Untangling the Varying Requirements of State and Local Fair Workweek Laws

Many localities across the United States, including Los Angeles County, Los Angeles, Berkeley, San Francisco, and Emeryville, California; New York City, New York; Philadelphia, Pennsylvania; Chicago and Evanston, Illinois; Seattle, Washington; and the state of Oregon, have enacted a category of wage and hour rules commonly referred to as “fair workweek” or “predictable scheduling” legislation. These laws are designed to provide predictable schedules to employees across myriad industries, but most commonly the retail and hospitality industries, in order to allow these employees to plan their budgets, and coordinate multiple jobs and caregiving responsibilities. 

While the specifics of each locality’s fair workweek law vary, these ordinances generally seek to provide scheduling stability to employees in covered industries by: (i) requiring covered employers to publish work schedules at least 14 days in advance of the first day covered by the work schedule;¹ (ii) requiring covered employers to obtain consent from employees prior to adding hours or shifts to the employees’ work schedules once the schedules have been published and posted; (iii) prohibiting employers from unilaterally reducing hours included in a posted work schedule; (iv) requiring covered employers to pay their employees “schedule change premiums” when changing work schedules after the deadline to post the schedules passed; (iv) requiring covered employers to issue “good faith estimates” (which provide projections of the days the employee will be expected to work, and the work hours within those days) to their employees prior to commencing employment; (v) prohibiting covered employers from scheduling employees to work on back-to-back days with less than 10 or 11 hours between the end of the first shift and the start of the second shift, without first getting the employees’ consent to work such a shift and by requiring the covered employer to pay a “clopening premium” anytime such shifts are worked; and (vi) prohibiting covered employers from hiring new employees (or engaging contracted labor) before offering the shifts the new hire would work to existing employees. 

While these rules may appear simple or logical, covered employers have struggled to comply with these laws. The localities that enforce these fair workweek laws have pursued covered employers aggressively and have secured several 7-8-figure settlements. This is likely because each jurisdiction subjects covered employers to onerous recordkeeping requirements. Indeed, covered employers that fail to maintain the required records to demonstrate and establish compliance with the applicable predictive scheduling ordinances will often be presumed to have violated the applicable fair workweek law. Accordingly, all covered employers should frequently audit themselves and any automated recordkeeping systems they employ to facilitate fair workweek compliance, and should refresh their management about the applicable rules. To assist in that effort, we have drafted a high-level overview of the common fair workweek requirements which, again, will vary by jurisdiction.

Covered Employer and Employee

While retail and fast-food employers are covered employers under most jurisdictions’ fair workweek laws, some jurisdictions’ laws are more expansive. For example, Chicago’s law covers employers in the building services, healthcare, hotel, manufacturing and warehouse service industries. Likewise, San Francisco’s  fair workweek law covers employers that operate a “formula retail establishment,” which can include amusement game arcade operators, bars, drive-up facilities, eating and drinking establishments, liquor stores, massage establishments, movie theaters, restaurants, and many other businesses. It is important to check each jurisdiction’s statute to determine whether your business constitutes a “covered employer.” 

In general, the fair workweek ordinances generally apply to non-exempt employees who spend a defined period of time working for a covered employer within the geographic limits of a particular city. Generally, an employee’s residence is not factored into coverage determinations; however, coverage determinations can get tricky when employees are transferred among multiple work sites that cross city lines. Further complicating matters is that each jurisdiction has nuances when defining who “covered employees” are. Some laws, like Chicago’s fair workweek law, do not apply to non-exempt employees who earn above a specific hourly rate. Some fair workweek laws may not apply to non-exempt managers, while others may. Again, it is vital that any employer in a covered industry check its local rules.

Good-Faith Estimate

Covered employers are generally required to provide their employees with a written, good-faith estimate of their work schedule before the employees begins their first day of work. This good-faith estimate must identify the projected days and hours the employee can expect to work for either a specified period of time or for the duration of employment. While the good-faith estimate is not a binding contract,² some jurisdictions (e.g., Philadelphia, Los Angeles City and Los Angeles County) regulate how much a weekly schedule can deviate from a good-faith estimate and require covered employers to update the good-faith estimate when there is a long-term and indefinite change to the projected days and hours of work. Other jurisdictions, like Seattle, provide that the good-faith estimate expires a year after issuance, and must be updated at that time. To comply with this facet of the fair workweek laws, covered employers can develop standardized onboarding procedures where they obtain a new employee’s availability and use that availability to craft a good-faith estimate within the new hire’s windows of availability in order to ensure that the employee will actually be working during the times reflected in the good-faith estimate. Employers within jurisdictions that require periodic updates to the good-faith estimate, can establish protocols to ensure that the good-faith estimate reflects their employees’ actual work schedules.

