Private Business Counsel

On December 20, 2018, Mayor Jim Kenney signed into law the Fair Workweek Employment Standards Ordinance. Set to take effect on January 1, 2020, the law requires employers in the retail, hospitality, and food industries with 250 or more employees and 30 or more locations nationally to implement considerable changes in shift-scheduling—or face penalties and potential litigation. This blog provides a brief overview of the new law.

Starting in 2020, employers must provide new employees with a written, good-faith estimate of their work schedules, which must contain (i) the average number of work hours the employee can expect to work each week over a typical 90-day period, (ii) whether the employee can expect to work any on-call shifts, and (iii) a subset of days and times or shifts that the employee can generally expect to work. Although this estimate does not rise to the level of a contract, the failure to act in good faith in making this estimate would be a violation.

Additionally, employers must provide a written work schedule to current employees at least ten days before the schedule’s start. This timeframe will increase to 14 days in January 2021

Employers must also provide newly hired employees with a written work schedule that runs through the last date of the currently posted schedule. If the employer changes an employee’s schedule after the notice period, the affected employee will be owed “predictability pay.” Specifically, for each instance in which hours are added after the notice period, employers must pay employees the equivalent of one hour’s wage. When hours are subtracted after the notice period, employers must pay affected employees half of the wages they otherwise would have earned during those scheduled hours. The law provides limited exceptions to predictability pay, including employee-requested shift changes, shift trades between employees, and shift adjustments for valid disciplinary reasons.

The law also requires employers to offer new work shifts to existing employees before hiring externally, though employers are not required to offer shifts that would result in premium pay (e.g., overtime). Employers must provide employees with 72 hours’ notice of an available shift. If no employees express interest within this period, only then may employers staff a shift externally.

The law includes several enforcement measures. Notably, employees have a private right of action and can recover lost wages, reasonable attorney’s fees, and liquidated damages for any violation. The City of Philadelphia may also bring a civil action against an employer who is in violation. The law prohibits employers from taking an adverse action against an employee exercising his or her rights under the law. Unlike the retaliation in many other employment laws, the law creates a rebuttable presumption of illegal retaliation if the adverse action occurs within three months of the employee’s exercise of rights protected by the law.

Though the law will not be effective for another year, employers should begin instituting the necessary changes for compliance with its mandates. In particular, employers should begin planning to ensure they will be prepared to standardize employees’ shifts. Employers should also put in place mechanisms to predict accurately—and weeks in advance—the number of employees they will need. Although compliance with the law may present challenges, employers should take the next year to fine-tune their scheduling practices. Preemptive efforts will decrease the risk of penalties and litigation once the law takes effect.