On November 22, 2022, the City of Los Angeles passed the Los Angeles Fair Work Week Ordinance (“LAFWW”) proposing to regulate retail businesses with employees working in the City. The LAFWW states that there are over 140,000 workers in the retail sector in the “Los Angeles economy.” The ordinance sets out that “unpredictability of work schedules endemic in the retail industry creates many socioeconomic burdens on worker of large retail establishments.” The ordinance is waiting for the Mayor’s approval, and if approved, would take effect in April 2023. While there have been similar proposed bills on the state level, none of them have passed. Here are five key questions that employers must understand about the proposed ordinance:
1. Which employers does the LAFWW apply to?
The LAFWW applies to employers who:
- Has 300 or more employees globally
- Is identified as a ritual business or establishment in the North American Industry Classification System (NAICS) within the retail trade categories and subcategories 44 through 45; and
- Directly, indirectly, or through an agent, exercises control over the wages, hours, or working conditions of any employee.
2. Which employees are covered under the LAFWW?
The LAFWW applies to employees who work at least two hours of work within the City of Los Angeles during a work week.
3. What are the predictable work schedule requirements under the LAFWW?
Retail sector employers are required to provide employees with written notice of the work schedule at least 14 calendar days before the start of the work period. If the employer changes the schedule within the 14 calendar days, the employee has a right to decline any hours that were not included in the initial work schedule.
If the employee voluntarily consents to work the changed hours, the consent must be in writing. In addition, the employer must pay the employee one additional hour of pay for each change to a schedule date, time or location that does not result in a loss of time to the employee or provides more than 15 minutes of additional work time to the employee. If the change in the schedule reduces the employee’s work time by at least 15 minutes, then the employer must pay the employee one-half of the time the employee does not work as set forth in the initial schedule.
This “predictability pay” is not required under the following exceptions:
- the employee makes the schedule change request;
- if an employee accepts a schedule change initiated by the employer due to an absence of another employee or unanticipated customer need (but the employer must communicate that acceptance of the hours is voluntary and the employee has a right to decline);
- if the employee accepted the hours posted by the employer before hiring another employee to perform the work;
- if the employee’s hours are reduced as a result of the employee’s violation of law or the employer’s lawful policies and procedures;
- if the employer’s operations are compromised pursuant to law or force majeure; or
- if the extra hours worked require the payment of overtime premium.
4. Does the ordinance regulate other areas?
Yes. In addition to predicable schedules, the LAFWW requires many other items, such as:
- Good faith estimates provided to employees upon hire or upon 10 days of an employee’s request of the employee’s work schedule. If the employer deviates from this good faith estimate, the employer must have a documented, legitimate business reason that was unknown at the time the estimate was provided to the employee.
- Employees have the right to request preference for certain hours, times, or locations of work.
- Additional work hours must be offered to current employees before hiring new employees.
- Employers may not require employees to find coverage for their shift if unable to work for reasons protected by law
- Employers may not schedule an employee to work a shift that starts less than 10 hours from the employee’s last shift without the employee’s written consent. Employers still must pay a premium of time and a half for each shift that is not separated by at least 10 hours.
- Employers have record keeping obligations as well as notice and posting of employee rights under the ordinance.
5. What are the penalties for noncompliance?
The City of Los Angeles can recover penalties up to $500 per violation per employee. There is also a private right of action that permits employees to file claims for violation of the ordinance.