Shifty Business: NYC Restricts Shift Scheduling for Retailers and Fast Food Chains

Seyfarth Synopsis: Five new laws in New York City will impose strict limits on shift scheduling for fast food and retail industry employees. The laws will be effective 180 days after their signing, on November 26, 2017.

Effective November 26, 2017, chain fast food employers and retail employers will face numerous limitations on scheduling their employees’ shifts. Fast food employers will be required to make and post shift schedules in advance, pay premiums for last-minute shift changes, offer open shifts to current employees before hiring new ones, avoid scheduling “clopening” shifts, and deduct and remit voluntary contributions from employees to not-for-profits. Retail employers will effectively be banned from on-call scheduling.

These restrictions are part of a package of five bills, passed by the New York City Council and signed by Mayor Bill de Blasio, known collectively as “Fair Workweek” legislation.  The laws will be administered by the Office of Labor Policy and Standards ("OLPS") within the New York City Department of Consumer Affairs. 

Fast Food Provisions

Covered Employers and Employees

“Fast food” establishments are defined as those whose primary purpose is serving food or drink items; where patrons order and pay before eating, taking out, or getting delivery; and that are part of a chain of 30 or more establishments nationally. The affected employees are those whose duties include customer service, cooking, preparing food or drinks, delivery, security, stocking supplies or equipment, and cleaning or routine maintenance. Salaried employees are not covered.

Advance Scheduling Requirement

Employers will be required to provide fast food employees with a written estimate of the number of hours the employee will work each week and the expected dates, times, and locations of those hours. Any long-term or indefinite changes to those estimates must be updated as soon as possible and before the employee receives the first work schedule following that change.

Employers will also be required to provide employees, by their first day of work, with written notice of a work schedule containing regular and on-call shifts. The employer then must provide notice at least 14 days before the first day of any new schedule, with all anticipated regular and on-call shifts.

Employers will be required to provide written notice of the work schedule by posting it in a conspicuous place and sending it to each employee (including electronically if the employer regularly communicates scheduling information this way). Employers must also update these schedules within 24 hours of knowledge of a change or as soon as practicable for changes effective within 24 hours, provide a copy to affected employees, and post the revised schedule. Upon an employee’s request, employers will have to provide that employee’s work schedule for any week worked in the past three years, in writing, and the most current version of work schedules of all employees in the same establishment.  

The law allows employees to decline to work any hours not included in these schedules. If an employee agrees to work hours not in those schedules, the employer must obtain written consent by the start of the shift.

Schedule Change Premiums

Employers will be required to make premium payments to any employee affected by a change in the work schedule. These premiums are in addition to the employee’s regular pay, must be paid at the same time as regular wages are paid, and must be noted separately on wage statements.

These premiums vary based on how far in advance a shift change is communicated and the type of change:

• Between 14 days and 7 days in advance: $10 to $20 per change
• Between 7 days and 24 hours in advance: $15 to $45 per change
• Less than 24 hours in advance: $75 per change

Employers will not be required to provide schedule change premiums in the following circumstances: the employer’s operations cannot begin or continue due to certain emergency conditions; the employee requested a schedule change in writing; two employees voluntarily traded shifts; or the employer is required to provide overtime pay for the changed shift.

Access to Hours

An employer must offer current employees the opportunity to serve regular and on call shifts before hiring new employees or subcontractors to perform the work. Generally, this means the employer must post a notice of these shifts for three consecutive days and provide an electronic copy to each employee. The notice must contain information about the number of available shifts; the schedule; whether they will occur at the same time weekly; the anticipated length of time coverage will be required; how and when employees should notify the employer of their interest; the criteria used to distribute them; and certain details about how shifts will be distributed. 

Employees from any location within the fast food chain may accept the shifts or any subset thereof in those three days, but those at the location of the open shifts will have priority. After three days, but more than 24 hours prior to the start of the shifts, employers may make shifts available to employees from other locations. Only after this process is completed may the employer hire new employees or subcontractors for any remaining shifts. Employers may avoid these waiting periods by obtaining written confirmation from a set of employees that they do not accept the shifts offered.

These provisions do not apply if the anticipated shift would require employees to be paid at the time-and-a-half overtime rate.

