Secure scheduling legislation finally emerges

After months of stakeholder sessions, committee hearings, dueling survey results, and public PR battles, this morning Council members Lorena Gonzalez and Lisa Herbold are finally unveiling a draft “secure scheduling” ordinance. Their proposal is both comprehensive and ambitious; it addresses most, if not all, of the big issues lumped under the “secure scheduling” umbrella while compromising in a few places to make it more palatable for employers.

Herbold and Gonzalez have boiled it down to a simple problem statement: today, workers bear nearly all of the cost and impact of the fact that businesses don’t need the same number of workers on a consistent basis. Their ordinance is intended to shift some of that burden back onto the employers.

Let’s dive into the details of what they are proposing.

(Here is a policy summary and the presentation for this morning’s meeting)

Who is subject to this ordinance? This is a two-part question: which employers, and then which of their employees?

On the employer side, the intent (at least initially) is to aim for three specific types of businesses:

• Retail establishments with 500 employees worldwide: this would include big box stores such as Home Depot, Costco and Wal-Mart, most chain grocery stores such as QFC and Safeway, drug stores like CVS, Rite-Aid and Walgreens, and other chain specialty and department stores such as REI and Nordstrom. It would not include Amazon’s distribution centers since they aren’t storefronts, but it would include Amazon’s handful of brick-and-mortar retail presences.
• Quick or limited food service establishments: such as McDonalds, Starbucks, Ivar’s fast-food stands, and Dunkin Donuts.
• Full-service restaurants with more than 500 employees and 40 establishments worldwide: such as Denny’s, IHOP, and Red Robin. It would not apply to Ivar’s full-service restaurants, nor would it likely apply to Tom Douglas restaurants (ironic given their deep level of participation in the stakeholder sessions).

As one can clearly see, the ordinance is being designed to stay well clear of mom-and-pop stores and restaurants. Still, the city staff working on the ordinance estimate it will apply to about 4500 storefronts.

On the employee side, the ordinance uses the same criteria as the minimum wage ordinance: it applies to hourly, non-exempt employees. Also, they must work at least 50% of their hours within the city limits. At the request of worker advocates, there is provision in the ordinance for union-represented workers to negotiate an alternative structure for secure scheduling so long as it meets the ordinance’s public policy objectives, though there is no mechanism for the city to validate that such a labor contract meets the objectives and no local enforcement mechanism.

Employers must provide a good-faith estimate of the median number of hours that an employee will regularly be scheduled for.  It must be provided at the time an employee is hired, updated annually, and revised whenever there is a significant change. According to the staff, the intent is not about creating a legally binding commitment, but to force regular communication about expectations for regular hours.

Employees have the right to request input into their schedule. Employees can state preferences for a variety of scheduling parameters. Employers, in turn, are expected to give timely and good-faith consideration to the requests, and once again the intent is to encourage active and frequent communication between employers and workers. Priority is given for worker scheduling preferences related to caregiving, a second job, or education. Employers are required to grant the requests unless there is a genuine reason and/or it interferes with the operation of the business; if the employer denies the request, it must be done in writing.

Employees have a “right to rest” at least ten hours between working a closing shift followed by an opening shift the next day. While employees may not be forced to work “clopenings” with less than 10 hours’ rest, they may consent to do so, in which case they earn 1.5 times regular pay for the hours that make the shift separation less than 10 hours (e.g. if the break between shifts is 8 hours, then two hours will be at 1.5 times regular wages). this just holds for “clopenings,” not for split shifts.

Employers must give employees 14 calendar days’ advance notice of their schedule. This is as expected; one of the earliest outcomes of the stakeholder sessions was a consensus around two weeks as an industry best practice (though more than two weeks is even better for workers, obviously).

Employees receive “predictability pay” for changes to their schedule after it is posted. For the case of hours added to the employee’s schedule, the worker receives one additional hour of pay. This topic was the subject of long debate in committee hearings, because it is too easy to overcompensate and create a situation where employers are financially penalized for helping to solve employees’ scheduling issues.  In the proposed ordinance, there are exceptions for when employees arrange their own shift swaps (even if the manager reserves the right to approve the swap), and when the employer is facilitating a shift swap when it’s to fill a hole left by an employee’s inability to work a scheduled shift AND the employer uses mass communications to facilitate filling the shift rather than one-on-one.  Expect further debate and massaging of these rules, as they will continue to be controversial, and Council member Sawant views these kinds of exceptions as “loopholes” that employers will no doubt find a way to exploit beyond the original intent.

