December 2022: The City of Los Angeles Passes Retail Fair Workweek Ordinance

07 Dec


Update Applicable to:
All employers in the city of Los Angeles, California.

What happened?
On November 22, 2022, the Los Angeles City Council voted to pass the proposed Fair Work Week Ordinance, which will place new onerous scheduling requirements on retailers by requiring employers to provide schedules two weeks in advance and penalizing employers who are unable to adhere to provided schedules.

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What are the details?

Impacted Employers
The proposed ordinance defines an employer as any retail business with over 300 employees globally. Notably, individuals employed through staffing agencies and employees of certain subsidiaries and franchises count towards the 300-person total.

To be considered an employer under the ordinance, entities must also identify as retail businesses in the North American Industry Classification System (NAICS) within retail trade categories and subcategories 44 through 45. (These categories include establishments primarily engaged in retailing merchandise and rendering services incidental to the sale of merchandise.)

Impacted Employees
Similar to other City ordinances, an employee is anyone working in the City of Los Angeles at least two hours or more per week for an employer and who is entitled to be paid at least minimum wage under Section 1197 of the California Labor Code and the California Industrial Welfare Commission’s published wage orders.

Employers Must Provide Estimates and Advance Notice
The ordinance will require employers to provide estimates and advance notice of schedules as follows:

  • Good Faith Scheduling Estimate & Notice: Employers must provide a good faith estimate of work schedules before hire and a notice of rights under the ordinance.
  • 10-Day Notice: Employers must provide a good faith estimate of a schedule within ten days of an employee’s request. If there is a substantial deviation from the estimate, the employer must have a documented business reason for the change.
  • Right To Request Changes: Employees can request a preference for certain hours, times, or locations. Employers may accept or deny requests, provided they notify the employee in writing of the reason for any denial.
  • Advance Notice: Employers must provide work schedules to their employees at least 14 days in advance by either posting or transmitting them electronically (or another reasonably calculated way to provide notice). Employers shall provide written notice of any employer-initiated changes after the advance notice period.
  • Right to Decline Schedule Change: Employees can decline any hours not included in the original schedule if an employer changes the schedule. And any consent to a schedule change must be in writing.

Hit Pause Before Hiring

Before hiring new employees (or bringing on contractors or temps), an employer must offer work to current qualified employees if the additional work would not result in overtime. Additional hours offered to current qualified employees must be conspicuously posted for at least 72 hours before hiring a new employee (unless all employees confirm they are not interested in the new hours, in which case, the employer can fulfill its staffing needs).

Employees who accept offers under these circumstances are not entitled to predictability pay (described below) if the additional hours result in schedule changes.

Pay To Change

“Predictability pay” will be required when a schedule is changed under certain circumstances. Employers will owe one hour of pay at the regular rate for changes in time, date, or location that do not result in loss of employee time or adds more than 15 minutes to an employee schedule. Employers will also owe half the employee’s regular pay rate for time not worked if the employer reduces the scheduled time by 15 minutes or more.

Predictability pay is not required for:

  1. Employee-requested schedule changes;
  2. Employees voluntarily accept schedule changes due to another employee’s absence;
  3. Hours changed as a result of the employee’s violation of the law or the employer’s policies;
  4. The employer’s operations are compromised due to force majeure; or
  5. Where extra hours would result in overtime payments.

Employers Must Find Coverage
Employers cannot compel employees to find coverage if they miss a scheduled shift.

Requirements For Rest Between Shifts
Employees cannot be scheduled to work on shifts less than 10 hours apart without written consent—e.g., an employee who is scheduled to close one day and open the next one. If an employee consents, they must receive 1.5 times their regular hourly rate for the second shift.

Records Retention Requirements
Covered employers must keep records for both current and former employees for three years, including:

  • Work schedules for all employees;
  • Copies of written offers to employees for additional work hours and written responses from employees;
  • Written correspondence between the employer and employees about work schedule changes like requests, approvals, and denials;
  • Good faith estimates of hours provided to new and existing employees; and
  • Any other records that may be required to demonstrate compliance.

Posting Requirements
Employers must post the City’s forthcoming notice to inform employees of these rights. Posters must be in English, Spanish, Chinese (Cantonese and Mandarin), Hindi, Vietnamese, Tagalog, Korean, Japanese, Thai, Armenian, Russian, Farsi, and any other language spoken by at least five percent of employees at the worksite.

Penalties Add Up
Employees must give employers written notice of any alleged violations and an opportunity to cure them before filing a claim with the City. Employers will have 15 days to cure alleged violations.

The City can recover up to $500 per violation per employee. Employees and the City will also be entitled to daily administrative penalties. Employees will be able to enforce the ordinance through a private right of action, and attorneys’ fees will be awarded to prevailing plaintiffs. (However, an entity enforcing the ordinance on behalf of the public shall only be entitled to equitable, injunctive, and/or restitution-based relief and reasonable attorneys’ fees.)

Employers are prohibited from discharging or retaliating against an employee in any way for participating in proceedings or seeking to enforce their rights under the Ordinance.

Looking Ahead
The Ordinance’s proposed effective date is April 1, 2023, violations during the first 180 days of the effective date shall be subject to a grace period. The City may promulgate rules and regulations (which will likely be issued closer to the effective date).

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For more information, please see the links below:

Fair Work Week Ordinance

Los Angeles City Council Meetings

North American Industry Classification System (NAICS)

Wage Orders

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What do employers need to do?

Employers should review the links provided above and should closely examine their scheduling practices and records retention procedures to ensure they are ready to be in compliance with the new law, as well as make sure their payroll departments are aware of the potential need to handle predictability pay.

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