In case you didn’t know, Oregon enacted the “Fair Work Week” law, making it the first state to legally restrict the scheduling practices of employers in the service sector. The highlights include:
- an obligatory rest period for employees between shifts,
- written work schedules in advance of shifts, and
- additional pay for employees if employers want to deviate from the written work schedule.
The obligations for covered Oregon employers are extensive and onerous. Oregon employers would be well served to begin taking steps to ensure they are prepared to comply well before the effective dates (primarily in July 2018).
Which Employers Are Affected?
The law applies to retail, hospitality, and food service establishments in Oregon that employ 500 or more employees worldwide. In calculating the number of employees, a chain or integrated enterprise is considered one employer. If a separate entity controls the operation of another entity, the entities could collectively be considered an integrated enterprise. The factors to consider in this analysis are the interrelationship between the operations of multiple entities, shared common management, centralized control over labor, and common financial control. Oregon’s Commissioner of the Bureau of Labor and Industries is to adopt further rules outlining when and under what circumstances separate entities constitute a single integrated enterprise.
Which Employees Are Covered?
Oregon employees covered under the law must not only be one of at least 500 employees worldwide but also engaged in providing services relating to retail trade, hotels, motels, or food services, as those terms are defined in the 2012 North American Industry Classification System. However, the law excludes salaried employees, workers supplied by a leasing company, and employees of a business that provides services to or on behalf of the employer.
What Are the Key Provisions?
- Work Schedule Estimate: At the time of hire, an employer must provide a new employee with a written, good-faith estimate of the employee’s work schedule. The estimate must (a) include the expected monthly median number of hours, (b) explain that the employee may elect to be on a voluntary standby list, (c) indicate whether an employee who is not on the standby list can expect on-call shifts, and (d) set forth an objective standard for on-call shifts.
- Standby List: An employer may maintain a standby list of employees who may be asked to work additional hours. The employee must agree in writing to be on the standby list, and the employer must notify the employee in writing of the standby procedures. The employer’s notification must include (a) that the list is voluntary, (b) how an employee can get off the list, (c) how an employer will offer additional hours, (d) how the employee accepts additional hours, and (e) that the employee is not required to accept the additional hours.
- Advanced Work Schedule: An employer must provide a written work schedule at least seven days before the first day of work scheduled (beginning July 1, 2020, this advance notice period expands to 14 days.) The work schedule must be posted in a conspicuous and accessible location and written in the language the employer uses to communicate with its employees. If an employer subsequently changes the work schedule, the change must be timely and the employee can decline the change.
- Right to Rest: Unless an employee agrees, an employee generally gets a 10-hour break between shifts.
- Compensation for Schedule Changes: If an employer changes a work schedule (without the required advanced notice) and the change either (a) adds more than 30 minutes to a shift, (b) alters the date, start time, or end time with no loss in hours, or (c) constitutes an additional shift, then the employee gets an additional 1 hour of pay at the regular rate (over and above wages earned). If an employer changes a work schedule (without the required advanced notice) and reduces or cancels an employee’s scheduled hours, then the employee gets 1.5 times the regular pay rate for each hour scheduled but not worked. Likewise, an employee scheduled for an on-call shift but not asked to perform work gets 1.5 times the regular pay rate for each hour scheduled but not worked.
What Additional Rights Do Employees Have?
The law also contains anti-retaliation provisions and provides employees with a private right of action. Employers are expressly prohibited from interfering with an employee’s rights protected under the law and from retaliating or discriminating against an employee for asking about the law. Also, an employer may not retaliate against an employee who either (a) chooses not to be on the standby list, (b) requests removal from the standby list, or (c) declines to work additional hours as a result of being on the standby list. An employer is subject to a civil penalty (not to exceed $2,000) for coercing an employee into being added to the standby list, with each violation constituting a separate offense.
If You Are a Retail, Hospitality, or Food Service Employer, What Should You Do?
As of today, Oregon is the only state to have enacted this kind of scheduling law. Therefore, so long as you are not a qualifying “employer” with a business establishment in Oregon, there is no need to take any immediate action. However, if you are covered under the law or anticipate entering the Oregon market, you should begin preparing. The first step is to determine whether your business is a qualifying “employer” and is, thus, affected by this law.
The passage of Oregon’s Fair Work Week law – coupled with the recent passage of similar citywide legislation – suggests that you can expect more restrictions on the scheduling practices of retail, hospitality, and food service businesses in the coming years. Apart from the economic effects resulting from the discontinuation of on-call scheduling, the penalties for violating such laws (if Oregon’s law is any example) could be significant. Therefore, employers should keep an eye on this apparent legislative trend and should not hesitate to seek out legal counsel if they believe they might be affected.