The Effect of New York City’s Fair Work Week Laws on Retailers and Fast Food Establishments
Paula Lopez, July 10, 2017.
New York City’s recently passed package of bills, referred to as “Fair Work Week” laws, impose significant scheduling and notice requirements on certain businesses operating in New York City. The laws will go into effect on November 26, 2017. Employers covered by this law include retail businesses and fast food establishments, which are known for subjecting employees to changing work schedules.
A “fast food establishment” covered by the new law is defined in the same way as a “fast food establishment” subject to New York State’s fast food minimum wage requirements, which is one that:
- Primarily serves food or drinks, including coffee shops, juice bars, donut shops, and ice cream parlors; and
- Offers limited service, where customers order and pay before eating, including restaurant with tables but without full table service, and places that only provide take-out service; and
- Is part of a chain of 30 or more locations, including individually owned establishments associated with a brand that has 30 or more locations nationally.
The new law defines “retail business” as any entity with 20 or more employees that is engaged primarily in the sale of consumer goods at one or more stores within New York City. Full-time, part-time, and temporary employees are counted in calculating the number of employees working for a retail business. The law defines “consumer goods” as “products that are primarily for personal, household, or family purposes, including but not limited to appliances, clothing, electronics, groceries, and household items.” Examples of covered retail businesses include clothing stores, shoe stores, department stores, grocers, and retail pharmacies.
New York City’s Department of Consumer Affairs, Office of Labor Policy & Standards (“OLPS”) will be responsible for enforcing the law and has been authorized to impose monetary penalties against employers found to have violated the law. OLPS will also be publishing posters detailing the rights afforded by the new law and which covered employers are required to conspicuously post in the workplace. Employers are prohibited from retaliating against employees who assert their rights under the law. Aggrieved employees have the right to either file a claim with the OLPS or file an action in court against an employer for violations of the law within two years of the alleged violation.
The requirements of the laws differ for fast food establishments and retail business.
Beginning November 26, 2017, retail businesses are prohibited from scheduling “on-call” shifts for all employees (salaried or non-salaried), and must provide at least 72 hours’ notice of an employee’s work schedule and any change to the schedule. The work schedule must be posted in the workplace 72 hours prior to the earliest scheduled shift. An employer who makes any changes to the posted schedule must note the changes directly on the posted schedule AND directly notify the affected employees. This includes sending a copy of the schedule by electronic means, if the parties customarily communicate in such a manner.
The restriction prohibiting an employer from canceling a scheduled shift with less than 72 hours’ notice will not apply in circumstances where the employer cannot operate due to emergencies (natural disasters, fires, floods, public transportation outages, etc.) An employee can waive the restriction prohibiting an employer from requiring an employee to work a shift with less than 72 hours’ notice by providing written consent. Also, the law does not prevent employers from permitting employees to swap shifts or from granting requests for time off.
The law contains a record-keeping component, which requires employers to maintain and provide an employee, upon request, with a written copy of that employee’s work schedule for any week the employee worked during the prior three years, along with a copy of the most current work schedule for all retail employees at the work location.
Fast Food Employers
The scheduling requirements under the new law apply only to non-salaried fast food employees whose duties include customer service, cooking, food or drink preparation, delivery, security, stocking supplies, cleaning or routine maintenance. Employers are required to do the following with regard to scheduling:
- Provide each new hire with a “good faith” estimate of the employee’s work schedule in writing (estimated number of hours expected to work in a week, times expected to work, and location of the work.) If an employer makes any long-term changes to the employee’s anticipated schedule, it must provide the employee with an updated good faith estimate, before the schedule change goes into effect.
- An employer must provide each employee with 14 days’ advance notice of the work schedule covering a period of at least 7 days (containing all regular and on-call shifts for an employee).
- An employer must also conspicuously post the work schedule at the workplace 14 days in advance of the start of the schedule.
- If a fast food employer makes changes to an employee’s schedule with less than 14 days’ notice, it must pay the employee a schedule change premium (the amount of which varies based on the type of change and amount of notice given), in addition to the employee’s regular pay for shifts worked.
Amount of Premium
-$10.00 for each change made with at least 7 days’ notice where hours or shifts are added or the start and end time of a shift changes but there is no loss of hours. $15.00 for the same changes if made with less than 7 days’ notice.
-$20.00 for each change made with at least 7 days’ notice where hours are subtracted from a shift or a shift is cancelled. A $45.00 premium must be paid for the same changes if made with less than 7 days’ notice.
-$75.00 for each change made with less than 24 hours’ notice where hours are removed from a shift or a shift is cancelled.
Exceptions to Employer’s Obligation to Pay Change Premium
-Schedule change is requested by employee in writing or a result of a voluntary shift swap by employees.
-The employer is required to pay the employee overtime for the added shifts/hours.
-The change in schedule is due to an inability of the employer to operate because of an emergency (natural disasters, fires, floods, public transportation outages, etc.)
- The law prohibits an employer from scheduling an employee to work a closing shift followed by an opening shift where the two shifts are less than 11 hours apart unless the affected employee requests or consents, in writing, to working the two shifts. Absent the employee’s written consent, an employer who schedules an employee to work a consecutive closing/opening shift must pay a $100 premium to the employee.
- The law requires a fast food employer to first offer additional work shifts to existing employees at the location where the shifts are available, and then at other locations before hiring new employees to fill the available shifts. This requirement does not apply if existing employees have already rejected the additional shifts, or an employer would be required to pay the existing employee overtime for the additional shifts.
- The law also imposes a 3-year record-keeping requirement on the employer with regard to employee work schedules. Upon request of an employee, an employer must provide an employee with a copy of an employee’s work schedule for any week during the prior 3 years and a copy of the most current version of the work schedule for all fast food employees at the same location.
In addition to the various scheduling requirements, the new law permits all fast food employees (salaried and non-salaried) to make voluntary contributions to a registered not-for-profit organization through payroll deductions. This imposes a requirement on fast food employers to set up a payroll deduction process to withhold wages and pay them directly to the not-for-profit organization requested by the employee. An employer is not required to honor an employee’s contribution request if it is less than $3.00 (weekly) or $6.00 (bi-weekly). Also, an employer can request the not-for-profit to reimburse it for the costs associated with the deduction and remittance of the contribution as per DCA’s rules. In processing an employee’s contribution request, employers must remain cognizant of New York’s Labor Laws and ensure that the requested deductions do not bring the employee’s hourly wage below the minimum wage rate, and may refuse to honor the employee’s contribution request if it would result in a violation of New York’s minimum wage laws.
Employers in the retail and food establishment industry should familiarize themselves with the various requirements imposed by the Fair Work Week laws and contemplate the operational and payroll changes that will need to be implemented to comply with the various requirements.