BILL ANALYSIS                                                                                                                                                                                                    Ó





          SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
                             Senator Tony Mendoza, Chair
                                2015 - 2016  Regular 

          Bill No:               SB 878       Hearing Date:    April 13,  
          2016
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          |Author:    |Leyva                                                |
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          |Version:   |March 15, 2016                                       |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Alma Perez-Schwab                                    |
          |           |                                                     |
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                          Subject:  Work hours:  scheduling


          KEY ISSUES
          
          Should the Legislature require restaurants, grocery and retail  
          store establishments to provide a 21 day work schedule listing  
          all shifts for all employees at least seven days prior to the  
          first shift on that work schedule?

          Should the Legislature require employers to pay modification pay  
          for schedule shift changes with less than seven days' notice?

          Should the Labor Commissioner be authorized to order appropriate  
          relief to aggrieved employees that include reinstatement,  
          backpay, the payment of modification pay withheld, and the  
          payment of an additional sum up to $4,000 in the form of an  
          administrative penalty?

          Should aggrieved employees be able to bring a civil action  
          against an employer for schedule shift change violations and be  
          entitled to collect legal or equitable relief and reasonable  
          attorney's fees and costs?


          ANALYSIS








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           Existing law:  
           
              1)   Defines a full workday as 8 hours of labor, and 40 hours  
               as a workweek. Overtime wage rates must be paid for any  
               time worked beyond these hours at one and one-half times an  
               employee's regular rate of pay. Furthermore, work performed  
               beyond 12 hours in a day is to be compensated at twice the  
               regular rate of pay (Labor Code §510) 

             2)   Authorizes an employer to approve a written request of  
               an employee to "make up" work time that is lost as a result  
               of a personal obligation of the employee, and the hours of  
               that makeup work time performed in the same week may not be  
               counted towards computing the total number of hours worked,  
               therefore allowing the employee to work over 8 hours a day  
               without the obligation of overtime compensation, as  
               specified. (Labor Code §513)

             3)   Failure to pay an employee all premium pay required by  
               the Labor Code and Wage Orders, such as overtime premium,  
               reporting time pay, meal period/rest period premium, and  
               split shift premium pay, may entitle an employee to waiting  
               time penalties.
           Existing Industrial Welfare Commission Wage Orders regarding  
          "reporting" to work pay  :

             1)   Provides that when an employee reports to work at his or  
               her regularly scheduled time, but the employer finds it  
               necessary to send the employee home because there is no  
               work, the employee must be paid for at least half of the  
               hours scheduled to work, but in no case, less than 2 hours  
               nor more than 4 hours at the employee's regular rate of  
               pay.

             2)   If an employee reports for work a second time in any one  
               workday and is furnished less than 2 hours of work, the  
               employee shall be paid for 2 hours at the employee's  
               regular rate of pay. These reporting pay requirements do  
               not apply when: 

                  o         work is interrupted due to an Act of God or  
                    other cause not within the employer's control; 
                  o         operations of the employer's business cannot  
                    commence or continue due to threats to employees or  







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                    property or upon advice of civil authorities; or 
                  o         public utilities fail. 

           Existing regulations regarding "on call" and "stand by" time  :

             1)   Requires employers to pay the wages of hourly employees  
               for all time that the employee is under the control of the  
               employer, and includes all the time the employee is  
               suffered or permitted to work, with some exceptions for the  
               health care industry.  

             2)   On-call or standby time at the work site is considered  
               hours worked for which the employee must be compensated  
               even if the employee does nothing but wait for something to  
               happen. Whether on-call or standby time off the work site  
               is considered compensable must be determined by looking at  
               the restrictions placed on the employee. 
               (Division of Labor Standards Enforcement, Department of  
               Industrial Relations) 

           
          This Bill  would enact the Reliable Scheduling Act of 2016 to  
          provide predictable work schedules to covered employees, as  
          specified, in addition to other requirements. 

          Specifically, this bill would: 

             1)   Require employers of a restaurant, grocery or retail  
               store establishment to provide a work schedule listing all  
               shifts for all employees for at least 21 consecutive days  
               at least seven days prior to the first shift on that work  
               schedule. 


