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This summer, Oregon became the first state to enact a “predictive scheduling” law. Senate Bill 828, which will take effect on July 1, 2018, requires large retail, food service, and hospitality industry employers to provide their employees with advance notice of their work schedules. Similar work scheduling bills have been introduced in several states in recent years, but Oregon’s “Fair Work Week Act” is the first to become law. A number of cities, however, have passed ordinances regulating worker schedules. In this Bloomberg Law Insights article, Littler Mendelson shareholder Jennifer Warberg and associate Matt Scherer discuss the Oregon law, what the law requires, and how employers can prepare for compliance.
Jennifer Warberg is a shareholder and Matt Scherer is an associate in the Portland, Ore., office of Littler Mendelson. Jennifer counsels clients on employment law and litigation involving wage and hour disputes, discrimination and retaliation and background checks. Matt counsels employers on leave and disability laws and workplace privacy and data use.
This summer, Oregon became the first state to enact a “predictive scheduling” law. Senate Bill 828, which will take effect on July 1, 2018, requires large retail, food service, and hospitality industry employers to provide their employees with advance notice of their work schedules.
Similar work scheduling bills have been introduced in several states in recent years, but Oregon’s “Fair Work Week Act” is the first to become law. A number of cities, however, have passed ordinances regulating worker schedules. San Francisco started the trend with its 2014 “Retail Workers’ Bill of Rights.” As its name implies, the San Francisco ordinance applies only to “retail” employers, although San Francisco defines the term “retail” fairly broadly. Seattle followed suit in 2016 by passing its own “Secure Scheduling” ordinance, which applies to retail and food services employers that have more than 500 employees worldwide. Oregon’s new law is modeled after Seattle’s ordinance and adds hospitality establishments to the list of covered employers. New York City has also passed a predictive scheduling ordinance that takes effect on November 26, 2017.
The common threads running through these laws are that they (1) require covered employers to provide employees with advance written notice of their work schedules, and (2) impose additional costs if covered employers attempt to change an employee’s schedule thereafter.
Oregon’s new law applies to employers in the retail, hospitality (including casinos), and food services industries with 500 or more employees worldwide. Covered employers must provide newly hired employees with a written “good-faith estimate” of the employee’s typical work schedule, including the expected median number of hours per month and whether employees can be expected to work on-call shifts. Alternatively, the employer and employee can agree that the employee will be on a “voluntary standby list” to work additional hours “to address unanticipated customer needs or unexpected employee absences.” Thereafter, the employer must provide the employee with notice of their work schedules at least 7 days before the period covered by the schedule begins. The 7-day notice period increases to 14 days starting July 1, 2020. If an employer attempts to add an additional shift that did not appear on the employee’s written work schedule, the employee may decline the new shift.
If a covered employer later decides to either change the specific hours of an existing shift or add hours to a shift, the employer must compensate the employee with an additional hour of pay in addition to the employee’s wages for the hours actually worked.
The new law also requires covered employers that subtract hours from employees’ shifts to pay the employee one-half of the employee’s regular hourly rate for each scheduled hour that the employee does not work due to the change.
A covered employer need not pay these additional amounts for changing an employee’s work schedule under certain circumstances, specifically if the employee exchanges shifts with a co-worker; if the employee is on the “voluntary standby list” mentioned above; if the employer changes the start or end time by 30 minutes or less; if an employee’s schedule is altered as a result of documented disciplinary action; or because of an unforeseen emergency such as a loss of power or a natural disaster.
Oregon’s new law, like the ordinances that came before it, does not apply to all employers, but instead to large employers in specific industries. For employers in those industries, however, the new law will require most employers to implement significant changes in their scheduling policies. Human resources and management employees at affected companies should access historical data for their Oregon locations to get a sense of their business and staffing needs. This will allow employers to create more accurate schedules once the new law goes into effect.Covered employers should also ensure that all human resources, payroll, and managerial staff are trained on the new legal requirements. Even inadvertent violations of the new law could result in stiff penalties for employers, with employers facing a civil suit or civil penalties of up to $1,000 for each violation of the statute. Because the new law takes effect in less than a year, covered employers with operations in Oregon should begin updating employee handbooks and training manuals and drafting the good-faith work estimates and other documents and notices that the law requires.
In the meantime, employers without operations in Oregon should also keep a close eye on legislative developments in other states and cities. A number of other states—including California, Massachusetts, and New York—have similar bills pending before the legislature. Notably, the Oregon bill passed the state senate with bipartisan support, including half of the chamber’s Republicans and all of its Democrats. Such bipartisan support suggests that Oregon’s new law could be a harbinger of things to come for employers with operations across the country.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
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