employee’s work schedule must be made in writing (either by posting or electronic transmission to the employee(s)), and employees can decline any hour, shift, or work location changes not included in their original work schedule. On the other hand, if an employee agrees to a schedule change, they must do so in writing.
- Predictability Pay. Under the FWWO, an employee is entitled to predictability pay for each change to a scheduled date, time, or location of the employee’s schedule with less than 14 days’ advance notice. Where an employee agrees to a change to their schedule after its posting, and the change results in either no loss of time or additional work time exceeding 15 minutes, the employer must pay the employee one additional hour of pay at the employee’s regular rate for each change. If an employer reduces the employee’s work time from what was listed in their schedule by 15 minutes or more, the employer must pay the employee one-half their regular rate of pay for the time the employee does not work (e., ½ the employee’s regular rate for the period that the employee would have worked before the schedule change). Predictability pay is not required where: (1) the employee requests the schedule change, (2) the employee voluntarily accepts a schedule change made by the employer due to absence of another employee, (3) the employee accepts additional work hours that were offered by the employer, (4) the employee’s work hours are reduced because the employee violated the law or the employer’s lawful policies or procedures, (5) the employer’s operations are affected by law or force majeure, or (6) the extra hours the employee worked require the payment of overtime wages.
- Existing Employees’ Right of First Refusal for Additional Work. In addition to predictable scheduling provisions, the FWWO also limits employers’ ability to hire additional workers to meet unanticipated demand. Specifically, where additional work hours become available, employers must offer the additional hours to current employees before hiring any additional employees (or going through a staffing agency or temporary service) to do the work if (1) one or more current employees are qualified to do the job, and (2) the employer would not be required to pay overtime pay to the current employee that takes on the additional work.
- Rest Between Shifts. Employers will need an employee’s written consent to schedule the employee for a shift that begins less than ten hours from the end of the employee’s last shift. In addition, if an employee is scheduled for a shift that begins less than ten hours after the end of their last shift, they must be paid a time and a half premium.
- Good Faith Estimates of Work Schedules. The FWWO requires covered employers provide a written “good faith estimate” of an employee’s work schedule upon hire, and within ten days of an existing employee’s request. Although the good faith estimate is not legally binding, if the employee’s actual work hours substantially deviate from the estimate, the employer must have a documented legitimate business reason that was unknown at the time the good faith estimate was provided.
In addition to the above, the FWWO also imposes notice and recordkeeping requirements, and prohibits employers from retaliating against any employees for exercising rights under the new law. Employers in the retail industry should examine their scheduling practices carefully and consult with counsel before the FWWO takes effect on April 1, 2023.
Source: Proskauer Rose LLP – Philippe A. Lebel and Morgan Peterson