             2)   Define "grocery store establishment" as a physical store  
               within the state that sells primarily household foodstuffs  
               for offsite consumption, including, but not limited to, the  
               sale of fresh produce, meats, poultry, fish, deli products,  
               dairy products, canned foods, dry foods, beverages, and  
               baked or prepared foods. 


             3)   Define "restaurant" as any retail establishment serving  
               food or beverages for onsite consumption, including, but  
               not limited to, a restaurant, coffee shop, cafeteria, or  







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               café.


             4)   Define "retail store establishment" as a physical store  
               within the state with more than 50 percent of its revenue  
               generated from merchandise subject to the state's sales and  
               use tax, including, but not limited to, electronics,  
               appliances, clothing, furniture, sporting goods, health and  
               personal products, or a limited line of food products for  
               onsite consumption.


             5)   Define "shift" as designated hours or work, with a  
               designated beginning and ending time. 


             6)   Define "modification pay," to be calculated based on an  
               employee's hourly wages as specified, as compensation in  
               addition to an employee's regular pay awarded for changes  
               to an employee's work schedule with less than seven days'  
               notice.


             7)   Require modification pay to be calculated based on an  
               employee's hourly wage by dividing the employee's total  
               wages, not including overtime premium pay, by the  
               employee's total hours worked in the full pay periods of  
               the prior 90 days of work.


             8)   Require an employer to provide modification pay, per  
               shift, for each previously scheduled shift that the  
               employer cancels or moves to another date or time or for  
               any previously unscheduled shift that the employer requires  
               an employee to work as follows:


                  i.        If less than 7 days' notice but more than 24  
                    hours: modification pay equal to or greater than one  
                    hour at the employee's regular rate of pay.


                  ii.       If less than 24 hours' notice: modification  
                    pay equal to or greater than half of that shift's  
                    scheduled hours at the employee's regular rate of pay,  







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                    but in no event less than two hours nor more than four  
                    hours.


                  iii.      Modification pay required shall be in addition  
                    to an employee's regular pay for working that shift.


             9)   Specify that for each on-call shift for which an  
               employee is required to be available but is not called in  
               to work, the employer must pay modification pay equal to or  
               greater than half of that shift's scheduled hours at the  
               employee's regular rate of pay.


             10)  Authorize employers to create separate work schedules  
               for each department as long as all hours have a designated  
               beginning and ending time. 


             11)  Specify that these provisions do not prohibit an  
               employer from providing greater advance notice of an  
               employee's work schedule or changes in an employee's work  
               schedule.


             12)  Specify that these provisions shall not prohibit an  
               employee from requesting additional or fewer hours of work.


             13)  Specify that modification pay shall not apply to changes  
               in the scheduling of rest periods, recovery periods, or  
               meal periods.


             14)  Specify that modification pay does not apply for shifts  
               for which an employee is compensated with reporting time  
               pay as required by any wage order. 


             15)  Provide that the modification pay requirements do not  
               apply, and an employer shall not be deemed to have violated  
               these requirements, under any of the following: 









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                  i.        Operations cannot begin or continue due to  
                    threats to employees or property, or when civil  
                    authorities recommend that work not begin or continue.


                  ii.       Operations cannot begin or continue because  
                    public utilities fail to supply electricity, water, or  
                    gas or there is a failure in the public utilities or  
                    sewer system.


                  iii.      Operations cannot begin or continue due to an  
                    act of God or other cause not within the employer's  
                    control, including, but not limited to, an earthquake  
                    or a state of emergency declared by a local government  
                    or the Governor.


                  iv.       Another employee previously scheduled to work  
                    that shift is unable to work due to illness, vacation,  
                    or employer-provided paid or unpaid time off required  
                    by existing law or bona fide collective bargaining  
                    agreement when the employer did not receive at least  
                    seven days' notice of the other employee's absence.


                  v.        Another employee previously scheduled to work  
                    that shift has not reported to work on time, is fired,  
                    sent home as a disciplinary action, or told to stay at  
                    home as a disciplinary action.


                  vi.       Two employees have mutually agreed to trade  
                    shifts.


                  vii.      The employer requires the employee to work  
                    overtime.


