BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 878 (Leyva) - Work hours:  scheduling
          
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          |Version: March 15, 2016         |Policy Vote: L. & I.R. 4 - 1    |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: April 25, 2016    |Consultant: Robert Ingenito     |
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          This bill meets the criteria for referral to the Suspense File.




          Bill  
          Summary: SB 878 would provide predictable work schedules to covered  
          employees, as specified, in addition to other requirements.


          Fiscal  
          Impact: The Department of Industrial Relations (DIR) estimates  
          that it would incur annual implementation costs ranging from $1  
          million to $3.6 million (special fund). 

          Background: Low-wage workers are generally more likely to be  
          paid hourly, work less than full time, and have erratic  
          schedules with little advance notice of when they are expected  
          to work. Increasingly used in the service sector, just-in-time  
          (JIT) scheduling, also called "scheduling to demand," is a  
          practice that closely links labor supply to consumer demand.  
          Increasingly used in the service sector, employers rely on  
          scheduling software and measures of demand (such as floor  







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          traffic, sales volume, hotel registrations, dinner reservations,  
          or the weather) to match workers' hours to labor needs. Weekly  
          schedules are sometimes posted with just a few days notice and  
          last minute schedule changes are made often resulting in workers  
          showing up for work only to be sent home, being asked to stay  
          beyond a scheduled shift, or being called in on a day off. Some  
          employers change posted schedules at the last minute even if it  
          means sending workers home after they arrive for work or asking  
          them to stay beyond the end of their shift. Such practices can  
          complicate the lives of workers and their families, especially  
          with respect to child care arrangements, transportation, and  
          working more than one job. 
          In December 2014, San Francisco passed the "Retail Workers Bill  
          of Rights," which included two ordinances regulating hours,  
          retention, scheduling, and treatment of part-time employees at  
          some Formula Retail Establishments. The ordinances, which took  
          effect on March 1, 2016 and 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: 


                 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. 


                 Two Week's Notice of Work Schedules - Schedules may be  
               posted in the workplace or provided electronically. 


                 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).


                 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.









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                 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.    







          Proposed Law:  
          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, the  
          bill would, among other things, do the following:
                 Require employers of a restaurant, grocery or retail  
               store, as defined, 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. 


                 Require modification pay, as defined, 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.


                 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:


                  o         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.










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


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


                 Specify that for each on-call shift, as defined, 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.


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


                 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, and that these provisions shall not prohibit an  
               employee from requesting additional or fewer hours of work.


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


                 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. 


                 Provide that the modification pay requirements do not  
               apply, and an employer shall not be deemed to have violated  
               these requirements, under specified circumstances.









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                 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. 


                 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.


                  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. 


                 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.


                 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.


                 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.


                 Authorize the Labor Commissioner, if a violation has  








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               occurred, to order any appropriate relief to the employee,  
               including, but not limited to, the following:


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


                  o         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.


                  o         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).


                  o         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.


                 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  








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               penalties, and reasonable attorney's fees and costs.


                 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.


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


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


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







          Related  
          Legislation: AB 357 (Chiu, 2015) 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. The bill was never taken up  
          for an Assembly Floor vote and died on its Inactive File.  









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          Staff  
          Comments: Estimating the number of wage and retaliation claims  
          DIR would receive under this bill will receive is difficult to  
          predict. With respect to AB 357, DIR estimated costs in the  
          range of $1 million to $2.8 million to cover personnel costs  
          associated with processing claims.
          This bill would affect a larger category of employers and  
          employees, and also has more expansive retaliation protections.  
          Consequently, DIR's estimates implementation costs would be a  
          range of $1 million to $3.6 million in additional staffing to  
          handle additional wage and retaliation claims as a result of  
          this bill.




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