BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 878 (Leyva) - Work hours: scheduling ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: March 15, 2016 |Policy Vote: L. & I.R. 4 - 1 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: April 25, 2016 |Consultant: Robert Ingenito | | | | ----------------------------------------------------------------- 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 SB 878 (Leyva) Page 1 of ? 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. SB 878 (Leyva) Page 2 of ? 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. SB 878 (Leyva) Page 3 of ? 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. SB 878 (Leyva) Page 4 of ? 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 SB 878 (Leyva) Page 5 of ? 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 SB 878 (Leyva) Page 6 of ? 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. SB 878 (Leyva) Page 7 of ? 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. -- END --