Los Angeles City retail employers may soon be subject to significant new employee scheduling requirements. On November 22, 2022, the Los Angeles City Council unanimously passed the Fair Work Week Ordinance (the “Ordinance”). The new Ordinance, set to become effective on April 1, 2023, will require retail employers in the City of Los Angeles to provide employees at least 14 days’ advance notice of their work schedules and to compensate employees in the event of certain schedule changes. The Ordinance is still pending approval by the Mayor.

Los Angeles follows several other cities and states that have enacted similar laws including San Francisco, San Jose, Emeryville, Seattle, New York City, Chicago, Philadelphia, and Oregon.

Who Is Covered Under the Ordinance?

Employers with 300 or more employees globally are subject to the Ordinance if identified as a retail business by the North American Industry Classification System within retail trade categories 44-45. Notably, workers employed through temporary services, staffing agencies, subsidiaries and certain franchises count toward the 300 global employee threshold. 

Any employees who qualify for minimum wage and perform at least two hours of work in a workweek in the City of Los Angeles are subject to the Ordinance.

What Does the Ordinance Require?

Employers Must Provide Estimates & Advance Notice

Employers will be required to provide workers with a good faith estimate of their work schedule before hiring and within 10 days of a current employee’s request. If a worker’s actual work hours deviate significantly from the good faith estimate, the employer must have a documented, legitimate business reason that was unknown at the time the good faith estimate was given to the worker. An employee will have the right to request certain hours, times, or locations of work, and the employer may accept or decline the request. However, the employer must notify the employee, in writing, of the reason for any denial.

Employers will also be required to provide employees with advance notice of their work schedules at least 14 calendar days before the first day of the schedule. Notice may be provided electronically or by posting in the workplace. Any schedule changes including changes to date, time, or location, that occur after notice is given must be made in writing and employees have the right to decline any changes. If a worker accepts a schedule change made less than 14 calendar days before the work period, the acceptance must be in writing. 

Predictability Pay

Employers must also provide employees with “predictability pay” for some schedule changes or canceled shifts. For example, a worker will be entitled to one additional hour of pay at the employee’s regular rate as “predictability pay” if the change results in no loss of time or additional work time exceeding 15 minutes. On the other hand, if the change reduces an employee’s work time by 15 minutes or more, the employer must pay the employee one-half their regular rate of pay for the time the employee does not work due to the schedule change. 

However, predictability pay is not required where:

• An employee initiates the requested schedule change;

• An employee voluntarily accepts a schedule change initiated by an employer due to another employee’s scheduled absence;

• An employee accepts additional hours that were offered by the employer;

• An employee’s hours are reduced due to the employee’s violation of law or of the employer’s policies;

• The employer’s operations are compromised pursuant to law or force majeure; or

• Extra hours worked require the payment of overtime.

Additionally, employers are prohibited from requiring an employee to find coverage for a shift if they cannot work due to protected reasons. 

Rest Time Between Shifts

Employers are required to give employees at least 10 hours of rest between shifts unless the employee gives written consent to be scheduled for a shift that begins less than 10 hours after the conclusion of the previous shift. When an employee works a shift that is less than 10 hours after their previous shift, they are entitled to time and a half. 

Priority Rights for Current Employees

The Ordinance also requires covered employers to first offer additional work to current employees before seeking to hire new employees or using contractors or temps. Employers may only hire new employees to meet increased demand if no current employees are qualified or if none volunteer or if allowing current employees to take on the additional work would require the payment of overtime to current employees.

Requirements and Penalties

Employers are prohibited from discriminating or retaliating against employees for exercising rights under the Ordinance. The Ordinance also imposes notice, posting, and recordkeeping requirements.

An employer who violates the Ordinance is subject to penalties of up to $500 per violation per employee and administrative fines. Furthermore, the Ordinance provides a private right of action for any individual “aggrieved” by a violation of the Ordinance, and would allow aggrieved individuals to recover penalties and attorneys’ fees if they prevail.

While the Ordinance still needs to be approved by the Mayor, covered retail employers should examine their scheduling practices to start preparing to comply with the Ordinance.