City of LA Passes Fair Work Ordinance

It looks as though retail businesses employing 300 or more workers globally will soon be subject to a new set of requirements related to their employees within the City of Los Angeles.

Last week (on November 29), the L.A. City Council passed the Fair Work Week Ordinance, intended to “promote the health, safety, and welfare of retail workers in the City by providing them with a more predictable work schedule that ensures stability for themselves and their families and the opportunity to work more hours.” The Ordinance now goes to Mayor Eric Garcetti for his signature and if signed into law, as expected, qualifying retailers in L.A. will be faced with even more burdens around employee scheduling and pay. In anticipation of this apparent inevitability, Michelman & Robinson, LLP provides this overview of the new law.

Affected Employers

As referenced, the Ordinance applies to retail businesses or establishments that employ 300 or more employees worldwide. This includes, but is not limited to, motor vehicle and parts dealers, building material and garden equipment dealers, food and beverage retailers, grocery retailers, and electronics and appliance retailers. For purposes of this alert, all references to employer(s) are intended to be limited to qualifying dealers and retailers.

Affected Employees

The Ordinance applies to any individual employed by an employer. To the extent an employer contends that the Ordinance does not apply in any given circumstance, it has the burden of showing that a worker is not an employee under the law.

Requirements Under the Ordinance

Good Faith Estimate: Before hiring, employers must provide a good faith estimate of their would-be employees’ work schedules. Employers that deviate too far from this estimate in actual scheduling will need to provide a legitimate business reason to explain the deviation.

Right to Request Change: Employees have the right to request preferences for work hours and location. Employers may accept or deny these requests but must provide a reason for any denials in writing.

Work Schedule: Employers must provide employees with written notice of their work schedules at least 14 days in advance. Further, employers must provide written notice of any change that occurs after the two-week notice requirement. Employees have the right to decline any schedule changes. If an employee accepts a proposed change, the acceptance must be in writing.

Predictable Pay: If an employee agrees to a schedule change that does not result in loss of time or results in 15 or more minutes of additional work, the employer shall give an extra hour of pay at the employee’s regular rate. For example, if an employee is scheduled to work four hours on a Monday and agrees instead to work four hours on the following Tuesday, the employee will be eligible to be paid for an extra hour. Further, if the employee’s hours are reduced 15 or more minutes from what was indicated on a schedule, the employee shall receive half time for any time not worked. These pay requirements will not apply in certain circumstances including, but not limited to, (1) where an employee requests a change or (2) extra hours require overtime pay.

Additional Work Offerings: Before hiring new employees or using outside workers, employers must first offer existing work to current employees if one or more is qualified to do the job and the additional work would not result in overtime pay. Employers must make this offer of employment 72 hours before hiring someone new and must give current employees at least 48 hours to accept in writing.

Coverage: Employers cannot require employees to find coverage if they miss a shift for a reason covered by law.

Rest Between Shifts: Employers cannot schedule any employee for two consecutive shifts with less than 10 hours of rest in between them without written consent of the employee. If the employee does consent, he/she/they will be paid time and a half for the second shift.

Retention of Records: Employers must retain records for at least three years demonstrating compliance with the Ordinance as it pertains to current and past employees. Upon request, the Designated Administrative Agency (DAA)— in this case, the Office of Wage Standards (OWS) of the Bureau of Contract Administration—must be given access to these records, which include work schedules, copies of written offers to employees for additional work, and other correspondence with employees regarding scheduling.

Posting Notice: Employers must post notices about the Ordinance to be provided by the DAA in English, Spanish, Chinese (Cantonese and Mandarin), Hindi, Vietnamese, Tagalog, Korean, Japanese, Thai, Armenian, Russian and Farsi, and any other language spoken by at least five percent of employees at any given workplace.

Retaliation Prohibited: Employers may not retaliate against employees for exercising their rights under the Ordinance.

If approved, the Ordinance will take effect in April 2023. Assuming it becomes law, the Ordinance will not be subject to waiver and violations will result in civil penalties up to $500 per infraction. Not only that, employees will also have a private right of action in the event of an alleged infraction. Of course, we will continue to monitor the progression of the Ordinance and report back if and when the Mayor signs it into law. In the meantime (and given the potential for legal exposure), it is essential that employers prepare for the enactment of the Ordinance as soon as is practicable.