Retail Worker Fair Work Week Ordinance Passed in Los Angeles

The Los Angeles City Council passed the Fair Work Week Ordinance (“FWWO”) that seeks to “implement enforcement measures for new Fair Work Week employment standards” for employees in the retail sector. Coming into force on 1 April 2023, the FWWO will apply to any person, association, organisation, partnership, business trust, limited liability company or corporation in the retail business or trade sector that directly or indirectly exercises control over wages, hours or conditions. with at least 300 employees worldwide. This includes employees through an agent or any other person, including the services of a temporary staffing agency.

The ordinance applies to the geographic limits of the City of Los Angeles. Employees are afforded FWWO protection if they (i) perform at least two hours of work within the City of Los Angeles for an employer in the retail sector and (ii) are eligible for the minimum wage under California’s minimum wage laws.

According to the North American Industry Classification System, within categories and subcategories of retail trade 44 through 45, which generally consist of establishments primarily engaged in the sale of goods and the performance of services incidental to the sale of goods. Industries within the retail trade category include health and personal care retailers, clothing retailers, auto and parts retailers, food and beverage retailers, building materials and garden equipment retailers, general merchandise retailers, furniture and appliance retailers, gas stations, electronics retailers, as well as sporting goods, hobby, musical instrument and book retailers.

The Ordinance requires the employer to provide employees with written notice of their working hours at least fourteen calendar days before the start of the work period either by posting the working hours in a visible and accessible place or by broadcasting the working hours on provide actual notice to each employee in a reasonably calculated manner. If an employer changes the work schedule after it has been posted or sent to employees, written notice must be provided, and the employee has the right to refuse any changes to hours, shifts, or work locations that are not included in the work schedule. If an employee voluntarily consents to work hours or shift changes, such consent must be in writing and the employee may be entitled to “predictable pay” of an additional hour’s pay at the “regular rate of pay.” of the employee – which we have previously discussed here – for any changes.

The FWWO also requires employers to provide each prospective new employee with a good-faith written estimate of the employee’s work schedule, including when they will be required to be on call. A good faith estimate is not a binding, contractual offer. However, if the employee’s actual work hours deviate significantly from the bona fide estimate, the employer must have a documented and legitimate business reason to justify the deviation.

Before hiring a new employee or using a “contractor” (although this term is not defined within the FWWO), temporary service or staffing agency to perform work, an employer must offer work available to current employees if a or more of the employee is qualified to perform the work and the additional hours worked would not result in overtime or double time pay. The offer must be made to current employees either in writing or by posting the offer in a conspicuous place at least 72 hours before hiring someone new.

FWWO also seeks to prevent “closing” shifts, where an employee is scheduled to close and open shifts consecutively. The ordinance prohibits employers from assigning an employee to work a shift that begins less than ten hours after their last shift without the employee’s written consent. The employer is also required to pay an employee a time and a half premium for any shift that is not divided by at least ten hours.

Under the FWWO, a worker is presumed to be an employee, and an employer has the burden of proving that a worker is an independent contractor. Taking adverse action against an employee within ninety days of the employee’s exercise of any rights protected under the ordinance will raise a rebuttable presumption that he did so in retaliation for the exercise of those rights. An alleged violation can only be acted upon if the employer does not take steps to cure the alleged violation within 15 days of receiving the written notice. A violation of the ordinance may subject an employer to pay statutory damages and penalties, in addition to an employee’s attorneys’ fees and costs.

The ordinance makes it critical for affected retail employers doing business within the City of Los Angeles to not only prepare employee schedules in advance, but also adhere to those schedules in order to avoid potential staff shortages in a shift or the obligation to pay salary premiums. It is equally critical for such employers to obtain written employee consent to changes in work schedules or when scheduling “lock-in” shifts to prevent claims of alleged FWWO violations.