New York City Passes Wide-Ranging Legislation Dictating How Retail and Fast Food Establishments Schedule Workers

On May 30, 2017, New York City Mayor Bill de Blasio signed into law a package of legislation regulating how retail employers and fast food establishments in New York City schedule their employees to work. Each of these laws becomes effective on November 26, 2017. In sum, these new laws: (i) prohibit “on-call” scheduling for retail employees and require retail employers to provide at least 72 hours’ notice of schedules to their employees; (ii) prohibit fast food employers from scheduling fast food employees to work a closing and opening on consecutive shifts with fewer than 11 hours between shifts; (iii) require fast food employers to offer open shifts to current fast food employees before hiring other workers or subcontractors; (iv) require fast food employers to pay premium wages to fast food employees if their shifts are changed less than 14 days in advance of the shift; and (v) permit fast food employees to make voluntary contributions to not-for-profit organizations of their choice through payroll deductions.

Key aspects of the legislation are summarized below.

Scheduling for Retail Employees

On-Call Scheduling (Intro 1387)

This law will essentially prohibit retail employers from scheduling retail employees to be “on-call” (i.e., to be available to work, to contact the retail employer, or to wait to be contacted by the retail employer to determine whether the retail employee must report to work). For purposes of this law, “retail employer” is defined as a retail business with 20 or more employees that is engaged in the sale of consumer goods, which are products that are primarily for personal, household, or family purposes, including, but not limited to, appliances, clothing, electronics, groceries, and household items. 

Specifically, the law bans the following: (i) scheduling a retail employee for any on-call shift; (ii) canceling any regular shift for a retail employee within 72 hours of the scheduled start of such shift; (iii) requiring a retail employee to work with fewer than 72 hours’ notice, unless the retail employee consents in writing; and (iv) requiring a retail employee to contact a retail employer to confirm whether or not the retail employee should report for a regular shift fewer than 72 hours before the start of such shift. Significantly, it is uncertain whether the employee must consent in writing each time or provide one blanket consent. 

Retail employers, however, may still permit employees to trade shifts, and they may still change schedules with fewer than 72 hours’ notice in the following emergency circumstances:  (i) threats to the retail employees or the retail employer’s property; (ii) the failure of public utilities or the shutdown of public transportation; (iii) a fire, flood, or other natural disaster; or (iv) the declaration of a state of emergency by the President of the United States, the Governor of New York or the Mayor of New York City.

Work Schedules

This law requires retail employers to provide its retail employees with a written work schedule no later than 72 hours before the first shift on the work schedule.

Recordkeeping Requirement

Upon request, a retail employer must provide a retail employee with his/her work schedule in writing for any week worked within the prior three years.

Scheduling for Fast Food Employees

Three laws just signed by Mayor de Blasio greatly narrow a fast food employer’s operational discretion in hiring and scheduling its workers. The laws provide the following relevant definitions:

• “Fast food employee” is defined as a worker at a fast food establishment whose job duties includes customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning, or routine maintenance.
• “Fast food establishment” is defined as any establishment: (i) whose primary purpose is serving food or drink; (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 (a) an integrated enterprise that owns or operates 30 or more such establishments in the aggregate nationally, or (b) an establishment operated pursuant to a franchise where the franchisor and franchisee of such franchisor own or operate 30 or more such establishments in the aggregate nationally.
• "Chain” is defined as a set of establishments that share a common brand or that are characterized by standardized options for décor, marketing, packaging, products, and services.

“Fair Work Week” (Intro 1396)

Premium Pay

This law requires that the following premiums be paid to fast food employees for schedule changes made by fast food employers with less than 14 days’ notice:

• With less than 14 days’ notice but at least 7 days’ notice, the employer must pay $10 for each change to the work schedule where: (i) additional hours or shifts are added; or (ii) the date or start or end time of a regular shift or on-call shift is changed with no loss of hours.  The employer must pay $15 for each such change where less than 7 days’ notice is provided to the employee.
• With less than 14 days’ notice but at least 7 days’ notice, the employer must pay $20 for each change to the work schedule where: (i) hours are subtracted from a regular or on-call shift; or (ii) a regular or on-call shift is cancelled. The employer must pay $45 and $75, respectively, for each such change where less than 7 days’ notice or 24 hours’ notice is provided to the employee.