             16)  Require employers to display a poster in a conspicuous  
               place in each workplace that contains information regarding  
               modification pay, as well as information regarding an  
               employee's right to file a complaint with the Labor  
               Commissioner for retaliation or discrimination claims. 







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             17)  Specify that failure by an employer to display the above  
               referenced poster shall subject the employer to a civil  
               penalty of not more than $100 for each offense. 


             18)  Require employers to keep records documenting the hours  
               worked and modification pay awarded to each employee for at  
               least three years, as well as allow employees and the Labor  
               Commissioner access to these records as required by current  
               law. 


             19)  Prohibit an employer from discharging, threatening to  
               discharge, demote, suspend, or in any manner discriminate  
               against an employee for filing a complaint or alleging a  
               violation of these provisions, cooperating in an  
               investigation or prosecution of an alleged violation, or  
               opposing any policy, practice or act that is prohibited by  
               law.


             20)  Provide that there shall be a rebuttable presumption of  
               unlawful retaliation if an employer discharges, threatens  
               to discharge, demotes, suspends, or in any manner  
               discriminates against an employee within 30 days of the  
               above referenced protected activity.


             21)  Require the Labor Commissioner to enforce these  
               provisions, including investigating an alleged violation  
               and ordering appropriate temporary relief to mitigate the  
               violation or to maintain the status quo, pending the  
               completion of a full investigation or hearing.


             22)  Authorize the Labor Commissioner, if a violation has  
               occurred, to order any appropriate relief to the employee,  
               including, but not limited to, the following:


                  i.        Reinstatement, backpay, the payment of  
                    modification pay unlawfully withheld, and the payment  
                    of an additional sum in the form of an administrative  







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                    penalty.


                  ii.       If modification pay was unlawfully withheld,  
                    the dollar amount of modification pay withheld  
                    multiplied by three or two hundred fifty dollars  
                    ($250), whichever amount is greater, but not to exceed  
                    an aggregate penalty of four thousand dollars  
                    ($4,000), shall be included in the administrative  
                    penalty.


                  iii.      If a violation of this section results in  
                    other harm to the employee or person, such as  
                    discharge from employment, the administrative penalty  
                    shall include a sum of fifty dollars ($50) for each  
                    day or portion thereof that the violation occurred or  
                    continued, not to exceed an aggregate penalty of four  
                    thousand dollars ($4,000).


                  iv.       If no prompt employer compliance, the Labor  
                    Commissioner can take any appropriate enforcement  
                    action including the filing of a civil action and in  
                    compensation to the state for the costs of  
                    investigating and remedying the violation, the  
                    commissioner may order the employer to pay the state  
                    $50 for each day a violation occurs or continues for  
                    each employee.


             23)  Encourage employee reporting of violations by requiring  
               the Labor Commissioner to keep confidential, to the maximum  
               extent permitted, the name and other identifying  
               information of the employee or person reporting the  
               violation, as specified.


             24)  Authorize the Labor Commissioner, the Attorney General,  
               an aggrieved employee or his/her representing entity to  
               bring a civil action against the employer and upon  
               prevailing, the employee is entitled to collect legal or  
               equitable relief as may be appropriate to remedy the  
               violation as well as the previously described remedies and  
               penalties, and reasonable attorney's fees and costs.







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             25)  Provide that in an administrative or civil action  
               brought, the Labor Commissioner or court, as the case may  
               be, shall award interest on all amounts due and unpaid at  
               the rate of interest specified in subdivision (b) of  
               Section 3289 of the Civil Code.


             26)  Provide that the remedies, penalties, and procedures  
               provided are cumulative.


             27)  Specify that the Labor Commissioner may promulgate all  
               regulations and rules of practice and procedures necessary  
               to carry out the provisions of this bill.


             28)  Specify that a violation of these provisions shall not  
               be a misdemeanor. 



