Berkeley, California recently joined Los Angeles, San Francisco and Emeryville, California; New York City; Philadelphia; Chicago; Seattle; Euless, Texas; and Oregon as jurisdictions that have enacted “fair workweek” legislation.  The Berkeley Fair Work Week Ordinance will apply to businesses that employ at least 10 employees within the City of Berkeley that are:

• primarily engaged in the building services, healthcare, hotel, manufacturing, retail, or warehouse services industries, and employ 56 or more employees globally; or
• primarily engaged in the restaurant industry, and employ 100 or more employees globally; or
• franchisees primarily engaged in the retail or restaurant industries and associated with a network of franchises with franchisees employing in the aggregate 100 or more employees globally; or
• not-for-profit corporations exempted from taxation under Section 501 of the United States Internal Revenue Code in the industries specified under subsection (a)(1), (2), and (3) employing 100 or more employees globally.

Employees of such businesses who qualify for minimum wage and perform at least two hours of work in a workweek in the City of Berkeley will be covered by the ordinance, which contains a host of scheduling and recordkeeping requirements. The ordinance will take effect in January 2023; however, it will not become operative until 2024 according to the terms of the ordinance.   

Good-Faith Estimate

Covered employers are required to provide all new employees with an initial estimate of minimum hours they will be expected to work on their first day of employment. While regulations are expected to be published that will identify the information that needs to be included in the good-faith estimate, other jurisdictions have required such estimates to identify the actual days the employee will be expected to work and a narrowly tailored range of hours within those days the employee is expected to be scheduled.  The good-faith estimate will also likely require employers to identify the days the employee will not be expected to work. Generally, a significant deviation from the good-faith estimate will violate the ordinance unless the employer has a documented, legitimate business reason for the change that was unknown at the time the good-faith estimate was given to the worker.  A new employee may submit a written request to modify the estimated work schedule, and the covered employer in its sole discretion may accept or reject the request and notify the employee of the covered employer’s determination in writing prior to or on the commencement of employment.

Advance Notice of Work Schedule

The statute requires covered employers to provide their employees with at least two weeks’ notice (14 days) of their work schedules by doing one of the following: (1) posting the work schedule in the workplace in a conspicuous place that is readily accessible and visible to all employees; or (2) transmitting the work schedule by electronic means, so long as all employees are given access to the electronic schedule at the workplace.

Current Employee Rights to Additional Work Hours

The ordinance prohibits covered employers from hiring new employees (including contractors and temporary employees) unless they have first offered additional work hours and shifts to current employees.  Covered employers need offer these open shifts or hours only to employees that the employer reasonably determines are qualified to perform the available work.  For example, if a covered employer needs a new cashier, the employer would not need to offer cashier hours to employees who have not been trained in cash handling or in the use of the employer’s point-of-sale system.

The ordinance requires that employees have 24 hours to accept an offer of additional work. The 24-hour period begins when the employee receives the written offer of additional hours, or when the covered employer posts the offer of additional hours, whichever is sooner. The employee must accept the additional hours in writing.

Employers may hire new employees to meet increased demand only if no current employees are qualified or none volunteer, or if allowing current employees to take on the additional work would require the payment of overtime (or other predictability pay) to current employees.

Predictability Pay for Work Schedule Changes

A covered employer must provide employees with written notice of any change to the employee’s schedule within 24 hours of a schedule change. Generally, an employee has the right to decline any previously unscheduled hours that the covered employer adds to the employee’s schedule if the employee has been provided notice less than 14 days before the first day of the schedule.

The ordinance requires covered employers to issue predictability pay whenever they change an employee’s schedule as follows. 

• When a covered employer adds or subtracts hours, moves a scheduled shift to another date or time or cancels, or adds a previously unscheduled shift to an employee’s schedule with less than 14 days’ notice, but more than 24 hours’ notice, then the employer owes the employee: one hour of predictability pay at the employee’s regular rate of pay;
• When a covered employer adds or subtracts hours, moves a scheduled shift to another date or time or cancels, or adds a previously unscheduled shift to an employee’s schedule with less than 24 hours’ notice, then the employer owes the employee:
  
  • four hours or the number of canceled or reduced hours in the employee’s scheduled shift, whichever is less, when hours are canceled or reduced;
  • one hour of predictability pay for any additions and all other changes.

Predictability pay is not required if:

• There is a mutually agreed-upon work swap or coverage arrangement between employees;
• The employee initiates voluntary shift modifications (including vacation/sick leave).  This exception applies only to the employee requesting the modification;
• An employee works no more than 30 minutes past the end of a scheduled shift to complete service to a customer, provided the employee is compensated at their regular rate of pay for the additional work performed by the employee;
• An employee begins or ends their scheduled shift not more than 10 minutes prior to or after the scheduled shift, provided the employee is compensated at their regular rate of pay for the additional work performed by the employee;
• When operations cannot begin or continue due to extreme acts of nature (floods, fire, strikes, force majeure, pandemic, war, etc.).

Notably, an employee’s simply agreeing or consenting to work additional hours or shifts does not exempt a covered employer from having to pay the employee schedule change predictability pay.

Rest Time Between Shifts

An employee has the right to decline work hours that occur less than 11 hours after the end of the previous shift. An employee who agrees in writing to work hours described in this section shall be compensated at one and one-half times the employee’s regular rate of pay for any hours worked less than 11 hours following the end of a previous shift.

Penalties and Enforcement

The City Manager’s Department is tasked with enforcement of the Ordinance and can assess fines for retaliation in addition to violations of the Ordinance.  The fine for retaliation is $1,000 for each employee retaliated against.  Fines of $500 may also be assessed for any failure to provide notice of employees’ rights; failure to timely provide an initial or updated work schedule; failure to provide predictability pay for schedule changes; failure to offer work to existing employees before hiring new employees; failure to maintain payroll records for the minimum period of time (three years); and failure to allow the Department access to such payroll records.

Additional remedies for violation of this Ordinance include reinstatement, the payment of predictability pay unlawfully withheld, and the payment of an additional sum as a civil penalty in the amount of $50 to each employee whose rights under this chapter were violated for each day or portion thereof that the violation occurred or continued with a maximum penalty of $1,000 per employee per year.

Next Steps

Compliance with predictable scheduling laws provides a host of structural and cultural challenges for covered employers. For example, managers need to be trained that they are obligated to finalize, publish and distribute schedules with far more advance notice than they may be used to.  Similarly, managers need to be reminded that predictable scheduling laws prohibit even minor schedule deviations.  Managers who may be used to texting with employees and asking employees to cover shifts are no longer permitted to make such changes without first getting an employee’s written consent.  Likewise, managers must ensure that employees leave at the scheduled end of a shift, even if they are busy.  Allowing employees to stay more than 10 minutes after the scheduled end time without an employee’s consent would constitute a violation and schedule change predictability pay would be owed.  Perhaps most difficult, managers need to understand that they simply cannot hire new employees to meet anticipated demand.  Instead, they need to comply with the access to hours process or risk incurring heavy fines and penalties. 

The final ordinance can be found here.