Are Protections for Part-Time Employees the New Trend in Employment Law?
According to the U.S. Department of Labor, two out of every five employees in the hospitality industry work part time, which is more than double the ratio for most other industries. Part-time employees are a boon for owner/operators because they provide the flexibility in a workforce that caters to a fluctuating demand. For example, part-time workers can work full shifts during busy periods and fewer shifts during slower ones. To be sure, this is a significant benefit to owner/operators; however, many part-time employees would prefer to work a regular, fuller workweek as unpredictable scheduling can make it difficult for part-time employees to earn a steady, reliable income.
Part-time employee protection laws may be the next multistate trend for hospitality owner/operators. Several cities, including San Francisco, have recently enacted laws designed to protect part-time employees from unpredictable scheduling, often referred to as “predictive-scheduling legislation.” As we have seen in the past with paid sick-leave laws, employee-friendly legal trends oftentimes start locally. San Francisco was the first city to enact a paid sick-leave law, and now at least five states and 10 cities nationwide have enacted such legislation.
San Francisco’s “Retail Workers Bill of Rights”
San Francisco was the first city to enact predictive-scheduling legislation. (An overview of this legislation is available online.) In effect, since October 2015, the law applies to “formula retail establishments,” defined as companies with at least 40 retail establishments worldwide and 20 or more employees in San Francisco that have a standardized array of merchandise, décor, or color scheme; uniform apparel; or standardized signage or trade appearance.
The law requires covered employers to offer extra work hours to existing qualified part-time employees before hiring new employees or using contractors or staffing agencies to perform the needed work. Covered employers must also provide new employees with a good-faith written estimate of the employee’s expected minimum number of scheduled hours per shift and the days and hours of those shifts. In addition, an employer must post schedules two weeks in advance and is required to pay a penalty to employees if the employer changes their schedule with less than seven days’ notice. Employers must also treat part-time employees and full-time employees equally with respect to starting wages, availability of paid and unpaid time off, and eligibility for promotions. Finally, if a covered retail establishment is sold, the successor employer must retain (for at least 90 days) all eligible employees who worked for the former employer for at least six months preceding the sale.
San Jose and Seattle Have Enacted Similar Laws
In November 2016, San Jose voters approved a predictive-scheduling law that went into effect on March 13, 2017. Unlike San Francisco’s law, San Jose’s law does not target only “chain” or franchise retail establishments. Rather, the law applies to employers with more than 35 employees and that are subject to San Jose’s business tax. For chain or franchise businesses, every employee counts towards this threshold, regardless of whether he or she works in San Jose.
Similar to San Francisco’s law, Seattle’s Secure Scheduling Ordinance applies only to large retailers with 500 or more employees worldwide and to full-service restaurants with both 500 or more employees and 40 or more locations worldwide. Further, Seattle’s ordinance requires employers to (i) provide new employees with a good-faith estimate of the number of hours they can expect to work, (ii) post work schedules 14 days in advance, and (iii) offer additional hours to existing part-time workers before hiring new employees. But, unlike San Francisco’s law, Seattle’s ordinance also allows employees to request schedule preferences for things like caring for an ill family member, working another job, or attending school, and requires employers to engage in a good-faith “interactive process” to discuss such requests. Subject to some exceptions, an employee is also entitled to receive premium pay if he or she is (i) assigned extra hours after a schedule is posted, (ii) sent home early on a scheduled shift, or (iii) “on call” but not called into work.
Both the San Jose law and the Seattle ordinance require covered employers to offer extra hours to existing qualified part-time employees before hiring new employees, subcontractors, or temporary workers. San Jose’s law requires employers to use a “transparent and non-discriminatory” process to distribute hours among existing employees.
But perhaps the most onerous requirement for employers under these laws involves record-keeping and retention. Under both the San Jose law and the Seattle ordinance, an employer must retain for several years (four years under San Jose’s law and three years under Seattle’s ordinance) records for new hires that document the employer’s effort to first offer the additional work to existing part-time employees, along with work schedules and requests for scheduling changes. Failure to comply creates a presumption that the employer has violated the law. Both laws contain an anti-retaliation provision and a notice-posting requirement and allow aggrieved employees to bring a private lawsuit.
These laws are very likely only the beginning. New York City Mayor Bill de Blasio has announced his support of a group of bills, referred to as the “Fair Workweek” legislation, which are currently before the New York City Council. These bills are primarily aimed at the fast-food industry but contain components similar to the laws described above. Predictive-scheduling laws are also being considered in various states in addition to California, including Connecticut, Illinois, Indiana, Maryland, Michigan, Minnesota, and Oregon.
What Hospitality Employers Should Do Now
If you are located in a jurisdiction that already enacted a predictive-scheduling law, review your scheduling, on-call, and hiring practices as well as document retention policies and service contracts to ensure that they are in compliance with the law. If necessary, work with legal counsel to determine the appropriate revisions to such practices, policies, and contracts to bring them into compliance.
If you are in a jurisdiction that is considering predictive-scheduling legislation, contact your local Chamber of Commerce to see how you can get involved. Bear in mind that lawmakers have generally been open to employers’ concerns regarding predictive-scheduling and other similar laws and have shown a willingness to incorporate changes that make the laws less onerous for employers.