Right to Request Changes to Work Schedule

Several, but far from all, ordinances provide employees with the right to request certain work hours, work times, or locations of work. Generally, employers may accept or decline the request if they notify the employee, in writing, of the reason for any denial (see, e.g., Philadelphia, Berkeley, Emeryville, LA City, LA County, and San Francisco). Chicago and Evanston, Illinois have similar rules, but require the covered employer to notify the employee of their decision to accept or reject the requested change within three days. Seattle has the most onerous right to request schedule change rule. In Seattle, at the time of hire and during employment, if the employee's request is due to a major life event (as defined by the ordinance), the covered employer must engage in an interactive process with the employee to discuss the request, and may require verifying information from the employee with adequate notice and reasonable time to respond. The employer must grant the request unless the employer has a bona fide business reason for denial and, if it does, it must provide a written response to the requesting employee.

Advance Notice of Work Schedule

Employers are generally required to provide employees with advance notice of their work schedules at least 14 calendar days before the first day of the schedule. Typically, schedules must span a week’s worth of time; and covered employers are typically required both to deliver a copy of the schedule to each covered employee by electronic or in-person means and to post the weekly work schedules in a conspicuous location in the workplace.

Most jurisdictions also require covered employers to both deliver and post updated schedules if they make changes to the weekly schedule, including changes to date, time, or location of any scheduled (or unscheduled) shift that occurs after the deadline to post and deliver the schedules. Most jurisdictions require covered employers to keep and maintain records that demonstrate the date and time each schedule was posted at the workplace and the date and time each schedule was individually transmitted to each employee. 

Access to Hours for Current Employees

Most jurisdictions that have fair workweek laws³ and other jurisdictions including San Jose, California, Burien, Renton, Seattle, Tacoma, Tukwila and Everett, Washington prohibit covered employers from hiring new employees (including contractors and temporary employees) unless they have first offered additional work hours and shifts to current employees. 

While the process of offering the open shifts to current employees varies by jurisdiction, typically covered employers must both post, and individually deliver a written (or electronic) notice of open shifts that identify: (i) the role that needs to be filled, (ii) the projected dates and hours of work that the covered employer needs to fill, (iii) identify whether the shift is permanent or temporary, and (iv) provide instructions to employees to volunteer to fill the open shifts. Some ordinances specify the length of time the offer must remain open to current employees (usually between 24 and 72 hours) while others simply require the offer be posted for a “reasonable time” without a further definition of that duration.

Some jurisdictions require covered employers to offer the open shifts to all employees, while other jurisdictions merely require covered employers to offer open shifts or hours to employees that the covered employer reasonably determines are qualified to perform the available work. For example, if a covered employer needs to fill cashier shifts, that employer would not be required to offer cashier hours to employees who have not been trained in cash handling or in the use of the employer’s point-of-sale system in the jurisdictions that allow the covered employer to limit the recipients of the notice.

Covered employers may only hire new employees to meet increased demand if: (i) no current employees are qualified to fill the open position; (ii) no current employees volunteer to claim the open hours; or (iii) allowing current employees to take on the additional work would require the payment of overtime (or other premium pay) to current employees. 

Some jurisdictions affirmatively state that an employee who accepts these “access to hours” offers do not get predictability pay for such changes, while other jurisdictions do require predictability pay for employees who accept such offers.

Premium Pay for Work Schedule Changes

With the exception of covered retail employers⁴ in New York City, covered employers in each fair workweek jurisdiction are required to issue premium pay whenever they change a covered employee’s work schedule after the deadline for transmitting/posting the initial work schedule has passed. While the method for calculating the amount of schedule change premiums varies by jurisdiction, typically, the covered employer will be required to pay employees one additional hour of pay at the employee’s regular rate of pay when the schedule change results in no loss of time or additional work time exceeding 15-20 minutes (depending on the jurisdictional grace period).⁵ Changes that result in a loss of work time typically require the employer to compensate the employee at one-half of the employee’s regular rate of pay for the total amount of reduced hours.⁶ Again, many jurisdictions have different formulas for calculating the amount of schedule change premium pay, so it is vitally important to check your local jurisdiction’s rules. 

