Fair Work Week Ordinance: Los Angeles City Joins the Fray

Seyfarth Synopsis: The holidays aren’t the only thing around the corner. The City of Los Angeles’ proposed Fair Work Week Ordinance is poised to place new onerous scheduling requirements on retailers. The Los Angeles City Council voted to pass the ordinance on November 22, 2022, and it is slated to go into effect in April 2023. Among other things, these requirements will require employers to provide schedules two weeks in advance, and penalize employers who are unable to adhere to provided schedules.

The Backdrop

While the California legislature has considered predictive scheduling laws, to date, these laws have only passed at the local level. Los Angeles is about to join cities such as San Francisco, San Jose, and Emeryville by enacting a Fair Work Week Ordinance. (Berkeley has also introduced a similar ordinance, but it has not yet passed.)

Impacted Employers

The proposed ordinance defines an employer as any retail business with over 300 employees globally. Notably, individuals employed through staffing agencies, and employees of certain subsidiaries and franchises count towards the 300 person total.

To be considered an employer under the ordinance, entities must also identify as a retail business in the North American Industry Classification System (NAICS) within retail trade categories and subcategories 44 through 45. (These categories include establishments primarily engaged in retailing merchandise and rendering services incidental to the sale of merchandise.)

Impacted Employees

Similar to other City ordinances, an employee is anyone working in the City of Los Angeles at least two hours or more per week for an employer and who is entitled to be paid at least minimum wage under Section 1197 of the California Labor Code and the California Industrial Welfare Commission’s published wage orders.

Employers Must Provide Estimates & Advance Notice

The ordinance will require employers to provide estimates and advance notice of schedules as follows:

• Good Faith Scheduling Estimate & Notice: Employers must provide a good faith estimate of work schedules before hire, as well as a notice of rights under the ordinance.
• 10 Day Notice: Employers must provide a good faith estimate of a schedule within ten days of an employee’s request. If there is a substantial deviation from the estimate, the employer must have a documented business reason for the change.
• Right To Request Changes: Employees have the right to request a preference for certain hours, times, or locations. Employers may accept or deny requests, provided that they notify the employee in writing of the reason for any denial.
• Advance Notice: Employers must provide work schedules to their employees at least 14 days in advance by either posting or transmitting them by electronic means (or another means reasonably calculated to provide notice). Employers shall provide written notice of any employer initiated changes that occur after the advance notice period.
• Right to Decline Schedule Change: If an employer changes the schedule, employees can decline any hours not included in the original schedule. And, any consent to a schedule change must be in writing.

Hit Pause Before Hiring

Before hiring new employees (or bringing on contractors or temps), an employer must offer work to current qualified employees if the additional work would not result in overtime. Additional hours offered to current qualified employees must be conspicuously posted for at least 72 hours before hiring a new employee (unless all employees confirm they are not interested in the new hours, in which case, the employer can fulfill its staffing needs).

Employees who accept offers under these circumstances are not entitled to predictability pay (described below) if the additional hours result in schedule changes.

Pay To Change

“Predictability pay” will be required when a schedule is changed under certain circumstances. Employers will owe one hour of pay at the regular rate for changes in time, date, or location that do not result in loss of employee time, or adds more than 15 minutes to an employee schedule. Employers will also owe half the employee’s regular rate of pay for time not worked if the employer reduces the scheduled time by 15 minutes or more.

Predictability pay is not required for:

1. Employee-requested schedule changes;
2. Employees voluntarily accepting schedule changes due to another employee’s absence;
3. Hours changed as a result of the employee’s violation of law or the employer’s policies;
4. The employer’s operations are compromised due to force majeure; or
5. Where extra hours would result in overtime payments.

Employers Must Find Coverage

Employers will not be allowed to compel employees to find coverage if they miss a scheduled shift.

Requirements For Rest Between Shifts

Employees cannot be scheduled to work on shifts that are less than 10 hours apart without written consent—e.g., an employee who is scheduled to close one day and open the next one. If an employee consents, they must receive 1.5 times their regular hourly rate for the second shift.

Records Retention Requirements

Covered employers must keep records for both current and former employees for a three-year period, including:

• Work schedules for all employees;
• Copies of written offers to employees for additional work hours and written responses from employees;
• Written correspondence between the employer and employees about work schedule changes like requests, approvals, and denials;
• Good faith estimates of hours provided to new and existing employees; and
• Any other records that may be required to demonstrate compliance.

Posting Requirements

Every employer must post the City’s forthcoming notice to inform employees of these rights. Posters must be in English, Spanish, Chinese (Cantonese and Mandarin), Hindi, Vietnamese, Tagalog, Korean, Japanese, Thai, Armenian, Russian, Farsi, and any other language spoken by at least five percent of employees at the worksite.

Penalties Add Up

Employees will be required to give employers written notice of any alleged violations and an opportunity to cure before filing a claim with the City. Employers will have 15 days to cure alleged violations.

The City can recover up to $500 per violation per each employee. Both employees and the City will also be entitled to administrative penalties that accrue on a daily basis. Employees will be able to enforce the ordinance through a private right of action and attorneys’ fees will be awarded to prevailing plaintiffs. (However, an entity enforcing the ordinance on behalf of the public shall only be entitled to equitable, injunctive and/or restitutionary relief, and reasonable attorneys’ fees.)

Employers are prohibited from discharging or retaliating against an employee in any way for participating in proceedings or seeking to enforce their rights under the Ordinance.

Looking Ahead

The City Council considered the Ordinance on November 22, 2022 and approved it unanimously, 10-0. It is now being held over for one week for a second reading scheduled for November 29, 2022. The Ordinance’s proposed effective date is April 1, 2023, but violations during the first 180 days of the effective date shall be subject to a grace period.

The City may promulgate rules and regulations (which will likely be issued closer to the effective date).

Workplace Solutions

Employers doing business in the City of Los Angeles need to closely examine their scheduling practices and records retention procedures to ensure they are ready to be in compliance with the new law, as well as make sure their payroll departments are aware of the potential need to handle predictability pay. As these laws continue to creep up in cities and counties around the country, Seyfarth will keep you informed. If you have questions regarding compliance, please reach out to the authors or your favorite Seyfarth attorney.