          COMMENTS
          
          1.  Background on "Unstable and Unpredictable" Work Schedules:

            A 2014 report by the Center for Law and Social Policy, Retail  
            Action Project and Women Employed, titled "Tackling Unstable  
            and Unpredictable Work Schedules," states that unpredictable  
            and unstable work scheduled leave many low-wage workers in a  
            constant state of economic instability and personal turmoil.  
            Unfortunately, for a growing number of employers, these  
            scheduling practices are becoming business as usual. The  
            report describes the extent and scope of the problem as  
            follows:


               "With the rise of what is sometimes called "just-in-time  
               scheduling," managers are expected to carefully control the  
               relationship between consumer demand and expenditures on  
               wages. If customer traffic or sales seem to be lagging on a  
               given day, the expectation is that immediate changes to  
               workers' hours should ensue. Just-in-time scheduling  
               practices are part of larger trends in business practices -  







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               trends that are increasingly accepted as the norm in  
               hourly-wage, service sector industries. These practices  
               disproportionately affect low-income workers, who are  
               already vulnerable financially. Just-in-time scheduling  
               contributes to workers' income instability, making it  
               difficult to make ends meet; it may threaten their  
               eligibility for government income supports; and because  
               workers may not always be scheduled for enough hours to  
               qualify, it may limit their eligibility to claim  
               firm-provided benefits like health insurance and sick days.  
               In their rush to cut costs, many corporations are adopting  
               business practices that seriously compromise workers'  
               well-being.


               While workers feel pressure on their pocketbooks and strain  
               on their home lives, front-line managers are being  
               pressured too. In the retail industry, managers are often  
               evaluated on whether they meet targets for payroll as a  
               percentage of sales. With minimal control over sales,  
               managers move quickly to decrease staffing levels when  
               sales go down. In a study of low-level, non-production jobs  
               at major US corporations in the retail, transportation,  
               hospitality, and financial services industries, researchers  
               found that managers at all firms experienced pressure and  
               responded by "scheduling to demand." Across industries,  
               employers have adopted labor strategies that "shift risk  
               from the corporation onto workers, bringing with it  
               instability in hours and income." For example, one study  
               found that restaurant workers could be scheduled with a  
               start time but no end time. Workers were instead scheduled  
               as "12 BD." This means that a worker would arrive at work  
               at noon and then leave when "business declined" or BD. That  
               could be anytime and at the discretion of the management.


               Employers now also have technological tools to help  
               manipulate workers' schedules in response to changes in  
               demand. Recent news reports indicate an increasingly  
               widespread use of software created by such companies as  
               Kronos Inc. and Dayforce to "optimize schedules" by  
               breaking them down into small increments of time and by  
               tracking factors such as sales and (as in the case of Jamba  
               Juice) weather patterns. In other words, the software  
               creates schedules that cut costs, but are highly  







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               unpredictable for workers."

          2.  Statistics on Unpredictable Work Schedules:

            Several reports as well as worker advocacy groups have drawn  
            attention to the impacts of unpredictable scheduling practices  
            on workers and their families in the last several years.  A  
            2014 University of Chicago report, titled "Precarious Work  
            Schedules among Early-Career Employees in the US: A National  
            Snapshot," presented an overview of work schedules among a  
            representative sample of early-career adults (ages 26-32) in  
            the United States and found that short notice (one week or  
            less in advance of the workweek) was widespread.  

            Specifically, the report revealed the following based on data  
            provided by the National Opinion Research Center under the  
            direction of the U.S. Bureau of Labor Statistics:
               i.     41% of early career workers in hourly jobs (47% of  
                 part-time workers) report they know "when they will need  
                 to work" one week or less in advance of the workweek.  
               ii.    3/4 of early-career adults in hourly jobs report at  
                 least some fluctuations in the number of hours they  
                 worked in the prior month and on average, hours fluctuate  
                 by more than a full, conventional 8-hour day of work and  
                 pay. 
               iii.   90% of food and service workers report that their  
                 hours fluctuated in the last month by, on average, 68%  
                 when compared to their usual hours. 
               iv.    Half of the retail workers reported that they know  
                 their work schedule one week or less in advance, and half  
                 of janitors and housekeepers report that their employers  
                 completely control the timing of their work. 
               v.     Respondents with a child 12 or younger (44% of the  
                 sample), 69 percent of mothers and 80 percent of fathers  
                 report that their hours fluctuated in the prior month by  
                 an average of approximately 40 percent when compared to  
                 their usual hours. 
               vi.    For many, fluctuations in work hours are driven by  
                 the requirements of their employer rather than personal  
                 preferences: half of fathers and 45 percent of mothers  
                 report that their employer decides their schedule without  
                 their input. 