Generally, covered employers will not be required to issue premium pay when:

• An employee initiates the requested schedule change (usually this must be memorialized in some written document);
• An employee’s hours are reduced due to the employee’s violation of law or of the employer’s policies;⁷
• The employer’s operations are compromised pursuant to law, an act of God, or utilities failure; or
• Employees mutually swap shifts with each other pursuant to company policy.

Notably, an employee simply agreeing or consenting to work additional hours or shifts does not exempt a covered employer from having to pay the employee schedule change premium pay. Additionally, covered employers are generally prohibited from requiring an employee to find coverage for a shift if they cannot work due to protected reasons. As always, exceptions to the schedule change premium pay requirements vary by jurisdiction, so checking local rules is essential.

Consent/Right to Decline Schedule Changes

In addition to paying premium pay for alterations described above, each jurisdiction requires that employees either provide consent for the schedule change, or provides the employee the right to decline the schedule change. Employers cannot retaliate against employees who withhold consent or who exercise their right to decline the schedule change. However, when employers need to reduce shift lengths or cancel shifts altogether, they do not need to obtain employee consent, and employees do not have right to decline the reduction or cancellation. 

Rest Time Between Shifts (Clopening)

Employers are required to give employees at least 9 to 11 hours of rest between shifts unless the employee gives written consent to be scheduled for a shift that begins fewer than 9 to 11 hours after the conclusion of their previous shift. When an employee consents to work a shift that starts less than 9-11 hours after their previous shift, they are entitled to premium pay which varies per jurisdiction, but can be as high as time-and-a-half (1.5x) the hourly rate for some or all hours worked in the second shift.

In Los Angeles County, for example, if an employee works 4:00 p.m. to midnight on Saturday, and then accepts a shift from 8:00 a.m. to 4:00 p.m. on Sunday, the employee would earn time-and-a-half only for the first two hours of the Sunday shift, and not the entire shift on Sunday.

Record Keeping

Each jurisdiction requires that the employer maintain sufficient records to demonstrate compliance with the rules. Thus, employers must document the issuance (and reissuance as required) of good-faith estimates, offers of work to existing employees, proof of when and where every schedule was published to each employee and republished when changes were made, the reason for each change, that premium was paid when required or that a certain exception applied, that consent was given for the change, and that consent for working a clopening shift was provided. These records generally must be kept for three years. 

This becomes the most tedious aspect of compliance for many employers as they have to consider, at every location, how they will manage and document shift changes.⁸ For many industries, shift changes used to be rather informal, perhaps via telephone or text message. However, the absence of documentation on behalf of the employer during an investigation supports the finding of a violation. In addition to maintaining records of the changes, those records also need to document the reason for the change to support an argument that an exception to predictability pay applied. Additionally, payroll records should be amended to readily reflect fair workweek compliance pay so that investigators can see, in every pay period, that fair workweek premium were paid when necessary. 

Penalties and Enforcement

As noted earlier, many administrative agencies that enforce fair workweek laws have recovered millions of dollars from companies those agencies accused of violating the ordinances. In addition, the class action bar has begun filing class actions alleging violations of applicable fair workweek ordinances. One reason why these agencies and the class action bar have been aggressively pursuing these claims is that each ordinance includes hefty penalties—ranging from $300-$1,000 per violation per employee per day—paid both to the employee and to the city/county/state for violations of fair workweek rules. Additional penalties can also be assessed for alleged repeat offenders.

A prevailing employee will be entitled to such legal or equitable relief as may be appropriate to remedy the violation, including, without limitation, the payment of any minimum wages, the payment of penalties, reinstatement in employment and/or injunctive relief, and sometimes reasonable attorneys’ fees and costs. 

Next Steps

Compliance with predictable scheduling laws provides a host of structural and cultural challenges for covered employers. For example, managers need to be trained to realize that they are obligated to finalize, publish, and distribute schedules with far more advance notice than they may be used to. Similarly, managers need to be reminded that predictable scheduling laws prohibit even minor schedule deviations. Managers who may be used to texting with employees and asking employees to cover for shifts need to understand that their employees can decline the request, and if the employee consents, that consent should be documented somewhere besides the manager’s cell phone. Likewise, managers must ensure that employees leave at the scheduled end time of their shift, even if they are busy. Allowing employees to stay more than 15-20 minutes after the scheduled end time, without an employee’s consent, could constitute a violation and schedule change premium pay would be owed. Perhaps most difficult, managers need to understand that they simply cannot hire new employees to meet anticipated demand. Instead, they need to comply with the access to hours process or risk incurring heavy fines and penalties.