Will New Jersey Become the Second State to Pass a Fair Workweek Law?

Seyfarth Synopsis: On the heels of becoming the first state to mandate severance for workers laid off as part of a mass layoff, New Jersey just may become the second state to pass a statewide predictable scheduling law if a recently-introduced bill becomes law. If passed, the mandate would impact mercantile, hospitality, restaurant, and warehouse establishments employing 250 or more employees worldwide. Covered employers would be required to notify and compensate eligible employees for certain employer-initiated shift changes, and offer existing eligible employees work before external hiring.

On January 30, 2020, the New Jersey legislature introduced the New Jersey Fair Workweek Act (the “Bill”).  If passed, New Jersey would become the second state to adopt a statewide predictable scheduling (or “fair work week”) law.  As previously reported, in 2018, Oregon became the first state to enact such a law statewide.  Numerous cities, including Philadelphia, New York City, Chicago, San Francisco, and Seattle have passed their own fair workweek laws.

If passed, the Bill would have an expansive reach, applying to non-exempt employees working in mercantile, hospitality, restaurant, and warehouse establishments with 250 or more employees worldwide.  The full text of the proposed legislation is available here.

Below is a summary of the Bill’s key provisions, if passed as is:

Pre-Employment Exchange of Information

Employers and employees would be required to exchange information regarding availability and expectations concerning hours and shifts to be worked, including the employee’s desired number of weekly work hours and the days and times the employee is available to work. 

Employers would also be required to provide employees with a written good-faith estimate of their work schedule upon hire.  Such estimate would have to be revised in case of a “significant change” to the employee’s work schedule or to the employer’s business needs.  The Bill would allow employees to request schedule changes or preferences, and require employers to engage in an interactive process before granting or denying such requests. 

The good faith estimate of an employee’s work schedule would need to describe: (1) the average number of hours the employee could expect to work each week; (2) the minimum and maximum number of work hours the employee could expect to work each week; (3) the minimum length of shifts that the employee could expect to work; and (4) the number of days, amount of time, and number of shifts that the employee could expect to work, and days of the week and times or shifts on which the employee would not be scheduled to work.

Even if the employee’s average weekly work hours significantly exceeded the hours provided in the good-faith estimate, an employer would not violate the Bill so long as it had a “bona fide business reason” for the schedule and made “every effort” to schedule the employee in a manner consistent with his or her expressed preferences.

Advanced Notice of Work Schedules

The Bill would require that employers post work schedules at least 14 days before the first day of the new schedule.  All schedules would need to (1) be posted in a conspicuous and accessible location, (2) be transmitted to each employee, and (3) list every employee at the worksite, whether or not they are scheduled to work on the posted schedule.  It is unclear whether the Bill would require posting schedules for employees who are not covered under the proposed legislation.

Changes to Work Schedules and Predictability Pay Requirements

Employers would be required to notify eligible employees “as promptly as possible” of any changes to their work schedules, and at least before the schedule change takes effect.  Employers must then revise and re-transmit the schedule within 24 hours of the change.  Employees will have the option to accept or decline any hours or shifts not included in the originally-posted schedule.  If they choose to accept, the acceptance must be in writing.

Like other predictable scheduling laws, the Bill would require “predictability pay” if an employer makes certain changes to employees’ schedules after the 14-day advanced notice period.  Predictability pay is additional compensation (beyond what an employee earns from the hours worked) and calculated by reference to the employee’s “regular hourly wage.” The Bill would mandate predictability pay as follows:

• One hour of predictability pay when an employer adds hours of work or changes the date, time, or location of the employee’s work shift without loss of hours.
• One-half times the employee’s regular hourly wage for any scheduled hours an employee does not work because the employer subtracts hours from a regular or on-call shift; but, when the hours of work are reduced, employees must be paid at least four hours of pay (through a combination of wages and predictability pay).

Most, but not all, schedule changes will require predictability pay.  Under the Bill – which contains notably less exceptions than similar laws – predictability pay would not be required:

• when an employee asks for and is granted a shift change, in writing (including sick, vacation, and other leaves); or
• when a schedule change is the result of a mutually-agreed upon shift trade or coverage arrangement between employees, subject to any employer policy regarding shift changes.

Notably, the Bill does not contemplate exceptions to predictability pay based on circumstances beyond the employer’s control, such as inclement weather or utility failures, or for unanticipated changes in business needs or schedule changes due to employee discipline.     

Right to Rest Between Shifts

Under the Bill, employees would be allowed to decline any work hours starting less than 12 hours after the end of their most recent shift.  Employees could agree to work such shifts, in writing.  If so, they would be entitled to “rest shortfall pay” – compensation at one and one-half times the employee’s regular rate of pay for all hours worked within 12 hours of the prior shift.

Existing Employees’ Priority Rights to Additional Shifts

A significant piece of the Bill would require employers to make “every effort” to schedule existing employees for the number of work hours identified in their initial pre-hire written statements, before making any external hires.  However, the Bill contains two key exception to this requirement: (1) employers would not be required to offer additional shifts to existing employees if the additional hours would entitle the employees to overtime pay; and (2) employers could hire new employees if the existing employees lacked or could not obtain training to be qualified for the work.

Employers who violate this provision would be liable to existing employees for “retention pay” – compensation for the hours worked by the newly hired employee that were within the existing employee’s written availability.  As drafted, it is unclear whether this retention pay is a one-time or ongoing obligation.

Minimum Weekly Pay

In a significant departure from other fair workweek laws, the Bill contains a provision for “minimum weekly pay” – requiring that employers pay their eligible employees at least nine times their regular hourly wage or the minimum wage (whichever is greater), in any seven-day period.  In essence, it would create a “floor” for what covered employees must be paid each week.  Any paid leave would count toward the obligation.  Employees who take unpaid leave or do not work in a given week can “waive” the requirement, if done in writing.

Retaliation Prohibited

The Bill would prohibit discrimination, retaliation, or the any adverse action against an employee based on the number of days and hours that the employee indicates they can work.   

Notice and Recordkeeping Requirements

Employers would be required to post, in a conspicuous place, a notice prepared and approved by the Commissioner of the Department of Labor and Workforce Development regarding the rights and privileges provided under the legislation.  The same notice would be required to be appended to an existing employee handbook.

Employers would also need to keep records necessary to demonstrate compliance with the Bill for a period of six years – which corresponds to the newly enacted statute of limitations for wage and hour claims in New Jersey.  This would include the good faith estimate of work schedule, payments for predictability and retention pay, and work schedules, modifications, and their transmittals to employees. 

Written Wage Statements

Similar to certain state and local paid sick leave law requirements that employers inform employees of select sick leave information on their wage statements (or, depending on the law, other forms of communication),[1] the Bill would require employers to itemize the amounts that employees receive under the law on paychecks, including predictability pay, rest shortfall pay, any minimum weekly pay adjustment, and retention pay. 

Application to Collective Bargaining Agreements

The Bill would not apply to employees covered by a valid collective bargaining agreement, if the provisions are expressly waived and the agreement provided employees with “predictable, stable hours into which the employees had input.”  As currently drafted, the Bill would not exempt existing CBAs from its requirements.

Penalties for Violations

Employees could seek compensatory damages and other civil remedies for violation of these scheduling provisions, including pursuing relief in court.  Employer penalties would be calculated on a per employee and per instance basis, ranging from $200 - $500, depending on the type of violation.  

 

The Bill has been referred to committee for consideration.  We will continue to monitor this legislation as the New Jersey Legislature considers its enactment. 

 

 

 

[1] Somewhat ironically, the New Jersey Earned Sick Leave Act does not contain an express wage statement notice requirement.