On March 1, 2019, the New York State Department of Labor (NYSDOL) announced that it is no longer pursuing predictive scheduling regulations (or “call-in pay”) that would have affected most employers in the state. For the time being, New York employers do not have to worry about pending statewide regulations regarding call-in pay. Keep in mind, however, that New York City employers are still subject to the Fair Workweek Law.

The proposed NYSDOL regulations would have required employers provide “call-in pay” ranging from two to four hours at the minimum wage in these scenarios:

  • if the employee reports to work and is sent home early,
  • when a shift is scheduled less than 14 days before the start of the shift,
  • when shifts are cancelled less than 72 hours before the start of the shift,
  • when an employee is required to be in contact less than 72 hours before the shift to find out whether to report for that shift, and
  • when an employee is required to be on call.

The NYSDOL decided to let the proposed regulations expire after receiving “extensive feedback” during the comment period, and issuing a subsequent round of revised regulations that included exemptions. The NYSDOL did, however, expressly leave open the possibility of re-evaluating predictive scheduling laws in the future with the New York State Legislature.  Stay tuned for future developments in this area.

Our colleague Kevin Sullivan at Epstein Becker Green has a post on the Wage and Hour Defense Blog that will be of interest to our readers in the retail industry: “California Court of Appeal Concludes That Certain Types of On-Call Scheduling Triggers Requirement to Pay Wages.”

On February 4, 2019, a divided panel of the California Court of Appeal issued their majority and dissenting opinion in Ward v. Tilly’s, Inc. It appears to be a precedent-setting decision in California, holding that an employee scheduled for an on-call shift may be entitled to certain wages for that shift despite never physically reporting to work.

Each of California’s Industrial Welfare Commission (“IWC”) wage orders requires employers to pay employees “reporting time pay” for each workday “an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee’s usual or scheduled day’s work.” …

Read the full post here.

The New York State Department of Labor (“DOL”) recently issued proposed statewide regulations that would require employers to pay employees “call-in pay” when employers use “on call” scheduling or change employees’ work shifts on short notice. This is not the DOL’s first foray into this area – in November 2017, the DOL released similar proposed regulations but ultimately declined to adopt them. The DOL’s new set of proposed regulations would apply to the vast majority of employers operating in New York, but are of particular interest to New York City retail employers, who regularly use “on call” scheduling, and who are already subject to the New York City Fair Workweek laws.

When Would Employers Have to Pay Call-In Pay?

The proposed regulations would require employers to pay their employees “call-in pay” under the following five circumstances:

  • Reporting to work: An employee who reports to work for any shift at the request or permission of the employer must receive four hours of call-in pay.
  • Unscheduled shift: An employee who reports to work at the request or permission of the employer for a shift that was not scheduled at least 14 days in advance must receive two hours of call-in pay.
  • Cancelled shift: An employee whose shift is canceled by the employer within 14 days of the start of the shift must receive two hours of call-in pay. If the employee’s shift is cancelled within 72 hours of its scheduled start, the employee must receive four hours of call-in pay.
  • On-call: An employee who is required by the employer to be available to report to work for any shift must receive four hours of call-in pay.
  • Call for schedule: An employee who is required to contact the employer within 72 hours of the start of a shift to confirm whether to report to work must receive four hours of call-in pay.

Call-in pay for time that an employee actually attends work should be calculated at the employee’s regular rate or overtime rate of pay. All other call-in pay should be calculated at the basic minimum hourly rate with no allowances.

Exceptions to the Call-In Pay Requirements

The proposed regulations do include a number of exceptions to the call-in pay requirement, including the following:

  • The proposed regulations do not apply to employees who are covered by a valid collective bargaining agreement that expressly provides for call-in pay.
  • An employee would not be entitled to call-in pay during any work week in which his or her weekly wages exceed 40 times the applicable basic hourly minimum wage rate.
  • Employers do not need to pay call-in pay for unscheduled shifts for new employees during their first two weeks of employment, or for any employee who volunteers to cover a new or previously scheduled shift.
  • In the event that an employer responds to a weather or other travel advisory by offering employees the option to voluntarily reduce or increase their scheduled hours (i.e., arrive early/late, depart early/late), the employer does not need to pay call-in pay for employees’ unscheduled or canceled shifts.
  • An employer does not need to pay call-in pay when it cancels a shift at the employee’s request for time off, or due to an act of god or other cause outside the employer’s control.

Special Note for New York City Retail Employers

Retail employers operating in New York City are already subject to the Fair Workweek laws, which took effect in November 2017. Under the City law, retail businesses must schedule employees’ shifts at least 72 hours in advance, and cannot add or cancel shifts with less than 72 hours’ notice. In addition, retailers generally cannot require employees to come to work with less than 72 hours’ notice, or require them to call in within fewer than 72 hours before the start of a shift to determine if they should come to work. The DOL’s proposed regulations, however, would permit employers to take these very same actions as long as they pay employees the correct amount of call-in pay. The DOL’s proposed regulations do not address this potential conflict with the New York City Fair Workweek laws, or any other potential impact on the existing City law.

