United States: Emeryville Strikes Again: Another Employee-Friendly Ordinance to Take Effect

San Francisco's notoriously employee-friendly ordinances continue to set the standard for its neighboring cities.  Emeryville, which is across the bay from San Francisco and neighbors Oakland, recently passed a fair workweek ordinance that patterns itself off of San Francisco's Retail Workers Bill of Rights. The Emeryville ordinance applies to larger retail and fast food employers, and has strict scheduling requirements as set forth below. 

Effective Date and Applicability

Emeryville's Fair Workweek Employment Standards will become effective on July 1, 2017. These standards will apply to retail employers with at least 56 employees globally, or fast food employers with at least 56 employees globally and 20 or more employees within the city of Emeryville. To be covered under the ordinance, employees must perform at least two hours of work per calendar week within the city of Emeryville. 

Advance Notice of Work Schedule

New hires: Prior to or upon the start of employment, covered employers must provide a written, good faith, estimate of the employee's work schedule. The employee may then request that the employer modify the schedule, which the employer must consider. The employer retains sole discretion to accept or reject a modification and must provide the employee written notice of its decision prior to or upon the start of employment. 

During employment: Covered employers must provide employees two weeks' advance notice of their work schedules by either posting the written schedule in a conspicuous, readily accessible place at the workplace or by transmitting the work schedule by electronic means. For new employees, the employer must provide the employee's schedule prior to or upon hire. 

Scheduling changes: A covered employer must notify an employee of any changes to his or her posted schedule via in-person conversation, telephone call, email, text message, or other electronic communication. Employees have the right to decline any previously unscheduled hours, and the employer owes "predictability pay" when  the employer adds or subtracts hours or moves to another date or time, cancels, or adds a previously unscheduled shift. Critically, employers do not owe predictability pay for employee-generated changes.

"Predictability pay" is based on an employee's regular rate of pay, and is owed under the following circumstances: 

  • When an employer provides less than 14 days' notice but more than 24 hours' notice, the employer owes one hour of predictability pay for each changed shift.   
  • When an employer provides less than 24 hours' notice, the employer owes a different amount of predictability pay based on whether the previously scheduled hours are reduced/canceled or merely changed.  

    • If shift hours are canceled or reduced, the employer owes either four hours or the number of hours of the employee's scheduled shift, whichever is less. 
    • If the hours are merely changed, the employer owes one hour of predictability pay per shift. 

Exceptions: Predictability pay does not apply to any employee-initiated schedule changes, such as requested sick leave, time off, shift trades, or additional shifts. Predictability pay also does not apply when operations cannot begin or continue due to (1) threats to employers, employees, property, or when civil authorities recommend work not begin or continue; (2) public utility failures; (3) acts of nature, such as flood or fire; or (4) mutually agreed-upon work shift swaps or coverage among employees.  While the San Francisco ordinance (under San Francisco Police Code, Article 33G, Section 3300G.4(e)) does not require employers to pay predictability pay for employer-initiated changes that result in overtime hours worked, the Emeryville ordinance does not contain a similar exception.

Offer of Work to Existing Employees

Prior to hiring new direct or contracted employees, a covered employer shall first offer additional hours or work to existing, qualified, part-time employees. An employer retains the discretion to divide the additional hours of work among part-time employees so long as that method does not discriminate based on a protected category (including family care obligations) or Affordable Care Act requirements. 

An employer's offer of additional hours must be in writing or posted in a conspicuous location or internal website. Employees have 72 hours to accept additional work expected to last more than 2 weeks, and 24 hours to accept work expected to last 2 weeks or less. Employers must retain records of written offers of additional hours for at least three years. 

Scheduling Requirements—Anti-Clopening

"Clopening" refers to the practice of working a closing evening shift followed by an early morning opening shift. An employee has the right to decline hours that occur less than 11 hours after the end of their previous shift. If an employee works these hours, they must be compensated at one and a half times their regular rate of pay. An employee also has the right to request a modified work schedule and employers are prohibited from retaliating against employees for making this request. 

Notification and Enforcement

Employers must provide new employees a notice of this ordinance at their time of hire. Employers are also prohibited from retaliating against employees who make or participate in a complaint to the City of Emeryville. 

The City of Emeryville may investigate and informally resolve any complaints. The city may also issue fines for failure to comply with these requirements, as well as order reinstatement, civil penalties, unpaid wages plus interest, and reimbursement of the city's costs and attorneys' fees. 

Issues and Unanswered Questions

The Emeryville ordinance calculates predictability pay based on an employee's "regular rate of pay" as calculated under federal law.  An employee's regular rate of pay includes all non-discretionary payments, such as bonuses, commissions, or other payments. The San Francisco ordinance, however, under Rule 4.1 of the Final Rules Implementing the Formula Retail Employee Rights Ordinance, calculates regular rate of pay based on total earnings in base wages plus commissions or piece rates for the prior calendar year or, when the employee does not have a prior calendar year's amount of work history, the calculation is based on total earnings and hours worked from the date of hire.     Employers with operations in both cities should ensure they are performing the regular rate of pay calculation in compliance with the applicable law.  

There is no exception to the predictability pay requirement when schedule changes are due to disciplinary reasons. For example, if an employer were to send an employee home for misconduct, that employer would owe the employee predictability pay related to this schedule change. The City of Emeryville indicated that this exception was in previous versions of the ordinance, and we hope that it will clarify this issue in its forthcoming enforcement regulations. 

The City of Emeryville is in the process of scheduling stakeholder meeting as well as drafting enforcement regulations. We will provide a summary of the enforcement regulations as soon as they are released as well as a link to the City of Emeryville's model notice. 

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.

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