Mirror Mirror on the Wall, Who’s the Fairest of Them All: Philadelphia’s Fair Workweek Law?

Seyfarth Synopsis: Philadelphia joins the ranks of other cities after passing its own predictable scheduling law. The law will impact employers in the retail, food service, and hospitality industries. Covered employers will be required to notify and compensate employees for certain employer-initiated shift changes, and offer existing employees work before hiring others.

On December 6, 2018, the Philadelphia City Council passed the Philadelphia Fair Workweek Ordinance (the “Ordinance”), adding Philadelphia to the growing list of jurisdictions, including New York City, San Francisco, Seattle, and the state of Oregon, that have enacted predictive scheduling laws. The Ordinance, which will affect employers in the retail, food service, and hospitality industries, mandates certain advance notice and compensation when covered employers change employees’ work schedules, and gives existing employees priority to pick up additional shifts and the right to decline certain shifts.  The full text of the law is available here. 

First, some good news for employers concerned with compliance: the effective date of the ordinance will be January 1, 2020.  That gives covered employers a full year to review and modify policies and practices as needed to comply with the Ordinance. 

The challenging news?  The Ordinance is rather expansive.  “Covered Employers” are defined as employers in the retail, hospitality, and food services industries that employ 250 or more employees and have 30 or more locations worldwide (irrespective of where any particular employee works).  The law will apply to full-time, part-time, seasonal, and temporary employees.

Although 2020 may seem far away, covered employers – particularly those already affected by other predictable scheduling laws – should familiarize themselves and local operators with the Ordinance’s extensive requirements to ensure compliance.

Although more guidance will likely be issued in advance of the effective date, below is a summary of the Ordinance’s key provisions:

Advance Notice of Work Schedules

Employers must provide employees with a written good-faith estimate of their work schedule upon hire, and revise such estimates when there are changes in the employee’s availability or the employer’s business needs.  The law also allows employees to request schedule changes or preferences (such as, requests (a) not to work on particular days, shifts, or times, (b) not to work at certain locations, or (c) to work more or fewer hours), and encourages employers to engage in an interactive process before granting or denying such requests.  In the event that the employer denies the employee’s request, such denial cannot be for any unlawful reason.

The good faith estimate of an employee’s work schedule must describe: (a) the average number of hours the employee can expect to work each week over a typical 90-day period; (b) whether the employee can be expected to work any on-call shifts; and (c) a “subset” of days, times and/or shifts the employee can typically expect to work, or on which the employee will not be scheduled to work.

Written Work Schedules and Posting Requirements

The Ordinance requires employers to provide employees with specific advance notice of their work schedules, phased into two parts.  Effective January 1, 2020, employers must post work schedules at least 10 days before the first day of the new schedule.  Starting January 1, 2021, employers must post work schedules at least 14 days before the first day of the new schedule.  All schedules must be posted in a conspicuous and accessible location.  If employers post schedules electronically, they must ensure that employees have electronic access on-site.

Changes to Work Schedules and Predictability Pay Requirements

Employers must notify employees “as promptly as possible” of any changes to their work schedule.  At a minimum, employers must provide such notice prior to the work schedule change taking effect.  Employers also must revise the posted schedule within 24 hours of the change. Employees can choose whether to accept or decline any hours or shifts not included in their original posted schedule.  If an employee agrees to work the modified schedule, the acceptance must be reflected in writing (which can include email, text message, or use of a scheduling application).

Like other predictable scheduling laws, the Philadelphia Ordinance requires “predictability pay” when employers make certain changes to employees’ schedules.  Predictability pay is additional compensation to the employee (beyond what an employee earns from the hours worked) for employer-initiated schedule changes made after the required advanced notice period.  Predictability pay is calculated by reference to the employee’s regular rate of pay as set forth in the Pennsylvania Minimum Wage Act.  The Ordinance mandates predictability pay as follows:

• One hour of predictability pay when an employer adds time to an employee’s work shift, or changes the date, time, or location of the shift, without any loss of hours. 
• One-half times the employee’s regular rate of pay for all hours an employee does not work because the employer subtracts hours from a shift, or cancels a shift.