For the case of employees losing scheduled hours, those workers are entitled to be paid for half of the total time cut at their normal wage. That includes “phasing,” when a worker’s shift is ended early because business is slower than expected.

In a similar vein, workers required to be “on call” for a shift earn normal pay for half of the scheduled time when they are not called in. This recognizes that on-call workers must keep that time free from any other commitments. You can think of this as a natural extension of predictability pay, and is typically referred to as “reporting pay” when a worker is required to call or report in at the beginning of a shift and only then finds out whether she will be working some, all or none of the scheduled hours.

Existing employees have preferential access to additional shifts before an employer can hire additional workers.  This prioritizes opportunities for workers already on the payroll to reach fulltime employment over an employer’s ability to have more part-time staff.  This is also an area that has been heavily debated and negotiated to try to balance workers’ and employers’ needs. To balance it out, the hiring process becomes very prescriptive:

• An employer may concurrently post a shift both internally and externally, and must keep it posted (before making an offer) for three days.
• During those three days, internal employees may register their interest in the shift.
• If one or more qualified internal employee wants the shift, the employer must offer it to one of them.
• The employee has two days to accept an offer for the shift once extended.
• If after three days no qualified internal employees have indicated interest, the employer may offer it to a new external hire.

There are a set of exceptions here as well to make this more palatable for employers. They are only required to follow this process for whole shifts, not smaller chunks of hours. Also, once the employer has confirmed that there all qualified internal employees have declined interest in picking up the shift, an external worker can be hired immediately. And in the case of seasonal hiring, where the employer knows that there will be additional shifts for all existing employees and more beyond that, external hiring can be done in advance. Finally, participation in diversity and youth hiring in cooperation with a recognized partner program is exempted from the requirement to offer shifts to internal employees first.

Where this will get tricky is at the 30 hour threshold. Since Obamacare requires employers to grant benefits to any employee working at least 30 hours per week, businesses today have a strong incentive to have more part-time employee under that threshold rather than fewer fulltime employees. But under this rule, employers will be required to offer shifts to employees even it would push them above 30 hours per week. Don’t be surprised if the retail and restaurant business associations object on that grounds.

To make managing the “access to hours” a little easier for employers, the ordinance also requires that employers keep an “availability list” of internal employees who desire more hours. At the time of hire, all employees are added to the list, and after that the employer can ask whether they wish to remain on the list (employees may add or remove themselves from the list at any time without retaliation). The benefit for employees is clear bi-directional communication about a desire for more hours; for employers, it narrows the number of people who must be offered those hours.

The ordinance also calls out a specific bad practice for penalties: underscheduling by employers. An business is underscheduling its employees when the actual number of hours worked by them is consistently higher than the scheduled number of hours. Underscheduling will be a new labor practice violation subject to penalties.

Procedurally, employers will be required to keep all necessary documentation to show how scheduling, shift changes, and hiring are done. The enforcement provisions of the ordinance mirror the wage theft and minimum wage ordinances already in place: employers can be assessed treble damages for violations, on top of a $500 penalty per aggrieved party for the first violation and up to $1000 for a second violation. The Office of Labor Standards is responsible for enforcement, which can be done based upon complaints filed by employees or through their recently-granted authority to perform directed investigations. Fortunately, OLS is staffing up next year, and is expected to have nine investigators, one “intake” person, one paralegal, and one supervisor.

The ordinance will also ask for a two-year study to be done on the impact of the ordinance, in particular looking at the differences in implementation between retail businesses and full-service restaurants.

If passed into law, the new rules are likely to take effect next July — giving OLS time to do the necessary rulemaking and to roll out educational programs for both employers and employees.  The devil is still in the details, both in terms of fine-tuning the text in the ordinance, and the rulemaking to make it all work once enacted.

After the initial draft is unveiled this morning and discussed at Council member Herbold’s Civil Rights, Utilities, Economic Development and Arts Committee meeting, it will be officially introduced into the legislative process in next Monday’s Introduction and Referral Calendar. There will be a public hearing on August 16th to comment on the legislation. At the CRUEDA committee meeting on September 7th, amendments will be considered, and Council members Herbold and Gonzalez are hoping to vote the final version out of committee on September 13th — which would put it in front of the full Council for final adoption as early as September 19th (or the following week if the committee vote is not unanimous).

It has been a long, difficult path to get to this point, and there are still miles to go before the secure scheduling legislation is put to bed. Undoubtedly all parties will have complaints about it, and the next six weeks of legislative process will leave many of those complains unresolved. Nevertheless, this is an ambitious undertaking with a breathtaking scope,  and a major step forward in establishing protections for low-wage shift workers in Seattle.