Regulations Adopted for Retail and Fast Food Establishments Under NYC “Fair Workweek” Law

by Davis Wright Tremaine LLP
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The NYC Department of Consumer Affairs has adopted regulations (here) regarding the Fair Workweek Law (“FWL”), which place detailed requirements that severely limit the flexibility and operational discretion of covered employers with respect to scheduling employees, hiring new employees to fill additional shifts, and their compensation. (Our advisory regarding the FWL can be found here). The regulations align NYC with a growing list of state and local jurisdictions limiting the manner and means by which operators run their businesses.    

Fast Food Employers

The new NYC regulations require fast food employers (the FWL uses the term “fast food employers” rather than “quick service restaurants”) to do the following:  

Good Faith Estimate of Work Schedule

Fast food employers are required to provide employees with a good-faith estimate of their work schedule and hours upon hire. A “good faith estimate” means the number of hours a fast food employee can expect to work per week for the duration of the employee’s employment and the expected days, times, and locations of those hours. If a fast food employer makes a “long-term or indefinite change” to the good faith estimate, it must provide an updated good faith estimate to the employee as soon as possible and before the fast food employee receives the first work schedule following the change.

A “long-term or indefinite change” means if any of the following exist in three work weeks out of six consecutive work weeks: (i) the number of actual hours worked differs by 20 percent from the good faith estimate during each of the three weeks; (ii) the days differ from the good faith estimate at least once per week; (iii) the start and end times of at least one shift per week differs from the good faith estimate by at least one hour and the total number of hours changed for the six week period is at least six hours; or (iv) the locations differ from the good faith estimate at least once per week.

Work Schedules for New Employees

On or before a fast food employee’s first day of work, a fast food employer must provide the new employee with written notice of an initial work schedule of no less than seven days containing all regular shifts and all on-call shifts the employee will work until the start of the first shift of the next subsequent work schedule.

Minimal Changes to Shift Times

Under the FWL, schedule change premiums must be paid to fast food employees for schedule changes made with less than 14 days’ notice. The regulations clarify that a fast food employer may change a work schedule by 15 minutes or less without being obligated to pay the fast food employee a schedule change premium.

Notice and Offer of Additional Shifts

Under the FWL, fast food employers are required to offer additional shifts to current fast food employees before hiring additional workers, including part-time employees or subcontractors. Specifically, fast food employers must offer regular or on-call shifts to their current employees “employed at all fast food establishments owned by the fast food employer, or at a subset of such fast food establishments.”  

The regulations provide the following notification process:

1. A fast food employer must notify fast food employees of the method by which additional shifts are posted upon hire and within 24 hours of any change to or adoption of a method. The fast food employer must also notify all accepting fast food employees when the additional shift has been filled as soon as possible after filling the shift.
2. A fast food employer must post notice of additional shifts for three consecutive calendar days, unless it has less than three days’ notice of the need to fill the additional shift in which case the fast food employer must post notice as soon as practicable and not more than 24 hours after finding out about the need to fill the shift.  In such a case, any existing fast food employee may be temporarily assigned to work an additional shift that is during the three-day notice period.
3. A fast food employer that owns 50 or more fast food establishments in New York City may offer additional shifts to: (i) fast food employees who work at all locations in New York City; or (ii) only to its fast food employees who work at its fast food establishments located in the same borough as the location where the additional shifts will be worked.

Accepting and Awarding Additional Shifts

The regulations establish rules regarding how fast food employers award additional shifts to its employees before hiring a new employee:
1. A fast food employer must first award additional shifts to fast food employees currently employed at the location where the additional shifts will be worked.
2. A fast food employee may accept an entire shift or any shift increment. However, a fast food employer is not required to award a fast food employee a shift increment when the remaining portion of the additional shift is three hours or less and was not accepted by another fast food employee(s).
3. A fast food employee may accept an additional shift that overlaps with his/her existing shift, and before hiring a new fast food employee, the fast food employer shall award the fast food employee the additional shift in lieu of the fast food employee’s scheduled shift. The fast food employer shall not condition the award of the additional shift on a fast food employee’s willingness to work both shifts.
4. A fast food employer is not required to award a fast food employee an additional shift if that would trigger overtime pay; provided, however, that the fast food employer must award the fast food employee the largest shift increment possible that would not trigger overtime pay so long as the remaining portion of the shift was accepted by another fast food employee or is three hours or more.

Fast Food and Retail Employers

Records Retention

Fast food and retail employers are required to retain the following documentation for three years: (i) actual hours worked by each employee each week; (ii) an employee’s written consent to any schedule changes, where required; and (iii) each written schedule provided to an employee. 

Additionally, fast food employers (but not retail employers) must retain documents showing the following for three years: (i) good faith estimates provided to employees; and (ii) premium pay to individual fast food employees and the dates and amount of the payments.

Lastly, a fast food and retail employer must: (i) provide a requesting employee with his/her work schedule for any previous week worked for the past three years within 14 days of the request; and (ii) provide a requesting employee with the most current version of the complete work schedule for all employees who work at the same location within one week of the request (except for employees who have been granted an accommodation based on domestic violence, stalking or sexual assault).

Notice Posting

Fast food employers (here and here) and retail employers (here) are required to post the linked notices of rights, which must be printed on and scaled to fill an 11x17 inch sheet of paper:

New Definitions

  • “Additional shift” is a shift not previously scheduled that would be offered to a new fast food employee but for the requirements of the FWL. 
  • “Clopening” means two shifts with fewer than 11 hours between the end of the first shift and the beginning of the second shift when the first shift ends the previous calendar day or spans two calendar days.
  • “Engaged primarily in the sale of consumer goods” as that term is used in the definition of “retail employer” means greater than 50 percent of sale transactions in a calendar year at one or more locations in New York City are to retail consumers.
  • “New fast food employee” means an employee who has not worked at least eight hours in the preceding 30 days for the fast food employer.
  • "Premium pay” means a required a schedule change premium or a “clopening” premium.

Conclusion

Now that the FWL and its regulations are effective, it is important that retail employers and fast food employers design strategies to run their businesses most effectively while complying with these new laws. 

Specifically, we advise that employers subject to the FWL: (i) train management on the elements of the FWL, including scheduling, notifying employees regarding changing employee shifts and additional shifts, recordkeeping requirements and the new required conditions that must be present before new employees can be hired to fill additional shifts; (ii) work with their payroll providers to implement automatic procedures and guidelines to ensure that employees are receiving premium pay when applicable; (iii) ensure that their communication mechanisms to employees (both electronic and hard copy) are able to timely provide employees with necessary information regarding additional shifts and shift changes in compliance with the FWL; (iv) track coverage needs to ensure that they are not  required to change shifts on short notice or alter good faith estimates to their employees; (v) design policies regarding how shift schedules are published and maintained to ensure compliance with the FWL’s recordkeeping requirements; and (vi) engage a consultant to help with scheduling programs and software.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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