            According to the report, the findings suggest that early  
            career workers across the labor market, but especially workers  







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            paid by the hour, of color, and in part-time jobs, are at high  
                                     risk of all three of these dimensions of precarious work  
            schedules: short advance notice, large fluctuations in work  
            hours, and little or no input into the timing of work. The  
            report states that legislation that establishes a broad set of  
            standards on scheduling practices is needed to ensure the  
            well-being of all workers and families and a level playing  
            field for employers. 

          3.  Need for this bill?

            As depicted in the findings above, workers with unstable work  
            schedules face many challenges including adverse health  
            effects, difficulty finding and keeping childcare,  
            transportation obstacles, trouble going back to school to  
            advance their education, and experience overall stress and  
            strain on family life. According to the author, unpredictable  
            scheduling practices and last-minute work schedule changes  
            cause workers who are already struggling with low wages to  
            live in a constant state of insecurity about when they will  
            work or how much they will be paid on any given day. To  
            address these problems and attempt to provide workers with a  
            more stable work life, this bill would enact the Reliable  
            Scheduling Act of 2016 to require employers of a restaurant,  
            grocery or retail store establishment to provide a work  
            schedule listing all shifts for all employees for at least 21  
            consecutive days at least seven days prior to the first shift  
            on that work schedule. 

          4.  San Francisco Ordinance  :
            
            In December 2014, the San Francisco Board of Supervisors  
            passed the "Retail Workers Bill of Rights," which included two  
            ordinances regulating hours, retention, and scheduling, and  
            treatment of part-time employees at some Formula Retail  
            Establishments. On January 29, 2016, the San Francisco Office  
            of Labor Standards Enforcement issued final rules for the  
            ordinances which took effect March 1, 2016. 

            The ordinances, which apply to formula retail establishments  
            with at least 40 locations worldwide and 20 or more employees  
            in San Francisco as well as their janitorial and security  
            contractors, included a component regarding predictive  
            scheduling that required, among other things, the following: 








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                i.      Initial Estimate of Work Schedule - employers  
                  provide new employees with written estimate of the  
                  employee's expected minimum number of scheduled shifts  
                  per month and the days and hours of those shifts. 
                ii.     Two Week's Notice of Work Schedules - Schedules  
                  may be posted in the workplace or provided  
                  electronically. 
                iii.    Predictability Pay for Schedule Changes - Changes  
                  to an employee's schedule with less than seven days'  
                  notice requires 1 to 4 hours of pay at the employee's  
                  regular hourly rate (depending on the amount of notice  
                  and the length of the shift).
                iv.     Pay for on Call Shifts - For "on-call" employees  
                  not called in to work, the employer must pay 2 to 4  
                  hours of pay at the employee's regular hourly rate.
                v.      Exceptions - Employers do not have to provide  
                  "predictability pay" or payment for on-call shifts for  
                  specified circumstances outside of the employer's  
                  control, including the exceptions delineated under the  
                  provisions of this bill.    

          5.  AB 357(Chiu) - Fair Scheduling Act of 2015  :
            
            Last year, Assembly member Chiu introduced AB 327 which would  
            have enacted the Fair Scheduling Act of 2015 to require a  
            "food and general retail establishment" to provide its  
            employees with at least two weeks' notice of their work  
            schedules. The bill applied to food and retail establishments  
            with 500 or more employees in the state and that has 10 or  
            more retail stores located in the United States. Among other  
            things, the bill included a requirement that employers pay  
            employees additional pay, as specified, for scheduled shift  
            changes and for each on-call shift for which the employee is  
            required to be available but is not called in to work. The  
            bill included a provision allowing an employee to be absent  
            from work without pay for up to 8 hours twice per year to  
            attend required health appointments. AB327 was never taken up  
            for an Assembly Floor vote and died on the inactive file.  

