On December 6, 2018, Philadelphia City Council passed the Fair Workweek Employment Standards Ordinance, which requires covered retail, hotel and food service businesses in Philadelphia to follow specific requirements when scheduling employees to work that are designed to provide stability and predictability to those employees, and to compensate employees for certain scheduling changes. If Mayor Jim Kenney signs the ordinance as expected (he has endorsed it publicly), it will go into effect January 1, 2020. Philadelphia is the second largest city (after New York City) to pass a scheduling law, and will become one of only a handful of jurisdictions in the country with such a law on the books. Introduced by Councilwoman Helen Gym, the law is expected to affect around 130,000 workers in Philadelphia.
Covered Employers and Employees
The ordinance covers larger, chain retail, hotel and food service establishments (including franchises) with 30 or more locations worldwide and 250 or more employees worldwide operating in the City of Philadelphia. Smaller chains and non-chain businesses are excluded from the law's coverage. The coverage of hotel workers is notable, as Philadelphia is the first municipality to pass a scheduling law that covers such workers.
The ordinance broadly covers all full-time, part-time, temporary and seasonal employees who work for a covered employer in Philadelphia and are nonexempt (i.e., eligible for overtime compensation) under federal or state law. Union-organized workers also are covered, though the law's requirements may be waived by a collective bargaining agreement.
The Ordinance's Scheduling and Pay Requirements
Effective January 1, 2020, the ordinance will impose several requirements on covered employers and provide several rights to employees, including the following:
- Covered employers must give new hires a written, good faith estimate of their potential work schedule. This estimate must be revised if there is a significant change in the employee's work schedule due to changes in the employee's availability or the employer's business needs. This estimate must include: (1) the average number of hours the employee can expect to work each week in a 90-day period; (2) whether the employee can expect to work on-call shifts; and (3) information regarding the days and times or shifts that the employee can expect to work (or days and times or shifts the employee will not be scheduled to work).
- Covered employers must post covered employees' work schedules at least 10 days in advance of a new work schedule beginning in 2020, and at least 14 days in advance of a new work schedule beginning after 2020.
- Covered employers must promptly revise posted work schedules to provide notice of proposed schedule changes.
- Covered employees may decline to work hours or shifts not in the posted work schedule.
- Covered employers must compensate employees for most last-minute, employer-initiated schedule changes (predictability pay), with limited exceptions set forth in the ordinance.
- Covered employers must allow for a minimum of nine hours of rest between shifts.
- Covered employers must provide extra compensation to employees who voluntarily work two shifts within the nine-hour rest period.
- Covered employers must post a notice of the new law. The notice also will be published by the City.
The ordinance expressly gives covered employees the right to make work schedule requests and to turn down shifts that are not included in the posted schedule or that are within the nine-hour rest period. It also prohibits employers from retaliating against employees who exercise these rights or who make a complaint about a violation of the ordinance.
Before hiring new employees, covered employers must provide at least 72 hours' notice of available shifts to current part-time employees, and generally must allow current employees to work any such shifts in which they are interested and timely express an interest in working, as long as the employee is qualified to perform the job and the shift(s) will not result in overtime. The ordinance also requires employers to keep certain records of employee schedules and any changes to those schedules.
Employees alleging a violation of the new law may file complaints with an agency designated by the City of Philadelphia to administer and enforce the law, and the agency may also investigate employers on its own initiative. The ordinance also provides a private civil right of action to aggrieved employees.
Available remedies for violations of the ordinance include reinstatement, restitution/back pay, penalties and fines, and the law directs the City to established presumed damages for an employer's violation of the law.
What This Means for Employers in Philadelphia
Beginning on January 1, 2020, the Fair Workweek Employment Standards Ordinance will have a substantial impact on the way that covered employers in Philadelphia hire and manage their workforce to meet customer demand. In light of the significant changes that will be required from a workforce scheduling perspective, covered employers promptly should begin taking steps to comply with the law so that they do not face significant disruption when the law takes effect on January 1, 2020.
Covered employers with union-organized workers will also want to consider negotiating a waiver of the law's requirements in an existing or new collective bargaining agreement prior to January 1, 2020.
As noted above, Philadelphia is following a growing trend of scheduling laws. New York City, San Francisco, Seattle and the state of Oregon have passed laws that regulate employer scheduling. As with the recent spate of so-called "salary history bans" and the "ban the box" laws before them, employers should expect more local and state governments to pass scheduling laws. New laws could expand into industries beyond just retail, hotel and food services, and although the scheduling laws passed to date primarily affect larger chains, smaller employers could find themselves included in subsequent legislation.
While the Philadelphia ordinance imposes a substantial burden on covered employers' operation of their business, it reflects the desire of employees to have more control over their schedules. Employers are encouraged to provide as much schedule predictability to employees as is reasonably possible, even where not covered by a scheduling law. Considering employees' concerns in this area will benefit not only the employees, but also the employer.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.