Paystubs

Premium pay must be separately noted on a wage stub or other form of written documentation to the employee.

Exceptions

Fast food employers are not required to provide premium pay if: (i) the changes are due to the following emergency circumstances: threats to the retail employees or the retail employer’s property; the failure of public utilities or the shutdown of public transportation; a fire, flood, or other natural disaster; the declaration of a state of emergency by the President of the United States, the Governor of New York or the Mayor of New York City; or severe weather conditions that pose a threat to employee safety (although where a fast food employer adds shifts to an employee’s schedule to cover for or replace another employee who cannot safely travel to work, the employer must provide the replacing or covering employee with the premium pay set forth in this law); (ii) the employee requests the change in writing; (iii) two employees voluntarily trade shifts subject to an existing employer policy regarding required conditions for employees to exchange shifts; or (iv) the employer is required to pay the employee overtime for a changed shift.

Prohibition of “Clopenings” (Intro 1388)

This law essentially bans fast food employers from requiring fast food employees to work consecutive shifts that involve both the closing and opening of the restaurant (“clopening”) – unless the fast food employee requests or consents to work such hours in writing. Specifically, this law requires that a fast food employer provide a minimum of 11 hours of time off of work between shifts when the first shift ends on the previous calendar day or spans two calendar days. For example, a fast food employer is not permitted to schedule a fast food employee to work a night shift ending at 1:00 a.m. and then work a shift that begins before 12:00 p.m. that day. 

The fast food employer must pay the fast food employee a premium of $100 for each instance that the fast food employee works such shifts, even though the employee has requested or consented to work the shift. Although the law is silent on this topic, presumably the fast food employee would still be entitled to the $100 premium in the event written consent was provided.

Offering Open Shifts to Current Employees (Intro 1395)

This law requires fast food employers to offer work shifts to current fast food employees before hiring additional workers, including part-time employees or subcontractors. Specifically, fast food employers must offer regular or on-call shifts to their current employees “employed at all fast food establishments owned by the fast food employer, or at a subset of such fast food establishments.” Employers are only required to offer hours to current employees up 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.

The law establishes a procedure for offering shifts, as follows:

1. The fast food employer must post a notice stating: (a) the number of shifts being offered, (b) the schedule of the shifts, (c) whether the shifts will occur at the same time each week, (d) the length of time the fast food employer anticipates requiring coverage of the shifts, (e) the number of fast food employees needed to cover the shifts, (f) the process, date, and time by which fast food employees may notify the fast food employer of their desire to work the shifts, (g) the criteria the fast food employer will use for the distribution of the shifts, (h) an advisement that a fast food employee may accept a subset of the shifts offered but that the shifts will be distributed according to the criteria described in the notice, and (i) an advisement that while fast food employees working at all locations owned by the fast food employer may accept offered shifts immediately, shifts will be distributed first to fast food employees currently employed at the location where the shifts will be worked.
2. The notice must be posted for three consecutive calendar days in a conspicuous and accessible location where notices are customarily posted.
3. The notice must be provided electronically to each fast food employee.

Fast Food Employee Non-Profit Contributions

Authorized Deductions to Non-Profits (Intro 1384)

This law permits fast food employees to authorize their employers to deduct voluntary contributions from wages and remit those deducted wages to a designated non-profit organization. Presumably, the purpose of this bill is to make it easier for fast food employees to fund non-profit organizations working on their behalf. The fast food employer must include a line item on the fast food employee’s wage statement notating the deduction.
 
Upon request from the fast food employer, the non-profit is required to reimburse the fast food employer for the costs associated with deduction and remittance. Significantly, this law is deemed repealed two years after its effective date.

Conclusion

These laws will have a significant impact on how retail employers and fast food employers in New York City prepare and implement work schedules for their employees. It is important that such employers begin working soon to design strategies to run their businesses most effectively while complying with these new laws. For example, employers should immediately begin tracking their coverage needs to ensure consistent work schedules. Also, employers should ensure that their procedures for communicating with employees both electronically and at the worksite are in place to comply with these laws. And, once these laws are effective, employers must establish procedures related to recordkeeping so that they are aware of schedule changes and the premium payments they may be required to make.

We will continue to monitor these laws and any regulations that are enacted in support of these laws.