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 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.

The new episode of Employment Law This Week offers a year-end roundup of the biggest employment, workforce, and management issues in 2016:

  • Impact of the Defend Trade Secrets Act
  • States Called to Ban Non-Compete Agreements
  • Paid Sick Leave Laws Expand
  • Transgender Employment Law
  • Uncertainty Over the DOL’s Overtime Rule and Salary Thresholds
  • NLRB Addresses Joint Employment
  • NLRB Rules on Union Organizing

Watch the episode below and read EBG’s Take 5 newsletter, “Top Five Employment, Labor & Workforce Management Issues of 2016.”

My colleagues Michael S. Kun and Jeffrey H. Ruzal at Epstein Becker Green has a Wage and Hour Defense blog post that will be of interest to all retailers: “Proposed DOL Rule To Make More White Collar Employees Eligible For Overtime Pay.”Clock

Following is an excerpt:

More than a year after its efforts were first announced, the U.S. Department of Labor (“DOL”) has finally announced its proposed new rule pertaining to overtime. And that rule, if implemented, will result in a great many “white collar” employees previously treated as exempt becoming eligible for overtime pay for work performed beyond 40 hours in a workweek – or receiving salary increases in order that their exempt status will continue.

Read the full original post here.

By Nancy L. Gunzenhauser

On March 13, 2014 President Obama issued a memorandum instructing the Department of Labor (“DOL”) to review and revise overtime regulations under the Fair Labor Standards Act (“FLSA”).  Under the FLSA employees are eligible to receive overtime for all hours worked over 40 per week, unless they fall within certain specified exemptions.  The most common of exempt classifications in the retail industry are executive, administrative, and commission sales.

The executive exemption applies to managers and supervisors who direct the work of others and who earn a salary of at least $455 per week. The administrative exemption applies to employees who (i) earn a minimum weekly salary of $455, (ii) perform non-manual work directly related to the employer’s business operations and (iii) have as a primary duty the exercise of discretion and independent judgment with respect to matters of significance. The commissioned sales person exemption applies to employees who receive more than half of their earnings from commissions.

The upcoming changes to overtime regulations will be the first since 2004, when the threshold for the executive exemption was raised from $250 to $455 per week.

While the exact changes the Obama administration has in mind remain unclear, the impact on the retail industry, and indeed nearly all employers, may be be significant because the express purpose of the mandated review is to increase the number of workers eligible for overtime. One likely change will be a further increase to the minimum weekly salary threshold for executive and administrative exemptions. Inasmuch as many, if not most, exempt employees already have salaries of more than $455 per week, the change to the salary threshold alone might not be significant – depending on the new minimum. But, other changes cannot be ruled out.

The DOL has not indicated when it expects to issue the proposed amendments. A comment period will follow before any rule amendments are adopted, however.   Rulemaking may take a year or more. We will be monitoring the process and will alert you here to developments.

In addition, you may wish to download the EBG Wage & Hour app to your smart phone,  where changes to the regulations will also be posted.