          6.  Proponent Arguments  :
            
            According to proponents, in recent years, countless employers  
            in retail and food service have abandoned the traditional  
            weekly work schedule and forced workers to accept a policy  
            known as "just in time" scheduling.  This practice, often  







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            driven by software programs that closely monitor sales and  
            customer traffic, schedules workers on a day by day basis  
            without regular hours or advance notice of changes, the day  
            suddenly ends when management or the computer program say so.  
            They argue that if the worker wants to stay employed, he or  
            she must always be ready to drop what they are doing and go to  
            work at a moment's notice. Further, they argue that even  
            workers that received a written schedule often find that the  
            schedule changes frequently with little, if any, warning.  
            Proponents argue that for these workers and their families,  
            this practice goes beyond mere inconvenience.

            According to the author, without reliable schedules, working  
            families are more likely to use public benefit programs, more  
            vulnerable to experience hardships and less likely to climb  
            into the middle class. Erratic schedules have severe effects  
            on workers' lives, and on their families' wellbeing.  
            Proponents note that child care or elder care cannot be  
            planned without knowing when or for how long work will last,  
            and ongoing education or a second job is out of the question  
            for those who spend virtually all waking hours on call.  
            Additionally, proponents argue that jobs that send workers  
            home at any second also create devastating financial  
            instability, especially considering that such jobs are  
            typically at or just above minimum wage. 

            Proponents argue that this bill would create certainty for  
            workers and employers alike by giving employees adequate  
            advance notice of their schedule so they may better plan their  
            lives. This bill will guarantee workers one week's notice of  
            their schedules and also give workers additional pay when  
            planned shifts are changed. Proponents argue that not only  
            would this protect employer flexibility, it would also send a  
            message to workers that their lives outside of work are  
            valued. With one week's notice, workers can plan child care,  
            elder care, health care appointments, adult education, or  
            countless other activities.  They state that a life outside of  
            work should not be a luxury that only management can afford. 

            Additionally, proponents argue that this important proposal  
            would make California one of the first states in the nation to  
            recognize the importance of reliable schedules for workers  
            while also meeting the day-to-day needs of businesses.  
            Further, they state that this bill does not in any way  
            prohibit an employer from making last minute schedule changes;  







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            it simply requires that the workers be paid slightly more when  
            such changes occur.  

          7.  Opponent Arguments  :

            According to a coalition of employer opposition, this bill  
            will eliminate flexibility in the workplace for both employers  
            and employees, deny employees the opportunity to work  
            additional hours if desired, limit employers' ability to  
            accommodate customer demands, and subject employers to  
            unnecessary layers of penalties, investigative actions, and  
            costly litigation. Among other things, opponents state the  
            following:

            SB 878 Is Significantly Broader than the San Francisco  
            Ordinance, Which Has Created Limited Flexibility for  
            Businesses and Employees: They argue that since going into  
            effect, numerous employers in San Francisco have refused to  
            make changes to a schedule once posted given the threat of  
            penalties, which has harmed employees' request for changes.   
            Moreover, employers who have last minute fluctuations in  
            customer demand due to unforeseen events simply work  
            short-staffed, rather than face financial penalties. These  
            consequences, they argue, do not benefit the employee,  
            employer or consumer. Additionally, they argue that this bill  
            is significantly broader as it is applicable to any  
            restaurant, grocery store or retail establishment, regardless  
            of the number of employees and basically requires a 28-day  
            notice of an employee's schedule which will destroy  
            flexibility for employers. 
            
