On Monday, the City of Philadelphia published the final regulations for the Philadelphia Fair Workweek Ordinance. As previously announced, the Fair Workweek Ordinance will be effective on April 1, 2020. This means employers have approximately two months to familiarize themselves with the law and regulations and determine compliance.
The final regulations offer significant detail about and examples of the express requirements within the Ordinance and, in some instances, add to the existing law. The below is a summary of the Ordinance and regulations, but not a comprehensive review. Covered employers should take care to fully understand their obligations well in advance of the April 1 effective date.
Who is Covered?
Basically, covered employers are retail, hospitality and foodservice establishments that employ 250 or more employees and have 30 or more locations worldwide regales of where those employees perform work. The regulations provide guidance on who may be considered co-employers under the Ordinance. Co-employers are both responsible for compliance with the new law.
Employees are those entitled to overtime under state and federal law, working within Philadelphia for a Covered Employer. The regulations exclude some positions that would otherwise be covered like administrative and professional employees who have little to no customer interaction, such as human resources, payroll, and receptionists.
What is Required?
The requirements of the Ordinance can be generally categorized as follows: good faith estimates of employee schedules, advance notice of schedules, predictability pay to employees for schedule changes, offering work to existing employees and the right to rest.
Good Faith Estimates
Covered employers are required to provide employees with a “good faith estimate” (“GFE”) of the employee’s work schedule. The GFE must include: the average number of hours, not a range, an employee can expect to work each week, the days and times the employee is expected to work, and whether the employee will have any on-call shifts. The regulations offer options for compliance where employee schedules fluctuate. While the regulations give employers some leeway, this requirement will likely prove to be onerous.
The regulations imply that employers are required to provide current employees, not just new hires, with good faith estimates, despite language in the Ordinance that only requires good faith estimates “upon hire.” Employers have until July 1, 2020, to provide existing employees with good faith estimates. Providing GFEs has been construed as a continuing obligation. If there is a significant change in the employee’s schedule, defined in detail in the regulations, the employer must provide a new GFE.
Advance Notice of Schedules
The gravamen of the law is the requirement that employers provide employees with their schedules 10 days in advance of its start, moving to 14 days in advance in January 2021. If employers change employees’ schedules within this period, they are required to pay predictability pay in amounts corresponding to whether the employee’s schedule was increased or decreased. The Ordinance also provides ten (10) exceptions when employers do not have to pay predictability pay, despite employee schedule changes. Employers should be well-versed in when these exceptions do, and do not, apply.
Offering Work to Existing Employees
Covered employers are also required to offer new shifts or positions to existing employees before seeking external candidates. Employers must provide written notice of available work for at least 72 hours. Employers must also notify employees of its policy for offering and distributing shifts. The regulations describe specifically what must be included in the notice of new work. Only after notice has been provided and either no employee accepts the new work, all eligible employees confirm they are not interested or employees accept some but not all of the work, may employers look to external candidates.
Right to Rest
Employers must also allow employees the right to rest at least nine hours in between specific shifts. Employers cannot schedule an employee for 9 hours after the end of the previous day’s shift or for 9 hours after a shift that spanned two days. An employee may consent, in writing, to working these shifts, but the employer must compensate them $40 for working such shifts.
What Are the Penalties for Non-Compliance?
The regulations include the amount the City may collect civil penalties for violations of each section. For example, an employer’s failure to award available work hours to existing employees carries presumed damages of $1,000 per impacted employee. In addition, the Ordinance creates a private cause of action that allows employees to initiate a lawsuit for violations. The Ordinance also includes an anti-retaliation provision, which could be the basis of a separate claim. A successful plaintiff could be awarded unpaid wages, unpaid predictability pay, presumed, compensatory and liquidated damages, as well as attorneys’ fees.
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