On April 1, 2023, the City of Los Angeles’ Fair Work Week Ordinance (“FWWO”) becomes effective and regulates retail businesses with employees working in the City. The FWWO 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 effective on April 1, 2023, there is a 180-day grace period for employers to comply, then on September 28, 2023, the City will fully enforce the ordinance and its fines. On the state level, there have been similar proposed bills for all employers (not just the retail industry), but of them have passed. This article reviews the five key issues retail employers must understand about the newly enacted City of Los Angeles ordinance:
1. Employers and employees covered under the ordinance
The ordinance applies to all employers who:
- Have 300 or more employees globally;
- Are identified as a retail business or establishment in the North American Industry Classification System (NAISCS) within the retail trade categories and subcategories 44 through 45; and
- Directly, indirectly or through an agent (including through a temporary or staffing agency) exercise control over the wages, hours, or working conditions of any employee.
The ordinance applies to any employee who performs at least two hours of work within the City of Los Angeles and who qualifies as an employee under Labor Code section 1197 and the wage orders.
2. Good faith estimate of schedule before hiring
Employers covered under the FWWO are required to provide new employees a “written good faith estimate of the Employee’s Work Schedule” before hiring the employee. Employers must notify new employees of their rights under the ordinance, or alternatively, provide the new employee with a copy of the poster required by Section 185.10 of the ordinance (as of March 24, 2023, the City has yet to publish this poster). Employers are also required to provide a written good faith estimate of the employee’s work schedule within 10 days of an employee’s request.
The good faith estimate is not a contractual offer, but the employer “must have a documented, legitimate business reason, unknown at the time the good faith Work Schedule estimate was provided to the Employee, to substantiate the deviation.”
A work schedule is defined as “the hours, days, and times, including On-Call Shifts, when the Employer requires an Employee to work or to be on-call to work.”
3. Predictable pay
Under the ordinance, 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 “predictability pay” as set forth in this chart:
|Employer-initiated Change||Predictability Pay|
|Increase in hours that exceeds 15 minutes||One (1) hour at the Employee’s regular rate of pay|
|Change to the date, time, or location (but no change in hours)||One (1) hour at the Employee’s regular rate of pay for each change|
|Reduction of hours by at least 15 minutes||Hours not worked at one-half the Employee’s regular rate of pay|
|On-call shift, when the employer does not call the employee to perform work||Hours not worked at one-half the Employee’s regular rate of pay|
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. Other requirements under the FWWO
In addition to predicable schedules, the FWWO requires many other items, such as:
- 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 must pay a premium of time and a half for each shift that is not separated by at least 10 hours.
- Employers must maintain records for at least three years of the work schedules, written offers and responses for additional work hours, written correspondence about work schedule changes, good faith estimates of work schedules, and “any other records that may be required to comply with the FWWO.
- Notice and posting of employee rights under the ordinance.
5. Penalties and ability to cure violations
The City of Los Angeles can recover penalties up to $500 per violation per employee. Employees and their representatives can also obtain certain relief under the ordinance under a private right of action that permits employees to file claims for violation of the ordinance. However, employers are provided a cure period of 15 days from receipt of a written notice to cure, to take action to correct violations prior to an employee or their representative filing a complaint with the City or a civil action.