            SB 878's Threat of Modification Pay and Numerous Avenues of  
            Enforcement, Penalties and Investigation for Schedule Changes  
            Will Absolutely Eliminate Flexibility in the Workplace and the  
            Ability for Employees to Earn More Wages: Opponents argue that  
            employers will be wary to make any changes to an employee's  
            schedule in order to avoid the potential for modification pay.  
            They argue that this bill threatens an employer for failure to  
            properly provide "modification pay" with the following:  (1) a  
            $4,000 penalty for failing to accurately provide "modification  
            pay"; (2) another $4,000 penalty for any harm that results to  
            the employee or "another person" from a violation of this law;  
            (3) a $50 per day penalty for failure to "promptly comply"  
            with the Labor Commissioner's order; (4) investigation by the  
            Labor Commissioner; (5) prosecution by the Attorney General;  







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            (6) a representative action by an employee with penalties of  
            $100 per employee per pay period and attorney's fees; and (6)  
            an unfair competition claim. They argue that with all these  
            potential consequences at risk, an employer will never change  
            an employee schedule, even if it appears the change falls  
            within one of the listed exceptions or the employee actually  
            volunteers and requests the change/additional hours of work.  
            The risk to the employer for a mistake is simply too great.

            SB 878 Is Applicable to Both Large and Small Employers, as  
            Well as Those Who Do Not Primarily Engage in Selling  
            Merchandise or Food: They argue that even large employers who  
            have more sophisticated scheduling software and technology  
            face challenges with regard to advance scheduling and  
            accommodating schedule changes.  A small employer with limited  
            resources will not be able to manage the 21-day "work  
            schedule" that must be given to employees at least 7 days in  
            advance of their first shift, or the nuances with regard to  
            when "modification pay" applies. Moreover, they argue that it  
            is unclear which employees are covered with regard to an  
            employer who may have hybrid operations.  For example, would  
            an employer in the technology industry that has an on-site  
            cafeteria be required to comply with this scheduling  
            requirement for the entire workforce?  Will the hotel that has  
            a gift shop, restaurant or bar located on its premises be  
            forced to comply for all employees?  They argue that given the  
            broad definition, as well as the statutory scheme of  
            penalties, litigation and enforcement, employers who are not  
            primarily engaged in selling merchandise or food will be  
            forced into the overwhelming provisions of this mandate.

            SB 878 Mandates a One-Size-Fits-All Advance Schedule  
            Requirement: First, they argue that this bill fails to take  
            into consideration the varying business models, while some may  
            have predictability in their business cycle, others simply  
            cannot. Second, this mandate will force an employee to predict  
            their own schedule more than 30 days in advance in order to  
            provide their availability to an employer to create a 28-day  
            notice schedule. They note that as employers have experienced  
            in SF with a 14-day notice schedule, many employees simply  
            cannot commit to shifts so far in advance, and end up  
            frustrated with the schedule they receive that the employer  
            cannot or will not change due to the threat of financial  
            penalties.   








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            SB 878 Limits an Employer's Ability to Respond to Customer  
            Needs: The retail and food environment is entirely dependent  
            upon customer demand.  They argue that while larger employers  
            may be able to forecast labor needs based upon prior year  
            sales, such software cannot predict every event. Weather,  
            community events and employee changes all impact the ability  
            to accurately schedule employees. They argue that this bill  
            threatens employers with "modification pay" for responding to  
            unpredictable events. 
            
            SB 878 Forces an Employer to Provide "Modification Pay" to an  
            On-Call Employee Who Is Already Being Compensated: "On-call  
            time" and "stand-by time" during which an employee may be  
            called into work and therefore restricting or limiting what he  
            or she can do is already compensable under law.  Just last  
            year, in Mendiola v. CPS Security Solutions, Inc., 60 Cal.4th  
            833 (2015), the Supreme Court stated that, regardless of  
            whether an employee could perform personal activities while  
            on-call, the employer's control over that time to call-in the  
            employee to work required the employer to provide the employee  
            with compensation. They argue that with this bill, an employer  
            will be forced to not only compensate the employee for the  
            on-call time, even when the employee did not get called in,  
            but also pay "modification pay" of up to half of the  
            employee's shift.  
            
