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NYC fast-food chains to pay $4.5M in settlement of fair workweek violations



Dive Brief:

  • Fast-food chains Panda Express, Au Bon Pain and 7-Eleven’s Raise the Roost agreed to pay a combined $4.5 million to nearly 2,400 workers to settle charges they violated provisions of New York City’s Fair Workweek Law, which requires fast-food employers to provide workers with regular schedules, the city’s Department of Consumer and Work Protection announced Aug. 16.
  • All three companies were charged with failing to obtain workers’ consent when adding hours to their schedule; not paying them premiums for schedule changes; and not giving them the opportunity to work more regular hours before hiring new employees, DCWP said. The companies also failed to provide workers schedules 14 days in advance and did not receive consent before requiring employees to work “clopening” shifts — i.e., closing a location at night and returning first thing in the morning to open it.
  • The chains will also pay a combined $417,000 in civil penalties, with Panda Express due to pay more than $8,000 in back pay to one worker who was allegedly fired in retaliation for exercising his rights under the law, DCWP said.

Dive Insight:

Fair workweek laws, also known as predictive scheduling legislation, are meant to ensure that hourly workers in targeted industries, such as food service, hospitality and other retail environments, are given predictable work schedules so they can plan their lives beyond work.

“Maintaining a healthy work-life balance is already a challenge for so many New Yorkers, but it’s nearly impossible without a predictable work schedule,” DCWP Commissioner Vilda Vera Mayuga said in a statement.

Evanston, Illinois, is the latest jurisdiction to pass a fair workweek law. Effective Sept. 1, the ordinance applies to employees in the hospitality, restaurant, retail, food, warehouse and building service and manufacturing industries with more than 100 employees, according to a May post by law firm Littler Mendelson. Other such jurisdictions include Chicago, Philadelphia and Seattle, as well as Berkeley, Emeryville and Los Angeles in California. Oregon maintains the only statewide fair workweek law, although similar bills have been introduced this year in Maine and Michigan.

HR professionals whose organizations are affected by a fair workweek ordinance may want to watch out for a couple of issues, Matthew Radler, a partner in the labor and employment group at the Honigman, told HR Dive.

First, not only do the laws regulate how much advance notice an employee must receive before their schedule is changed, but they also regulate how much time can lapse between shifts, which is a response to the “clopening” issue, Radler said

For example, Los Angeles’ ordinance, which took effect in April, requires covered employers to provide shifts with at least 10 hours of rest between them, unless the employee gives written consent. Employees who work another shift within that 10-hour window are entitled to time-and-a-half pay for the entire shift.

Second, employers may need to understand how the organization controls the decision-making process around schedules, Radler said. That includes determining where discretion lay in the organization to make schedule changes and whether the employer permits supervisors to make snap judgments, he added; “That’s where compliance issues are going to turn into headaches.”

The employer may have a detailed policy that spells everything out, but if it allows for a lot of discretion at the lowest levels, such as with an assistant store manager, “this increases the risk that last-minute changes are being made that don’t comply with the law,” Radler added.

Third, employers can consider scheduling beyond the physical act of coming into work. Scheduling also may involve asking employees to be available for work, and many ordinances have regulations regarding on-call practices. New York City’s law prohibits on-call scheduling for retail employees, and Seattle’s on-call protections require an employee to be paid for half of the hours not worked if the employee is scheduled for an on-call shift and is not called in.

Although the ways in which fair workweek laws help employees have been well-publicized, they can also benefit employers, Radler noted. Advance scheduling, as part of a well-run scheduling program, can help prevent serious safety issues that may arise when an employee — particularly someone who handles dangerous equipment or performs other safety-sensitive tasks — is over-scheduled and works too many hours, too close together, he said.

Radler cautioned employers to take a weighted approach to using AI for scheduling. The detailed requirements of fair workweek laws can trigger critical compliance issues, as can the growing number of state and local laws regulating how AI can be used in employment. Some jurisdictions, such as New York City, also restrict the use of AI in hiring, Radler said.

Meanwhile, employers not yet affected by predictive scheduling laws should keep an eye on what’s going on in their jurisdiction; Radler said he is “fairly confident” that more states will adopt such laws.

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