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Philadelphia Burdens New Fair Workweek Law to Impact 130,000 Workers & Employers

1/9/19

By:  John McAvoy
On December 7, 2018, the Philadelphia City Council passed the Fair Workweek Employment Standards Ordinance by an overwhelming margin of 14-3. Effective January 1, 2020, the objective of the Ordinance, which was introduced in June by Councilwoman Helen Gym (D), is to provide more predictable hours, advanced scheduling, among a slew of other protections for the roughly 130,000 workers in the food, service, and hospitality industries. The Ordinance’s seven co-sponsors hope the new restrictions will help break the cycle of poverty plaguing the nation’s fifth largest city.
To that laudable yet impracticable end, the Fair Workweek Ordinance imposes significant restrictions and standards on large service industry employers with respect to how they schedule, hire, and pay their workers. It also provides for a private right of action against employers that permits recovery of back pay, presumed damages, liquidated damages up to $2,000, attorneys’ fees and equitable relief.
After much debate with local businesses, the new Ordinance as enacted covers only those “retail establishments,” “hospitality establishments,” and “food services establishments” that employ 250 or more employees overall and have 30 or more locations worldwide, including chains and franchise locations.
New York, San Francisco and other large municipalities through the country have been implementing similar “fair workweek” laws since 2014. Philadelphia is the second largest city to adopt the practice. Like similar legislation enacted across the country, Philadelphia Fair Workweek Ordinance imposes four main requirements on employers:

1. Schedules in Advance. Employers must provide new hires with a written, good faith estimate of the employee’s work schedule. That schedule can change, but the initial estimate must include: the hours the employee can expect to work over a typical 90-day period; whether the employee can expect to work any on-call shifts; and “a subset of days and a subset of times or shifts that the employee can typically expect to work, or days of the week and times or shifts on which the employee will not be scheduled to work.” The employee can request a different work schedule, but the employer is free to grant or deny the request for any reason that is not unlawful. Employers will also have to consider employee work schedule requests, including requests not to be scheduled for certain shifts, days, times or locations as well as requests for changes in hours worked. Additionally, employers must provide employees with a written work schedule at least 10 days before the first day of a scheduled period (14-days effective January 1, 2021). Employees must receive notice of any proposed changes to the posted work schedule as promptly as possible and prior to the change taking effect, and they have the right to decline to work any hours not reflected on the posted work schedule.

 

2. Predictability Pay. The Ordinance requires employers to compensate employees for changes to the work schedule. This is commonly referred to as “predictability pay.” The amount of the mandated compensation is to be determined. There are, however, exceptions to this requirement. For example, if the employee initiates the schedule change, or there’s a mutual agreement between the employer and employee, an emergency, or for one of the other less common reasons outlined in the Ordinance, then employers are under no obligation to provide predictability pay.

 

3. Rest Between Shifts. An employee may decline, without penalty, any work hours that are scheduled or otherwise occur less than 9 hours after his or her prior shift ends. However, if the employee works that second shift, the company must pay that employee $40.

 

4. Offer Work to Existing Employees. Employees must offer extra shifts to current employees before hiring a new employee. However, if existing employees turn down the offer of extra shifts or if extra shifts would implicate overtime pay, then employers are free to hire new employees.

Employers who violate these requirements subject their business to potential liability. The Free Workweek Ordinance makes it unlawful to interfere with, restrain, or deny the exercise of protected rights under the ordinance. Retaliation is also prohibited, with a rebuttable presumption of retaliation for any adverse action within 90-days of an employee exercising protected rights, unless the adverse action was due to well-documented disciplinary reasons that constitute just cause. The Office of the Mayor of Philadelphia is charged with enforcing the new Ordinance, raising questions as to enforcement policy and litigation.
Prudent employers should start preparing their businesses now, Even though the new requirements and standards imposed by the Ordinance do not take effect for another year. Complicating matters further is the fact that the Ordinance, as a whole, is rather vague and ambiguous in terms of the restrictions it imposes and the ways in which those restrictions will be enforced. Although the legislature should eventually issue regulations to resolve some of the uncertainty, it is unclear when that will occur or if it will happen before the Ordinance takes effect next January. As a result, employers are left fending for themselves to make sweeping changes to their scheduling, hiring, and payment policies, practices, and procedures towards complying with the Ordinance.
The uncertainty and other difficulties employers will likely experience navigating the exacting requirements of Philadelphia’s Fair Workweek Ordinance is nothing new. Employment law is rapidly changing and evolving in Philadelphia at an unparalleled pace. The Fair Workweek Ordinance joins the ranks of similarly taxing legislation such as Philadelphia’s Salary History Ban Law and its Ban-the-Box Law, to name but two of the many legislative minefields presently impacting local employers.
Given this is a rapidly changing and developing area of the law, employers are encouraged to charge someone in their human resources and/or compliance departments with staying current on Philadelphia’s new employment ordinances and regulations. Noncompliance with an applicable regulation or ordinance, no matter how vague it may be written, can lead to civil liability and ignorance of the law is no defense. Therefore, it is important that employers stay apprised of the rapidly changing employment laws. The person charged with this responsibility should understand the impact a new or proposed law might have on the business and recognize what, if any, changes in the law require an amendment to company policies. It is also suggested that employers consult with experienced legal counsel to ensure that their policies and procedures are fully complaint with new legislation.
Need help understanding/navigating Philadelphia’s new legislation or want to learn more about what Philadelphia’s Fair Workweek Ordinance means for your local business? Let Freeman Mathis & Gary’s employment experts help. Feel free to call or email John McAvoy (215.789.4919 jmcavoy@fmglaw.com) for assistance with your company’s policies and procedures.