Article

HR corner: Opportunity to work and scheduling practice laws on the rise

April 11, 2017
| United States

By Marina A. Galatro, PHRca, SHRM-CP and Senior HR Consultant, HR Partner, West Region

In a study of early career workers ages 26 to 32, 41% of workers reported they did not know their schedule more than a week in advance and 74% did not know how many hours they would work in a given week.

This type of late scheduling has become more common with the increase in involuntary part-time workers. In April 2016, 6.1 million employees worked part-time involuntarily; that is, they were only offered part-time hours when they would have preferred full-time status. EPI analysis shows that workers who make less than $22,500 annually are those most likely to have erratic schedules, more than in any other income bracket.

Unpredictable schedules for workers can contribute to uncertainty about monthly income, affect public benefit eligibility and create challenges for planning second jobs, schooling, and child or elder care. Erratic schedules are particularly prevalent in the retail and food services sectors, where one in three workers and one in five workers, respectively, have irregular schedules.

Campaigns for secure scheduling laws and work opportunities have been won or are underway in cities and states across the country and major national chain stores and restaurants. San Francisco, Seattle and the city of SeaTac already have ordinances in place. Several other cities are considering similar laws, including Albuquerque, New York City and Washington D.C.

San Jose’s Opportunity to Work Ordinance

San Jose, California passed an Opportunity to Work Ordinance, the first measure of its kind in the country. Although San Francisco, Seattle and SeaTac have adopted similar ordinances, no previous initiative has focused on providing part-time employees across all industries access to more work hours.

The San Jose Opportunity to Work Ordinance, which took effect March 13, 2017, will provide fair access to additional hours for employees in part-time or hourly positions, giving them the opportunity to earn enough to pay for the basic necessities. It will require San Jose employers to offer additional work hours to existing part-time employees before hiring new staff, including subcontractors or the use of temporary staffing services.

Who must comply?

The Ordinance applies to businesses with 36 or more employees. For a chain business not owned by a franchisee, the Ordinance specifies that the total number of employees is the combined number of employees at every location of the chain, whether or not the employees are located in San Jose. For a franchisee, the total number of employees is determined by the combined total number of employees at every location owned by the franchisee operating under the same franchise, whether or not located in San Jose.

The Ordinance provides an exemption where “all or any portion” of its provisions are expressly waived in a collective bargaining agreement, although only “to the extent required by federal law.”

Who is an employee under the Ordinance?

An employee is any person who:

  • Performs at least two hours of work for an employer in a calendar week
  • Qualifies as an employee entitled to payment of a minimum wage from any employer under the California minimum wage law as provided under Section 1197 of the California Labor Code and wage orders (published by the California Industrial Welfare Commission) or is a participant in a Welfare-to-Work program.

What’s required?

The Ordinance requires covered employers to offer additional hours to “existing qualified” part-time employees before hiring additional employees or subcontractors, including hiring through temporary services or staffing agencies.

The hours only have to be offered to those employees who have the skill and experience to perform the particular additional hours of work, as determined by the employer’s “good faith and reasonable judgment.” The Ordinance does not require an employer to offer an employee additional hours where that would cause the employee to incur overtime or other premium hours.

Posting, recordkeeping and enforcement

Employers will be required to post a Notice of Employee Rights. Employers also are required to retain:

  • Records of employee work schedules
  • Documentation of the offer of additional hours of work to existing employees prior to hiring any new employees
  • Any other records that the office requires employers to maintain to demonstrate compliance,/li>

There are many uncertainties regarding coverage and requirements under the new Ordinance. The Office of Equality Assurance will soon publish the new Notice and other compliance resources, which will provide clarity for employers. In the meantime, employers should be certain to post the required Notice by the Ordinance’s March 13, 2017 effective date, and begin the process of reviewing scheduling and recordkeeping practices for compliance with the new law. For information, check the Office of Equality Assurance’s website. The Ordinance is available here.

San Francisco

The city of San Francisco paved the way with its Formula Retail Employee Right Ordinances, which has two main components: hours and penalties. Effective October 3, 2015, these laws regulate hours, retention and scheduling, and treatment of part-time employees at formula retail establishments.

Covered employers

The laws apply to “Formula Retail Establishments” (or chain stores) with at least 40 formula retail establishments worldwide, and 20 or more employees in San Francisco as well as their janitorial and security contractors.

Covered employers must offer any extra work hours to current qualified part-time employees in writing before hiring new employees or using contractors or staffing agencies to perform additional work.

Covered employers must provide employees with their schedules two weeks in advance. Schedules may be posted in the workplace or provided electronically, so long as employees are given access to the electronic schedules at work.

Predictability pay for schedule changes

If changes are made to an employee’s schedule with less than seven days’ notice, the employer must pay the employee a premium of one to four hours of pay at the employee’s regular hourly rate (depending on the amount of notice and the length of the shift). More information, including notice requirements, may be found on the San Francisco OLSE website here.

SeaTac

The City of SeaTac’s ordinance promoting full-time employment, Setting Minimum Employment Standards for Hospitality and Transportation Industry Employers, went into effect January 1, 2014. Specifically, if a hospitality or transportation employer has additional hours of work to provide in job positions held by Covered Workers, then it shall offer those hours of work first to existing qualified part- time employees before hiring additional part-time employees or subcontractors. More information can be found here.

Seattle

On September 29, 2016, the Seattle City Council unanimously adopted the Secure Scheduling legislation to be effective July 1, 2017. The Ordinance addresses retail and food service employees’ predictable working conditions, and requires employers to provide workers with an estimate of hours upon hiring, a work schedule two weeks in advance, and compensation for workers if their hours are changed or if they are asked to work back-to-back shifts without adequate resting time.

The Seattle Secure Scheduling Ordinance applies to:

  • Retail and fast food businesses with 500+ employees worldwide
  • Full service restaurants with 500+ employees and 40+ full-service restaurant locations worldwide

What’s required?

Similar to the San Francisco and San Jose scheduling ordinances, upon hire employers must provide a good faith estimate of hours an employee can expect to work, including on-call shifts. Employers must post employees’ work schedules 14 days in advance or pay a “predictability pay.”

The Ordinance also states that if the gap between a closing and opening shift is less than 10 hours, the employer must pay the employee time-and-a-half for the difference. Employers must also offer additional hours of work to qualified existing employees before hiring external employees.

Posting requirements

Employers must display the City of Seattle’s workplace poster in a conspicuous and accessible place at the worksite, in English and the employees’ primary language(s). The Office of Labor Standards will create the poster and provide translations. For more information, see the Seattle Office of Labor Standards website. The Ordinance is available here.

Is New York City next?

The state already has a “call-in pay” law that requires employers to pay workers a certain wage if they are sent home early from a scheduled shift (similar to California state’s law). New York City’s mayor has committed to enacting “fair workweek” legislation that would specifically apply to fast-food workers and would impose scheduling requirements similar to the Seattle ordinance.

What about the state of California?

California lawmakers recently introduced an “Opportunity to Work” bill (A.B. 5) which, if passed, would apply similar scheduling requirements to employers throughout the state of California.

How can employers prepare for continued legislation?

The movement for predictable scheduling is a hot topic for employers from coast to coast, as advocates for a more stable work schedule continue their efforts. Momentum is building, too, with more federal, state and local legislators beginning to agree with the positive outcomes such initiatives can offer.

Giving workers greater control over their schedules can reduce turnover, improve attendance, morale and productivity, and increase a company’s market value. Ensuring that all workers are able to support themselves and their families makes for a healthier workforce, reduces reliance on public assistance and allows workers to contribute to the economy as consumers.