On June 1, 2021, the Philadelphia Department of Labor’s Office of Worker Protections will begin enforcing the predictability pay requirement of the Fair Workweek Employment Standards Ordinance, which requires covered retail, hotel and food service businesses to compensate covered employees for most last-minute, employer-initiated schedule changes, such as reductions in hours and changes to work shifts.

The Philadelphia City Council passed the ordinance on December 6, 2018, and it went into effect on April 1, 2020. Although covered employers were required to immediately comply with most of the provisions (discussed below), due to the COVID-19 pandemic, the Office of Worker Protections paused its enforcement of the predictability pay requirement. Amidst an economy gaining steam and the gradual easing of capacity and other COVID-19-related operating restrictions on employers covered by the ordinance, the Office of Worker Protections has announced that it will begin enforcing the predictability pay requirement on June 1, 2021.

Predictability Pay Requirement

The ordinance requires employers to, among other things, post an employee’s work schedule at least 14 days in advance of the start of the schedule. When the employer initiates a change to the employee’s posted work schedule within 14 days of the start of the schedule, the employer must provide the following in predictability pay:

  • One hour of predictability pay at the employee’s regular rate of pay when the employer adds time to a work shift or changes the date, time or location of a work shift, with no loss of hours to the employee.
  • Predictability pay at one-half the employee’s regular rate of pay per hour for any scheduled hours the employee does not work when the employer cancels or subtracts hours from a regular or on-call shift.

The ordinance sets forth certain types of schedule changes that do not require predictability pay, including loss of hours due to termination of employment, mutually agreed-upon shift trades between employees, certain disruptions to employer operations such as fires, floods and other emergencies, and various other circumstances listed as exceptions to the predictability pay requirement.

Other Requirements

As noted above, the other provisions of the ordinance (not addressing predictability pay) went into effect on April 1, 2020. In addition to requiring advance notice of work schedules and predictability pay, the ordinance requires covered employers to:

  • Give new hires a written, good faith estimate of their potential work schedule. This estimate must be revised if there is a significant change in the employee’s work schedule due to changes in the employee’s availability or the employer’s business needs. This estimate must include: (1) the average number of hours the employee can expect to work each week in a 90-day period; (2) whether the employee can expect to work on-call shifts; and (3) information regarding the days and times or shifts that the employee can expect to work (or days and times or shifts the employee will not be scheduled to work).
  • Promptly revise posted work schedules to provide notice of proposed schedule changes;
  • Permit employees to decline to work hours or shifts not in the posted work schedule (or record their consent to work such hours or shifts by written communication);
  • Allow for a minimum of nine hours of rest between shifts;
  • Provide extra compensation to employees who voluntarily work two shifts within the nine-hour rest period;
  • Offer available work shifts to existing employees before hiring external applicants or subcontractors and distribute available work shifts in accordance with certain requirements;
  • Provide at least 72 hours’ notice of available shifts to existing employees (unless a shorter period is necessary for the work to be timely performed);
  • Post written notice of the policy for offering and distributing work shifts at hire and within 24 hours of changes to the policy;
  • Maintain certain records of employee schedules and any changes to those schedules;
  • Post notice of the law; and
  • Refrain from retaliating against employees exercising their rights under the ordinance.

Throughout 2020 and 2021, the Office of Worker Protections published guidance documents and other resources to assist employers in complying with the ordinance’s requirements, including regulations, FAQs and various templates for employer use.

The regulations provide several examples of employment scenarios involving changed work schedules to assist employers in understanding the types of circumstances that would trigger an obligation to provide predictability pay and how employers must calculate the amount of predictability pay owed for certain schedule changes. The regulations also provide specific guidance on how to calculate predictability pay for tipped employees, and the Office of Worker Protections’ FAQs provide additional guidance on predictability pay for on-call employees.

In addition, the regulations provide guidance on applying certain exceptions to the predictability pay requirements.

For instance, the ordinance expressly exempts employers from the predictability pay requirement when an employee volunteers to work additional hours in response to a mass written communication from the employer about the availability of additional hours resulting from an employee-initiated change (e.g., an employee calling out sick). The mass communication must (1) be used only for additional hours that are the result of another employee being unable to work scheduled hours and (2) make clear that accepting such hours is voluntary and the employee has the right to decline such hours. Notably, however, if an employer uses measures other than an employee volunteer to fill the shift after sending out a mass communication, the employer must provide predictability pay to the employee who fills the shift unless another exemption applies.

The regulations clarify that a mass written communication can be electronic or on paper, whichever is the standard in the particular workplace, as long as it is “genuinely and readily available” to all employees. The FAQs explain that the employer should send the written mass communication to all employees who are qualified to fill the shift. The FAQs provide the following example: “If a server is unable to work scheduled hours, the mass communication should go to all employees who are qualified to serve, including a busser who sometimes works as a server.”

The Office of Worker Protections published a “mass written communication” template for employers to use when attempting to fill a scheduled shift that an employee is unable to work, along with templates for maintaining records on employees’ consent to work schedule changes and providing employees with good faith estimates of their work schedules.

The mass written communication template expressly states that notice of available shifts pursuant to a written mass communication does not fulfill the ordinance’s requirements for offering available shifts to existing employees under section 9-4605. Thus, an employer must provide notice of an available shift to existing employees pursuant to its policy under section 9-4605 before offering the shift to an external candidate, regardless of whether the employer previously sent out a written mass communication pertaining to the shift.

Enforcement

Employees alleging a violation of the ordinance may file a complaint with the Office of Worker Protections or bring a private action in civil court within two years of the date the employee knew or should have known of the alleged violation. A prevailing employee is entitled to recover the full amount of any unpaid compensation, including predictability pay, lost wages and benefits, presumed damages as defined by the ordinance and regulations, any other damages suffered due to the employer’s violation, up to $2,000 in liquidated damages and reasonable attorneys’ fees and costs.

What This Means for Employers in Philadelphia

Covered employers should take steps immediately to comply with the workforce scheduling and predictability pay requirements of the ordinance. Key areas for compliance include developing or updating existing scheduling procedures to provide good faith estimates of employee work schedules, written notice of work schedules, work schedule changes and available work shifts, written policies for offering and distributing work shifts and the other written communications about work schedule issues required by the ordinance.

In addition to ensuring that managers generally understand employee rights and employer responsibilities under the ordinance, covered employers should train managers to recognize and potentially avoid the work schedule changes that trigger the ordinance’s predictability pay requirements and to record when the predictability pay requirements are triggered to ensure payment in accordance with those requirements.

For More Information

If you have any questions about this Alert, please contact Christopher D. Durham, Natalie F. (Hrubos) Bare, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group, or the attorney in the firm with whom you are regularly in contact.