Employers are also encouraged to make reasonable efforts to offer training opportunities to workers on the skills and experience for work if the employer regularly has additional needs.

Banning “Clopening” Shifts

Employers cannot require fast food employees to work “clopening” shifts: two shifts with fewer than 11 hours between the time the first shift ends and the second shift begins, when the first shift ends on the previous day or spans two calendar days. However, employees may submit a written request or consent to work such a shift. The employer must pay an employee $100 for each clopening shift worked by that employee.

Voluntary Contributions

Fast food employers will be required to deduct and remit voluntary contributions to not-for-profits from employees’ paychecks. Employees or not-for-profits may submit a form to the employer authorizing deductions from a consenting employee’s paycheck. The authorization form must include: the employee’s signature; the employee’s name and address; the amount, frequency, and start date of the contribution; the not-for-profit’s name, address, email address, web address, phone number, and a contact for employees who want to revoke authorization; and a statement that contributions are voluntary and authorization to deduct may be revoked at any time in writing. 

Employees may revoke the authorization in writing with the not-for-profit, which must then submit it to the employer. Within five business days of receiving any authorization or revocation, employers must provide a copy of it to the relevant employee. Employers will be required to begin or end deductions by the first pay period after 15 days from having received the notice. Employers will only be required to honor an authorization once per pay period and for contributions of at least $3 for employees paid each week (or $6 if paid every two weeks). The Office of Labor Policy and Standards is expected to create rules on the processing fees for deduction and remittance, for which employers will be able to request reimbursement from the not-for-profit.

The Office of Labor Policy Standards will create a notice of employee rights under this law, and employers will be required to distribute and post this written notice. The law further imposes recordkeeping obligations on employers. For two years, employers must keep the following records: deduction authorizations and revocations made; remittances; deductions; a copy of the authorization; and proof of distribution of the required notice to employees.

Retail Provisions

Covered Employers and Employees

 “Retail” employers are those with 20 or more employees that are engaged primarily in the sale of consumer goods at a store within New York City.

Banning On-Call Shifts

The law effectively bans on-call scheduling for retail employees. An on-call shift is defined as any period other than a regular shift when the employer requires the employee to be available to work. Retail employers may no longer do the following:

• Schedule an employee for any on-call shift;
• Cancel any employee’s regular shift within 72 hours of its scheduled start;
• Require an employee to work with fewer than 72 hours of notice (unless the employee consents in writing); or
• Require an employee to contact the employer to confirm whether the employee should report for a regular shift fewer than 72 hours before the shift.

The law still allows retail employers to grant time off requests, permit employees to trade shifts, and make changes to employees’ work schedules with less than 72 hours’ notice if the employer’s operations cannot begin or continue due to a limited number of reasons.

Retail employers will be required to provide a written work schedule 72 hours in advance of the first shift on that schedule, post it in a conspicuous place, update the schedule for any changes, and notify employees affected by any schedule changes. Employers that regularly communicate scheduling information electronically will also be required to transmit the work schedule electronically. Additionally, employers must provide employees, upon request, with a written work schedule for any week worked in the past three years. The law has a carve-out for employees covered by collective bargaining agreements that waive the provisions of this law and address employee scheduling.

General Provisions

Retaliation prohibited: Employers are prohibited from taking adverse actions against employees who engage in activities protected by these laws.

Notice and posting: The Office of Labor Policy and Standards will make available notices for employers to post in the workplace informing employees of their rights under each of the enacted laws. These notices will be made available to download and post before the effective date.  

Recordkeeping: Employers must retain records documenting their compliance with these laws for three years.

Investigation and penalties: The Office of Labor Policy and Standards will investigate any complaints received under these laws. If the OLPS finds violations of the laws, it may assess remedies including compensatory damages for employees, rescission of employee discipline, and civil penalties payable to the City of up to $1,000 per violation, or up to $15,000 where an employer engages in a pattern or practice of violations. Any person may bring a civil action for violations of these laws.

Implications for Employers

Employers should prepare to revise their written policies in accordance with the Fair Workweek legislation, and may receive questions from employees in advance of implementation. We will continue to track implementation of the legislation, and advise of any updates.