Complete Guide: The Fair Workweek Ordinance for Retail
What’s abundantly clear is that there is little to no information available for retail operators to lean upon to understand and address retail Fair Workweek compliance. Retail workers are equally affected by the ordinance and as such, there’s pressing concern for retail operators on how to specifically navigate the operational complexities it presents and how to simply answer, ‘How do I comply at scale?’ Employers not only are forced to navigate the global health crisis, but also implement major changes to their operations. While these changes are largely for the better, they can be difficult to follow properly, especially if you do not have the most up-to-date information.
This complete guide will thoroughly explain what Fair Workweek means for retail companies, provide a breakdown by city, and introduce the Harri solution.
Have retail Fair Workweek laws recently changed due to COVID-19?
No, and here's the breakdown.
Who is considered a “covered” employer or employee?
Employers are considered ‘covered’ based on the amount of employees they have and amount of locations worldwide. For instance, in Chicago a covered employer is someone who has over 100 employees (250 or more in non-profit businesses) and 50 of those employees are covered. The following types of employees are considered covered under the Fair Workweek Ordinance:
- Employees who are entitled to overtime pay under State or Federal laws
- Retail front desk or front-of-house employees who greet and/or provide service to customers
- Employees who work in the direct provision of retail (this also includes floor managers)
- Persons involved in maintenance at a retail location (work has to involve occasional response to customer requests)
- Persons involved in security at a retail location (work has to involve occasional customer contact)
- Pharmacy and/or medical staff at a retail location
- Employees who complete sales (delivery drivers)
So, what does the Fair Workweek Law actually mean?
The retail Fair Workweek Ordinance is a wide piece of legislation that has implications for retail, hospitality, and food service employees that fall under the requirements. It is currently estimated that over 1.8 million employees are expected to be impacted by Fair Workweek’s requirements. As an employer, you are encouraged to consult with your own legal counsel to determine the appropriate procedures and policies to properly comply with the Ordinance.
This new Ordinance has two particularly important components for operators to be cognizant of. There is a distinction that exempts employers from paying predictability pay when “war, civil unrest, strikes, threats to public safety, or pandemics” leads to a schedule change. As we are in the midst of a global pandemic, this is a complication. It remains unclear if an exemption will be applied.
Second, the Ordinance states that employers are not required to complete predictability pay when a schedule change is “mutually agreed upon” by the employer and employee, or if the covered employee requests a shift change that is confirmed in writing. If this information is not in writing or gets miscommunicated, it could mean a hefty fine.
Front-line managers and payroll personnel must be trained by employers to comply with new scheduling policies and requirements. Employers also should be getting into the habit of seeking employee agreement to shift modifications as much as possible. This is more favorable to require employees to work atypical shifts. It is also important to put in writing the agreed-upon shift changes made after the work schedule has been posted and have the employee sign it. As of now, employers are required to give employees 10 days notice of their schedules, but this will increase to 14 days in 2022.
According to the Ordinance, Employees will have the right to decline to work previously unscheduled hours and be paid for an additional hour of work if their schedule changes within the 10 days. They also have the “right to rest”, which means they can decline a new shift less than 10 hours after the end of their previous shift.
What is predictability pay?
Employers will be required to pay one hour of predictability pay any time they add to an employee’s work shift or change the date/time/location of a shift, with no loss in hours. This ‘predictability pay’ is a way for employees to cover themselves in the event of a loss in hours. There are a few exceptions to this, including:
- An employee voluntarily works additional hours due to another employee’s inability to work (has to be in response to a written communication offering the hours that makes it clear that the employee accepting hours is doing so voluntarily).
- If an employee makes a written request to change his or her schedule.
- Any other voluntary trades in shifts.
What is a good faith estimate?
A good faith estimate is a document provided at the time of hire by a covered employer that articulates an estimate of what the employee’s work schedule will be. However, sometimes this estimate is not perfect. The requirements for a good faith estimate are as follows:
- The posted work schedule must include all employees’ shifts, whether they are scheduled to work (or be on call) that week or not.
- An employee’s work schedule has to be posted no later than 10 days before the start of a new schedule.