            SB 878 Creates Numerous, Costly Avenues of Litigation: They  
            argue that even if the employer pays the "modification pay"  
            for changes to the employees' schedule, the employer could  
            still be subject to significant penalties and attorney's fees  
            under PAGA (Private Attorney General Act) litigation. In  
            addition, they argue that an employee could also threaten an  
            unfair competition claim, as well as a common law wrongful  
            termination claim. Additionally, an employer would also face  
            investigations and enforcement actions by the Labor  
            Commissioner, as well as the Attorney General, for failure to  
            properly provide "modification pay," thereby exposing the  
            employer to numerous threats of litigation and exposure for  
            simply changing a schedule due to the employee's request. 

            SB 878 Eliminates a Key Benefit to Working in the Retail and  
            Food Industries: Opponents argue that flexibility is one of  
            the main reasons employees choose to work in the retail and  
            food industries. Currently, employees can request schedule  
            changes, trade shifts with other employees, work part-time,  







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            leave work early to attend to personal needs, etc.  This  
            flexibility is favorable for students, employees who are  
            caretakers, and those who only want part-time work. This  
            flexibility will essentially be eliminated by the mandates in  
            this bill. 

            Lastly, the California Restaurant Association argues that the  
            mandates in this bill will make it particularly challenging  
            given that many factors, beyond the control of restaurant  
            operators, can have significant impacts on operations on any  
            given day.  For example, weather, large party reservation  
            either added or canceled, both require substantial adjustments  
            to staffing. 


          SUPPORT
          
          California Labor Federation, AFL-CIO (Sponsor)
          California Conference Board of the Amalgamated Transit Union
          California Conference of Machinists
          California Employment Lawyers Association 
          California Professional Firefighters
          California Teamsters Public Affairs Council
          Engineer & Scientist of California, Local 20, IFPTE Local 20,  
          AFL-CIO
          International Longshore and Warehouse Union
          Professional & Technical Engineers, IFPTE Local 21, AFL-CIO
          UNITE HERE, AFL-CIO
          Utilities Workers Union of America, Local 132, AFL-CIO
          Voices for Progress

          
          OPPOSITION
          
          Agricultural Council of California
          California Ambulance Association
          California Asian Pacific Chamber of Commerce
          California Assisted Living Association
          California Association of Nurseries and Garden Centers
          California Chamber of Commerce
          California Employment Law Council
          California Gaming Association
          California Grocers Association
          California Hotel and Lodging Association
          California Independent Oil Marketers Association - CIOMA







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          California Manufacturers and Technology Association
          California New Car Dealers Association
          California Retailors Association 
          California Restaurant Association
          California Ski Industry Association
          California State Council of the Society of Human Resource  
          Management
          California Travel Association 
          Camarillo Chamber of Commerce
          Carlsbad Chamber of Commerce
          Chambers of Commerce Alliance Ventura and Santa Barbara Counties
          Civil Justice Association of California 
          Computing Technology Industry Association - CompTIA
          Corona Chamber of Commerce
          Culver City Chamber of Commerce
          El Centro Chamber of Commerce
          El Dorado Hills Chamber of Commerce 
          Gilroy Chamber of Commerce
          Greater Conejo Valley Chamber of Commerce
          Greater Fresno Area Chamber of Commerce
          Greater San Fernando Valley Chamber of Commerce
          International Franchise Association
          Lake Tahoe South Shore Chamber of Commerce
          Montclair Chamber of Commerce
          National Federation of Independent Business
          North Orange County Chamber
          Orange County Business Council
          Oxnard Chamber of Commerce
          Redondo Beach Chamber of Commerce & Visitors Bureau
          Retail Industry Leaders Association
          San Diego Regional Chamber of Commerce
          Santa Clara Chamber of Commerce
          Santa Maria Valley Chamber of Commerce Visitor & Convention  
          Bureau
          Southwest California Legislative Council
          The Chamber of the Santa Barbara Region
          Torrance Area Chamber of Commerce
          United Chambers of Commerce San Fernando Valley & Region
          Valley Industry & Commerce Association
          Wine Institute


                                      -- END --
          








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