Seattle, known for its employee-friendly ordinances, has passed a law regulating how large retailers, full-service restaurants, fast food restaurants, and coffee shops schedule and pay their hourly, non-exempt workers.  Seattle is the second city, after San Francisco, to provide workers with scheduling protections.  The new ordinance will add a new chapter 14.22 to the Seattle Municipal Code and will take effect July 1, 2017.  Emeryville, California recently became the third city to enact similar measures, and several other cities are considering following suit, including Washington D.C.; New York, New York; and Albuquerque, New Mexico.

Below we summarize some of the key components of the new law.

Covered Employers and Employees

The new law will cover all retail and food services establishments (e.g., fast food restaurants) with at least 500 employees worldwide, as well as full-service restaurants with at least 500 employees worldwide and at least 40 full-service locations worldwide.  When calculating the number of employees a particular food services establishment or full-service restaurant employs, employees of any other food services establishment or full service restaurant that are part of the same chain, integrated enterprise, or franchise will also be included in the employee count.

Covered employees are limited to those hourly, non-exempt employees who work at a fixed, point of sale location of a covered employer and who work at least half of their hours within Seattle’s city limits.

Employer Requirements

The primary requirements of the law on covered employers include:

• Providing good-faith estimates of the employee’s work schedule at the time of hire, and then updating such estimates annually and/or upon significant change in business model;

• Posting work schedules (including on-call shifts) at least 14 days in advance in a conspicuous and accessible location;

• Communicating any changes to the posted work schedule to the employee, who may decline any new work hours not included in the original schedule;

• Engaging in a timely, interactive process to consider employee scheduling requests (with limited ability to deny requests where limitation is due to a “major life event”);

• Providing at least ten hours of rest between shifts, or pay time-and-a-half for the shortfall of ten hours if an employee consents to or requests less rest;

• Offering available hours to existing employees before employing or contracting with new workers;

• Compensating employees with the equivalent of one hour of pay for (1) any additional hours of work beyond those scheduled, or (2) changes to the date, start, or end time of a work shift with no loss of hours, unless the employee voluntarily agreed to work the hours in response to a mass written communication from the employer that addresses hours where the employee scheduled to work those hours becomes unavailable, mutually agreed to swap work shifts with another employee, or the employee voluntarily agreed to extend his/her current shift in response to a present and unanticipated customer need;

• Compensating employees with pay equivalent to half the employee’s hourly wage for each hour cut from the posted schedule, with the exception of employee-initiated shift swaps or force majeure-type conditions such as loss of power or natural disaster;

• Paying half the hourly rate for all on-call hours scheduled if the employer does not require the employee to report for duty; and

• Maintaining scheduling records for three years.

Notwithstanding the above requirements, labor groups may negotiate alternative terms through collective bargaining.

The city council indicated it will study the effects of the new law for two years to evaluate whether any changes should be made.

Notice to Employees

The Office of Civil Rights will create and distribute a poster notifying employees of their rights under the new law.  Once available, employers must post this poster in English and any other primary language(s) of the employee(s) in a conspicuous and accessible place.  The Office of Civil Rights will create versions of the poster in English, Spanish, and “any other languages that are necessary for employers to comply with” the law.  For employees who work remotely or do not have a regular worksite, employers may provide a copy of the poster on an individual basis.

Penalties and Enforcement

Employers in violation of the new law may be subject to civil penalties of $500 per aggrieved worker for the first violation (or $1,000 in the case of a violation of the anti-retaliation provision of the law), with increasing penalties for subsequent violations.  Aggrieved parties may also bring a private action to claim unpaid compensation, liquidated damages, and attorneys’ fees and costs.  In the case of retaliation claims, the law creates a rebuttable presumption of retaliation if the employer or other person takes an adverse action against a person within 90 calendar days of his or her protected activity (e.g., inquiring about and informing others of rights under the new law, filing a complaint with the Office of Civil Rights for an alleged violation, etc.).

Although there is still some time before the law goes into effect, the impact of the new law will be significant for covered employers.  Indeed, the law is very detailed and presents many complexities for employers.  For that reason, covered retail and food-service employers should begin evaluating their scheduling practices now, determining how best to modify their operations to ensure compliance in as economical a fashion as possible.  In addition, companies should be alert to efforts to pass similar laws in other cities.