- A written notice of the work schedule must be in an accessible and clear location where the rest of the employee notices are posted. Electronic postings of the schedule should also be posted in locations typically viewed by employees.
How does this affect hiring new employees?
As we have seen, reopenings are calling for an increase in new employees. However, now there is complying with the Fair Workweek Ordinances on this to navigate. The rhetoric is that employers must offer any additional hours to current employees before they can hire new employees. This action protects the current employees of your establishment and ensures that the new person you hire will be able to work enough hours to make ends meet.
How does the ordinance vary
from city to city?
The ‘new normal’ for per diem employees and employers.
In Chicago, the Fair Workweek Ordinance includes: a good faith estimate, observing the right to rest, advance notice on scheduling, and predictability pay. The Ordinance went into effect July 1st, 2020, despite the health crisis. Read more about Fair Workweek in Chicago here.
New York City
In New York City, fast food and retail employers must provide their employees with 14 days notice of changes to their schedules. Premium pay in this city would occur when: an employee covers the shift of a sick coworker, the business remains open for delivery or takeout and staff is asked to work different shifts and/or additional hours (in response to COVID-19), and when their place of work cancels a scheduled shift or reduced hours due to a decrease in business. Read more about Fair Workweek in New York City here.
What it means to be a “covered employer” in Philadelphia is different than in other parts of the country. In Philly, someone is considered covered if they are an employer in the retail, hospitality, or food service industry that employs 250 (regardless of where the employees perform work) or more employees and has at least 30 locations worldwide. Read more about specific Fair Workweek Ordinance requirements in this article.
Fair Workweek is more colloquially known as ‘predictive scheduling laws’ in California. These affect “Formula Retail Establishment” chains with more than 40 locations worldwide. This includes bars, restaurants, take-out shops, and has more than 20 employees in the city. Shifts have to be scheduled 14 days in advance and clearly reported to avoid costly fines. Read more about specific Fair Workweek Ordinance requirements in this article.
The ‘Secure Scheduling Ordinance’ in Seattle covers retail and food services establishments with 500 or more employees worldwide. Full service restaurants must have more than 40 full-service locations worldwide. This Ordinance went into effect in 2017. The city of Seattle requires time and a half to be paid when employees work shifts less than 10 hours apart. Read more about Fair Workweek in Seattle here.
As Fair Workweek Ordinances become the norm, it can be difficult to navigate how to implement these changes into your business’s routine. Harri, as part of our scheduling solution, has created a Fair Workweek component for the jurisdictions that require it. We are one of the only solutions on the market to keep up with the requirements and do it automatically. Mistakes are dangerous, especially with fines up to $1,000 a day for not complying. Our solutions are designed to empower your teams with the ability to monitor scheduling fees, manage schedules, and properly report premium pay.
When looking for a retail Fair Workweek software to implement, consider these 5 must-haves:
- Good faith documentation
You are going to need a software that allows you to manage, distribute, and complete good faith estimate documentation with employees throughout the pre and post hire process.
- Receive real-time alerts
Schedule changes and time-off requests can happen at any moment, so it is crucial that you are alerted to them in real-time. This means the requests get processed as quickly as possible, and you are complying with the requirements of Fair Workweek considerations and tracking.
- Prevention management
Through our solutions, you will be notified when creating changes to a schedule that will result in acquiring premium pay penalties. A good software should create accountability and alert you when potential issues arise.
- Demand forecasting
An effective software should build schedules that utilize data, demand forecasting, and activity-based intelligence to assess the precise amount of labor needed weeks in advance. This keeps employees from feeling in the dark about their schedule and have more flexibility in their day-to-day lives.
- Audit violations
You need to be armed with the ability to view and audit detailed reports on all the premium payments that resulted from scheduling changes.
Fair Workweek regulations can seem daunting, but with the proper tools, it is very doable. Our software solutions can help eliminate risk, empower employees, and make this transition easier. This is a difficult time for retail operators, so let Harri ease some of the burden. Having less stressed management and happier employees leads to a boost in your business’s productivity, so why not start now?