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New York City Fast Food, Retail Employers Face New Hurdles with Latest Wage and Hour Bills

Photo by P Steinberg

New York City Mayor Bill de Blasio has signed into law five bills imposing significant wage and hour restrictions on retail and food industry employers, which could change the way they schedule and communicate employee working hours. The laws will go into effect November 26, 2017.

DLA Piper issued its FranCast report today regarding the new obligations for both groups, retail and fast food. Authors of the legal bulletin are Joseph Alan Piesco, Norman M. Leon and Melissa R. Dean.

Starting with retail, employers will be subject to a number of additional requirements under the new laws:

  • No on-call shifts: Retail employers will be prohibited from scheduling "on-call" shifts, i.e., requiring a worker to remain available for a period of time without any guarantee of a compensable shift.
  • Advance notice of schedule changes: Retail employers must provide no less than 72 hours' notice before adding, canceling or changing shifts, other than in delineated and exceptional circumstances (like a state of emergency or natural disaster), although employees may voluntarily trade shifts and voluntarily request time off without penalty.
  • Advance notice of schedules: Written copies of work schedules must be provided to retail employees at least 72 hours before the start of the employee's first shift. If these are typically transmitted electronically, such also must be provided in electronic format.

In addition, the new laws will create certain recordkeeping and posting obligations on retail employers. Specifically:

  • Posting of schedules: Retail employers will be required to "conspicuously post" all work schedules at a given location at least 72 hours prior to a shift, and must circulate this electronically if such means are normally used to communicate work schedules.
  • Recordkeeping: Retail employers will be obligated to provide, on request, an employee's schedule for any week worked in the preceding three years.

The foregoing notwithstanding, retail employers may avoid these requirements if they are waived as part of a collective bargaining agreement, so long as the waiver is expressly stated.

The FranCast bulletin states that "retail employers" are defined as any entities with 20 or more employees – inclusive of full-time, part-time and temporary employees – primarily engaged in the sale of consumer goods at one or more stores in New York City.

New obligations for fast food employers: Like retail employers, fast food employers face a host of new hurdles with which they must comply. For instance:

  • Advance notice of work schedules: Fast food employers will be required to provide schedules for a 7-day workweek at least 14 days before the first scheduled shift. If not timely provided, employers will be subject to "schedule change premiums," ranging from $10 to $75, although a penalty may be avoided in limited circumstances, such as where employees voluntarily trade shifts or in certain extreme situations (e.g., a state of emergency). Employees may decline extra shifts without repercussion.
  • Shifts to existing employees: When a shift becomes available, fast food employers must offer that shift to existing employees at that location before hiring a new employee, or moving an employee from another site (although an employer is not required to offer a shift to an employee if it would result in overtime pay). Employers must post a notice indicating that a shift is available and keep this offer open for at least three days. If another employee accepts the additional shift, they will be entitled to a shift change premium (as described in the preceding bullet), if applicable.
  • Limitations on shift scheduling: Fast food employers cannot require fast food employees to work two consecutive shifts where there are less than 11 hours between the end of the first shift and the beginning of the second. Employees may consent to doing so, but this must be in writing and the employee must be paid $100 for each such consecutive shift.
  • Notice to new hires: New fast food employees must be provided with written notice of their expected weekly hours and schedules prior to their first shift.
  • Recordkeeping, notice and posting: Like retail employers, fast food employers will be required to keep schedules for three years and provide same to employees on request, and will have to publicly post current work schedules. In addition, the Office of Labor Standards will prepare a notice of rights that fast food employers will be required to post.

"Fast food employers" are defined as establishments (i) with the primary purpose of serving food or drink; (ii) where patrons order and pay before eating; (iii) that are part of a chain; and (iv) that are one of 30 or more establishments nationally (for franchisors and franchisees, both are aggregated nationally to meet this threshold).

Finally, in addition to the premium payments described above, covered employers may face civil penalties payable to New York City for violations of these laws, which are to be assessed on a per employee, per instance basis.

It should be noted that Governor Andrew M. Cuomo's Office has indicated that state regulations also may be forthcoming, and that these may, in whole or in part, preempt New York City's new laws.

That said, in light of these new laws and their breadth, DLA Piper attorney suggest that employers should be prepared to do the following:

  • Create or update guidance or training to educate managers and promote compliance with the new laws, and franchisors should consider educational opportunities for franchisees.
  • Draft policies for making, issuing and providing employees with the requisite advance notice of their schedules.
  • Establish measures to track required premium payments, and ensure service providers (such as payroll processors) have the ability to include premium payments in payroll.
  • Implement appropriate record-retention policies consistent with these new laws.
  • Identify procedures to account for schedule changes that occur after notice deadlines have passed (e.g., employees calling out sick and employee no-shows).
  • Prepare necessary consent notices to be issued to employees who voluntarily agree to shift changes or trade shifts with other employees.

DLA Piper FranCast: New York City Passes New Wage and Hour Restrictions on Fast Food and Retail Industry Employers—Action Steps

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About Janet Sparks

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Public Profile

Janet Sparks is the former publisher of the Continental Franchise Review, an industry newsletter that covered the franchise community for over 30 years. She has also been a columnist for a leading franchise magazine for the past 13 years. Today she is an independent journalist who engages in investigative reporting, tackling complex issues that impact the franchise industry.

Janet can be reached at jsparks@bluemaumau.org or at 303-799-7398.