Not all schedule changes require predictability pay. The Ordinance lists several situations where predictability pay is not required, including:

• When an employee asks for a schedule change, in writing (including sick, vacation, and other leaves);
• Agreements between employees to swap shifts;
• Circumstances beyond the employer’s control, including threats to employees or the employer’s property, public utility failures, natural disasters or severe weather conditions that disrupt transportation or threaten public safety, or a declared state of emergency;
• When an employee begins or ends his or her shift no more than 20 minutes before the previously-scheduled start or end time of the shift (i.e., minor scheduling adjustments);
• When an employee agrees to work additional hours in response to a mass written communication by an employer offering additional hours because another employee is unable to work, so long as the employer makes clear that acceptance of additional hours is purely voluntary;
• When hours are subtracted because the employee is terminated;
• When changes to the posted work schedule are made within 24 hours after the required advance notice;
• When hours are subtracted for disciplinary reasons following a multi-day suspension that is documented in writing;
• When there are changes beyond the employer’s control to a ticketed event (as defined in the Ordinance), after the employer posts the schedule as required; and
• When a hotel banquet is scheduled, beyond the employer’s control, after the employer posts the schedule in advance as required.

Right to Rest Between Shifts

Employees may decline, without penalty, working shifts starting less than nine hours after the end of a prior day’s shift, or within nine hours after the end of a shift that spanned two days. Employees can agree to work such shifts, but they must consent in writing and can revoke their consent at any time.  However, even if employees consent, they must be paid $40 for each shift.

Existing Employees’ Priority Rights to Additional Shifts

A significant piece of the Ordinance requires that employers offer additional hours and shifts to existing employees before hiring new employees.  The offer to existing employees must (a) be provided in writing for at least 72 hours, (b) be posted in a conspicuous location at the workplace, (c) be provided electronically to each employee if the employer customarily communicates scheduling information in such a manner, and (d) detail the qualifications and specifications of the position, among other information.  That said, employers can simultaneously post notice of such additional hours at the site requiring additional coverage, other worksites, and to external candidates. 

Of the qualified candidate pool, employers must give first priority to employees at the worksite, followed by employees from other worksites.  In doing so, employers cannot distribute hours in a manner that discriminates based on any protected status (including familial status, caregiving obligations, or status as a student).  Employers are also prohibited from distributing shifts to avoid coverage under the Patient Protection and Affordable Care Act. 

The Ordinance contains one key exception to the “priority for existing employees” requirement: employers are not required to offer additional shifts to existing employees if the additional hours would entitle the existing employees to a premium rate under state or federal law (e.g., overtime).

What this means is, as a general matter, employers can only make external hires to fill additional hours or shifts if they have complied with the notice requirements detailed above and existing employees have not accepted the available shifts.

Policy Requirements

Employers must provide, in writing, their policy and process for offering and distributing work shifts.  The policy must be posted in an accessible location in the workplace and state (1) where the employees can access written notices of available shifts; (2) the process by which employees may notify the employer of their desire to work the available work shifts; and (3) the criteria for distribution of work shifts among qualified and interested candidates.

Retaliation Prohibited

The Ordinance prohibits retaliation, interference, or any other action that would penalize or deter an employee from exercising rights under the law.  Notably, the Ordinance will apply a rebuttable presumption of retaliation against any employer that disciplines an employee within 90 days of an employee exercising rights under Ordinance, unless the discipline is for just cause and the reasons are documented. 

Recordkeeping Requirements

Employers must keep records necessary to demonstrate compliance with the Ordinance for a period of two years.  This includes documentation detailing employees’ written consents to work additional shifts, shifts offered, and payroll records showing predictability pay compensation. 

Collective Bargaining Agreements

The Ordinance’s provisions can be waived by a collective bargaining agreement, so long as the waiver is explicit and not imposed unilaterally.

Penalties for Violations

The Ordinance provides mechanisms for complaints to be brought to a city agency for investigation, or a private right of action in court.  Complaints must be brought within two years of any alleged violation.  Employees could recover unpaid compensation, wages and benefits lost, up to $2,000 in liquidated damages, and attorneys’ fees and costs for any violations.