The comment period on the DOL’s proposed regulations has closed, and we can expect that they could be adopted as early as the first quarter of this year. It is more likely that the DOL will adopt these regulations on this go-round – especially given the current political climate within New York State (including the most recent mid-term elections, which put Democrats in control of the state legislature). We will keep you updated with any further developments. If the regulations are adopted, all New York employers – particularly retail employers in New York City – should contact counsel to ensure that their policies are updated and in compliance.

Our colleagues  at Epstein Becker Green have a post on the Hospitality Employment and Labor blog that will be of interest to many of our readers in the retail industry: “New Massachusetts Department of Family and Medical Leave Launches Website, Issues First Round of Guidance.”

Following is an excerpt:

The brand-new Massachusetts Department of Family and Medical Leave (“DFML”) has launched its webpage and issued the first set of guidance for both employers and employees. The DFML was created to help facilitate the implementation of Massachusetts’ new Paid Family and Medical Leave programs (“PFML”). The deadline for employers to start making contributions toward the PFML programs is July 1, 2019, and employees may begin receiving benefits beginning on January 1, 2021.

The DFML’s first set of guidance provides comprehensive FAQ documents, one for employers and one for employees. …

Read the full post here.

Our colleagues   at Epstein Becker Green have a resent post on the Wage and Hour Defense Blog that will be of interest to our readers in the retail industry: “California Supreme Court’s Clarification of De Minimis Doctrine Leaves Many Questions Unanswered – and Does Little to Ease Plaintiffs’ Path to Class Certification.”

On July 26, 2018, the California Supreme Court issued its long-awaited opinion in Troester v. Starbucks Corporation, ostensibly clarifying the application of the widely adopted de minimis doctrine to California’s wage-hour laws. But while the Court rejected the application of the de minimis rule under the facts presented to it, the Court did not reject the doctrine outright. Instead, it left many questions unanswered.

And even while it rejected the application of the rule under the facts presented, it did not address a much larger question – whether the highly individualized issues regarding small increments of time allegedly worked “off the clock” could justify certification of a class on those claims. …

Read the full post here.

A legislative bargain requires give-and-take from all stakeholders. On June 28, 2018, Massachusetts Governor Baker signed House Bill 4640, “An Act Relative to Minimum Wage, Paid Family Medical Leave, and the Sales Tax Holiday” (the “Act”). This “grand bargain” gradually raises the minimum wage, provides for paid family and medical leave, makes permanent the Commonwealth’s annual tax holiday, and phases out Sunday and holiday premium pay requirements. While Massachusetts employers must now adjust to an increased minimum wage and new paid family medical leave program, retailers with eight or more employees may see those costs mitigated by the gradual elimination of Sunday and holiday premium pay mandates.

Currently, Massachusetts retailers must provide premium pay of 1.5 times the regular hourly rate to non-exempt employees who work on Sundays or certain holidays designated by state law. The holidays covered by the premium pay laws are New Year’s Day, Memorial Day, Independence Day, Labor Day, Columbus Day, and Veterans Day. The premium pay requirements do not apply to employees who are exempt from overtime pay mandates under Massachusetts law, specifically executive, administrative, and professional employees who earn more than $200 per week.

The Act will reduce, and ultimately remove, Massachusetts’ Blue Law premium pay requirement in accordance with the following schedule:

Effective Date Premium Pay Rate
January 1, 2019 One and four-tenths (1.4)
January 1, 2020 One and three-tenths (1.3)
January 1, 2021 One and two-tenths (1.2)
January 1, 2022 One and one-tenth (1.1)
January 1, 2023 No premium pay

Though covered employers will no longer be required to offer premium pay for Sunday and holiday work, the other provisions in the Blue Law remain unchanged. As such, retail employers may not require employees to work on Sundays or holidays, nor may employers discriminate or take adverse action against employees who refuse to work such shifts.

The phase out of premium pay is intended to provide relief for retailers; however, it also appears to create a subtle complication that may raise costs for Massachusetts retailers over the next four years. Under federal and state law, employers must pay non-exempt employees one-and-one-half premium pay for all hours worked over 40 in a week. Premium pay for work on Sundays and holidays may be creditable toward overtime compensation, but only if it is at least one-and-a-half times that employee’s “regular rate” of pay for the given workweek.

