United States: Here Is How To React To The Rules Coming Retailers' Way

Last Updated: February 13 2015
Article by Stephen J. Roppolo

A number of state and local laws promising additional rights for retail employees are slated to go into effect in 2015, significantly changing the employment law landscape for retailers. If President Obama has his way, the federal government will not be far behind, with paid medical leave near the top of his wish list. Complying with the wide assortment of laws affecting the workplace will increase the compliance challenge facing employers in the retail sector, especially those with multistate operations.

Retail Worker Bill of Rights

San Francisco is once again at the forefront of aggressive, worker-friendly efforts by cities to curtail what it believes to be abuses by retailers, particularly with respect to scheduling and part-time employment. The San Francisco ordinance goes into effect in July. For "formula retail establishments," essentially chain retailers with at least 20 locations worldwide and at least 20 employees in San Francisco, this means some substantial changes.

Additional Hours for Existing Part-Timers

The ordinance requires that covered retailers first offer extra hours to existing part-time employees before hiring additional workers or turning to contractors or staffing agencies. The offers must be in writing and retained by the retail employer for three years. Once part-time employees are scheduled to work 35 hours per week, no additional written offers of extra work are required.

Notice of Schedule Change and Predictability Penalty Wages

In order to provide retail workers more stability and certainty regarding their work schedules, the San Francisco law requires that retail employers provide work schedules two weeks in advance, and retailers must give employees sufficient notice of schedule changes. If a retailer provides more than 24 hours' notice, but less than seven days' warning, the employer must pay the employee an extra hour of pay for each changed shift. If the employee receives word of a schedule change with less than 24 hours' notice, he is to receive "penalty pay" of two hours of wages if scheduled to work a shift of four hours or less, and four hours of penalty wages if the new shift is longer than four hours.

There are exceptions though. Retailers do not have to pay penalty wages when attempting to cover for another employee who was scheduled to work but fails to provide seven days' notice of an absence due to illness, vacation or other approved time off. Also, no penalty wages are due when the schedule change is due to another employee being sent home as a disciplinary measure. Finally, an employee who requests a last-minute schedule change or voluntarily trades shifts with another employee is not entitled to penalty wages.

Initial Estimate of Minimum Weekly Hours

Before a retail employee starts working, covered retail employers in San Francisco are required to make a good faith estimate, in writing, of the minimum number of shifts per month the employee can be expected to work and the days and hours of those shifts.

On-Call Pay

Retail workers who are on-call but are not actually called in to work must be paid for two hours if the on-call shift lasts four or fewer hours and four hours if the shift lasts longer than four hours.

Full-Time Employees = Part-Time Employees

Under the ordinance, covered San Francisco retailers may not distinguish between full-time and part-time employees with respect to starting hourly rate, access to time off and promotion eligibility.

Paid Sick Leave

It's not just San Francisco making headlines for new protections for employees. Even the federal government is contemplating new rules to provide workers paid time off for illness. Currently, most larger employers are covered by the Family and Medical Leave Act, which mandates up to 12 weeks of unpaid leave for serious health situations, pregnancy and other circumstances keeping employees away from work.

New rules contemplated by the Obama administration would require employers to provide up to seven days of paid sick leave to employees. The Healthy Families Act would provide that employees earn one hour of sick leave for every 30 hours they work, and the time off could be used for an employee's own illness or a family member's.

This is very similar to the new paid leave statute in Massachusetts, which goes into effect this year. Other features of the new law sure to give employers the shakes include:

  • No medical verification of absences are permitted until the employee has been absent for 24 consecutively scheduled work hours.
  • Employers with as few as 11 employees, including part-timers and temps, are covered.

Voters in Massachusetts approved its new paid leave law, suggesting that ballot initiatives may be the wave of the future for these employee-protection statutes.

The U.S. is actually one of only two nations without a law mandating paid leave for employees of private companies (the other is Papua New Guinea). While it may be a while before a paid leave law makes its way through a GOP-held Congress, it is likely to happen at some point. In the meantime, retailers can be sure that local and state governments will fill in the gap. Currently, in addition to Massachusetts, some form of paid sick leave is required in Connecticut, Washington D.C., California, New York City, Seattle, Eugene, Oregon, and various municipalities in New Jersey.

Some retailers already provide paid sick leave to employees, but many do not. Unless there is a requirement to offer vacation to employees in a particular jurisdiction, paid time off programs that apply regardless of the reason for absence can satisfy a paid sick leave requirement as long as a sufficient number of paid days/hours are made available.

Minimum Wage

Retailers and fast food operators are aware that local governments have been at the forefront of so-called living wage initiatives — city ordinances and state laws that increase the minimum wage in a community beyond the federally mandated $7.25 per hour. Last year, Seattle announced it was increasing its minimum wage to $15 per hour. Larger employers will get to $15 in three years, while smaller employers will have five years to implement a $15 minimum hourly wage.

Seattle is by no means the only local government heading in this direction. Indeed, in 2015, a majority of states will have minimum wages higher than the federal government's, meaning it is no longer possible for multistate retailers to derive any comfort from the knowledge that it pays each of its employees at least $7.25 per hour.

Again, the Republican-controlled Congress is likely to resist any increase to the minimum wage under the theory that minimum wage hikes cost jobs. And business groups are sure to lobby against raising the federal minimum wage. But recent studies of unemployment rates following increases to the minimum wage at the state and local level suggest that the fear may be overstated. In fact, one recent study showed that about half the time, an increase in the minimum wage has been followed by a decrease in the unemployment rate. Of course, any number of factors apart from minimum wage impact the unemployment rate, and without further study, no definitive conclusion can be reached.

University of Massachusetts-Amherst economists Robert Pollin and Jeannette Wicks-Lim recently released a paper in which they attempted to demonstrate how fast food operators could absorb a $15 per hour minimum wage with no job loss and no impact on profits. Quicker than you can say "voodoo economics," the researchers concluded. They claim that fast-food businesses could cover the increased payroll costs through reduced turnover, higher prices and sales growth.

Whether the good professors' claims are rosy optimism, partisan claptrap or sound economic theory, a doubling of the minimum wage, whether by a state or the federal government, would significantly change the workplace landscape for retailers.

This article originally appeared on Law360 on February 5, 2015.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Stephen J. Roppolo
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.