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Philadelphia City Council Passes Fair Workweek Ordinance

On December 6, 2018, the Philadelphia City Council passed the “Fair Workweek Employment Standards" Ordinance, which imposes scheduling and predictability pay requirements on certain employers in the hospitality, retail, and food service industries as of January 1, 2020. Mayor Kenney publicly has supported the Ordinance and pledged to sign it into law.

Philadelphia’s “Fair Workweek” Ordinance is part of a growing national trend to legislate scheduling in certain industries.  Seattle, San Francisco, and New York all have enacted their own version of a “Fair Workweek” Ordinance. According to Council Member Helen Gym, who sponsored the legislation, the Ordinance is an effort to combat Philadelphia’s high poverty rate by minimizing “abusive scheduling” and giving employees more stable hours and pay. 

Who Does It Cover?

The Ordinance only applies to hospitality, retail, or food services establishments that employ 250 or more employees and have at least thirty (30) locations worldwide. This includes, but is not limited to, “chain establishments or franchises associated with a franchisor or network of franchises.”

What Does It Require Employers to Do?

Although there are many nuances to the Ordinance, it provides five major protections to employees of covered employers:

(1) Advance Notice of Work Schedules

  • All employees are entitled to certain information regarding their schedule. Upon hiring, all employees must receive a “good faith estimate” of their work schedule, including the average number of work hours employees can expect to work each week over a typical 90-day period. New employees also are able to make schedule requests upon hiring, including specifying shifts they cannot work. 
  • Between January 1, 2020 and December 31, 2020, work schedules must be released at least ten (10) days in advance (this requirement increases to fourteen (14) days in 2021).
  • An employer must give employees notice of proposed changes to the schedule as soon as possible and before the changes take effect.

(2) Compensation for Changed Work Schedules

  • If changes are made to the posted work schedule more than twenty-four hours after the deadline to post work schedules, employees are entitled to “predictability pay.”
  • When employers add hours to scheduled shifts or change the date or time of scheduled shifts (with no loss of hours), they are entitled to one hour of pay at the regular rate of pay as predictability pay.
  • When employees lose hours from a scheduled shift, they are entitled to half of their hourly pay for each hour they have lost from their shift.
  • Predictability pay does not apply when employees request shift changes, when employees swap shifts with one another, or when employees volunteer to work additional hours in response to a “mass written communication from the employer about the availability of additional hours,” however, all voluntary shift changes will require written documentation.
  • Predictability pay also is not applicable in certain emergency situations, such as when severe weather disrupts transportation. 

(3) Right to Rest Between Shifts

  • Employees can decline any shift that begins less than nine hours after the end of a previous day’s shift or begins within nine hours following a shift that spanned two days. If employees work any such shift, they are entitled to an additional $40 for each shift they work. 

(4) Offer of Work to Existing Employees

  • Before an employer can look for new applicants to cover available work shifts they must provide written notice of the available work shifts for at least 72 hours to their current employees, unless a shorter period is necessary for the work to be completed,
  • If current employees accept the available shifts, then an employer cannot hire new employees to work those shifts. The obligation to offer work to existing employees does not apply if giving employees the available shifts would cause the employer to pay overtime. 

(5) Anti-Retaliation

  • Employers are prohibited from retaliating against employees for exercising rights protected by the Ordinance.

Employers also will be required to post notices and keep records demonstrating compliance with the Ordinance. The Ordinance allows employees to bring either administrative complaints or private actions against employers for violations of the Ordinance. Employees bringing a private action can collect unpaid compensation and liquidated damages of up to $2,000 and also may be entitled to an award of reasonable attorney’s fees and costs. 

For those with a unionized workforce, it is important to be aware that the provisions of the Ordinance can be waived by a bona fide collective bargaining agreement, but only if the waiver is explicitly stated in the agreement in “clear and unmistakable terms” and only so long as the agreement remains in effect.

Considerations for Employers

Hospitality, retail, and food service employers covered by the Ordinance should assess their current scheduling and onboarding practices and create an implementation plan for compliance in advance of the Ordinance’s effective date. Industry groups, including the International Franchise Association and the National Restaurant Association, instituted a lawsuit on December 3, 2018 challenging New York City's Fair Work Week Law on the basis that it is preempted by New York state law. It remains to be seen whether Philadelphia's scheduling ordinance will face similar legal challenges.