The “grand bargain” legislation thus reduces premium pay below this one-and-one-half-times threshold, such that it is no longer excluded from the overtime pay calculation, and therefore, the Massachusetts premium pay can no longer be used to satisfy the federal and state overtime pay requirements. As such, if an employee works more than 40 hours in the workweek, and some of those hours fall on a Sunday or qualified holiday, Massachusetts retailers may be required to provide the employee with both (1) the Sunday or holiday premium, and (2) overtime (above and beyond the premium pay already provided). To further complicate matters, the premium pay received for time worked on the Sunday or holiday will need to be incorporated into the employee’s regular rate of pay, which will affect the calculation of the employee’s overtime rate of pay. Note also that employees’ entitlement to decline Sunday/holiday work (and not be retaliated against) stays in effect as part of the grand bargain. It remains to be seen whether this fact, when considered along with the elimination of premium pay, will impact the number of employees willing to work on Sundays/holidays.

While state lawmakers may choose to revise the statute as it pertains to this complication, overall, the elimination of premium pay should still come as a welcome relief to many Massachusetts retailers, especially those directly competing with stores across the border in New Hampshire. Given that the first reduction in pay is set to take effect in a matter of months, covered employers should notify their employees about the reduction, ensure overtime calculations comply with federal and state laws, and confirm payroll systems are updated to reflect these changes.

This post was written with assistance from Eric I. Emanuelson, Jr., a 2018 Summer Associate at Epstein Becker Green.

Our colleague at Epstein Becker Green has a post on the Wage and Hour Defense blog that will be of interest to our readers in the retail industry: “Federal Court Concludes That 7-Eleven Franchisees Are Not Employees of 7-Eleven.

Following is an excerpt:

In November 2017, four convenience store franchisees brought suit in federal court against 7-Eleven, Inc., alleging that they and all other franchisees were employees of 7-Eleven. The case was filed in the United States District Court for the Central District of California, entitled Haitayan, et al. v. 7-Eleven, Inc., case no. CV 17-7454-JFW (JPRx).

In alleging that they were 7-Eleven’s employees, the franchisees brought claims for violation of the federal Fair Labor Standards Act (“FLSA”) and the California Labor Code, alleging overtime and expense reimbursement violations. The trial court granted judgment in 7-Eleven’s favor, concluding that 7-Eleven was not the four franchisees’ employer under California law or federal law. …

Read the full post here.

Featured on Employment Law This Week:  The Ninth Circuit held that certain auto service advisors were not exempt because their position is not specifically listed in the FLSA auto dealership exemption.

The 9th relied on the principle that such exemptions should be interpreted narrowly. In a 5-4 decision last week, the Supreme Court found no “textual indication” in the FLSA for narrow construction. Applying a “fair interpretation” standard instead, the Court ruled that the exemption applies to service advisors because of the nature of the work.

Watch the segment below and read our recent post.

As 2017 comes to a close, recent headlines have underscored the importance of compliance and training. In this Take 5, we review major workforce management issues in 2017, and their impact, and offer critical actions that employers should consider to minimize exposure:

  1. Addressing Workplace Sexual Harassment in the Wake of #MeToo
  2. A Busy 2017 Sets the Stage for Further Wage-Hour Developments
  3. Your “Top Ten” Cybersecurity Vulnerabilities
  4. 2017: The Year of the Comprehensive Paid Leave Laws
  5. Efforts Continue to Strengthen Equal Pay Laws in 2017

Read the full Take 5 online or download the PDF.

The New York City Department of Consumer Affairs (“DCA”) has issued proposed rules  for the implementation of the Fair Workweek Law. The law establishes scheduling practices for fast food and retail workers in New York City and is set to go into effect on November 26, 2017.

With regard to retail employers, the proposed rules include:

  • Workplace notice positing requirements, § 14-02.   The DCA’s notice template is not yet available.
  • Workplace schedule posting requirements, § 14-04.   Retail employers must conspicuously post schedules three days before work begins.   The proposed rule expressly provides that employers may not post or otherwise disclose to other employees the work schedule of an employee who has been granted an accommodation based on the employee’s status as a survivor of domestic violence, stalking, or sexual assault, where disclosure would conflict with the accommodation.
  • Recordkeeping requirements to document compliance, § 14-08(a).   The proposed rule states these records must be maintained “in an electronically accessible format” and show:
    • Actual hours worked by each employee each week;
    • An employee’s written consent to any schedule changes, where required; and
    • Each written schedule provided to an employee.
  • Employee work schedule request requirements, § 14-08(b) and (c).   Within two weeks’ of an employee’s request, retail employers must provide employees with their work schedules for any previous week worked for the past three years. Within one week of an employee’s request, retail employers must provide the most current version of the complete work schedule for all employees who work at the same location, with the exception of those employees with accommodations based on the employee’s status as a survivor of domestic violence, stalking, or sexual assault.
  • Procedural guidance for employees who wish to proceed with a private right action against their employers for violations of the law.

A public hearing on the proposed rules is scheduled for Friday November 17, 2017. The deadline for written comments is 5:00 p.m. on November 17, 2017.