On November 22, 2022, the Los Angeles City Council passed the Fair Work Week ordinance (the “Ordinance”). The Ordinance passed with a 10-0 vote, and will go into effect on April 1, 2023. Covered employers subject to the requirements of the Ordinance are retail businesses with 300 or more employees globally, regardless of how many employees are based in Los Angeles.

The Ordinance requires covered employers to provide employees who work at two hours a week within the City of Los Angeles with written notice of their work schedules at least fourteen calendar days before the start of the work period. Notice may be provided by posting the work schedule in a physical, accessible location, or by electronic means. If an employer makes changes to the work schedule, written notice must be provided to the employee, and the employee has a right to decline any changes, including changes to hours or work location. If an employee accepts the changes, they must provide written consent.  Covered employees also have the right to request certain hours, times or work locations, and the employer must provide a reason in writing for any denial. The Ordinance prohibits employers from requiring that employees find coverage for an employee who is unable to work for reasons protected by law. The Ordinance also prohibits any retaliation against employees who assert rights established by the law.

Under the Ordinance’s predictability pay requirement, the employer must also pay one additional hour of time for each change to a scheduled date, time, or location that results in additional work time that exceeds 15 minutes; any changes that reduce the work schedule by at least 15 minutes must be compensated at one-half the employee’s regular rate of pay. Predictability pay is not required when the employee initiates the change, when hours are reduced due to the employee’s violation of policy or law, when the extra hours worked require payment of overtime, when employer operations have been compromised due to law or force majeure, when the change has been made as a result of the employee’s acceptance of increased work that would otherwise go to an independent contractor or new hire, or when the change has been made due to the absence of another employee or unanticipated customer need. 

Before hiring a new employee, a covered employer must provide a written good faith estimate of that employee’s work schedule. If an employee’s actual work hours substantially deviate from the good faith estimate, the employer must have a documented, legitimate business reason that was unknown at the time the good faith estimate was provided in order to justify the deviation.

The Ordinance restricts retailers’ ability to hire new workers, contractors, or temporary employees. Before a covered employer can hire those workers, they must offer the available work to current employees if a current employee is qualified, and the additional work hours would not require payment of overtime or premium pay.  Covered employers are required to offer additional work hours to current employees at least 72 hours before hiring any new employees or contractors to perform the job. The only way that employers can waive this 72 hours window is if they receive written confirmation from each current employee that they are not interested in the additional work.

Covered employers are required to provide workers with a minimum of ten hours of rest in between shifts. An employee may agree to work shifts without this minimum rest, if they provide written consent. In that case, the employer must pay the employee a premium rate of 1.5 times the regular rate of pay.

The Ordinance has onerous recordkeeping requirements. Covered employers must keep three years of records for current and former employees including work schedules, good faith estimates of hours, written correspondence about work schedule changes, and written offers for additional work hours.

The Ordinance also has severe enforcement provisions, beginning with a right for aggrieved employees to bring a civil action for penalties against an employer.  Penalties can be issued in the amount of $120 for each employee whose rights were violated for each day that the violation occurred or continued. In addition, employees have the right to reinstatement of employment, injunctive relief, and reasonable attorneys’ fees and costs. 

Violations of the Ordinance may also be reported to the Office of Wage Standards of the Bureau of Contract Administration within the Department of Public Works (the “Division”). The Division has the authority to investigate violations of the Ordinance by employers, and employers are required to cooperate with all such investigations. If the Division determines that an employer has violated the Ordinance, it will issue a Notice of Correction to the employer, which the employer must post.  The employer will have the opportunity to meet with the Division to try to resolve the corrective action, but if those discussions fail, the employer is subject to penalties of up to $500 for each violation of the Ordinance as well as $120 for each employee whose rights were violated for each day that the violation occurred or continued.  In retaliation actions, the employee is also entitled to reinstatement of employment and triple the damages and penalties owed. An additional administrative fine of up to $50 per day for each violation is payable to the City of Los Angeles.  The Ordinance provides a 180-day grace period after the effective date during which penalties will not be imposed, and only written warnings will be issued. Notice of the Ordinance must be posted each year as published by the Division. 

Similar scheduling ordinances have been passed in a number of cities including New York City, San Francisco, Philadelphia, and Seattle. New York City’s law covers fast food workers rather than retailers, so this ordinance may be expanded to cover fast food employers. At the state level, only Oregon has a similar law.  Oregon’s predictive scheduling law covers retail, hospitality, or food service establishments with more than 500 employees worldwide. If the roll out of the Ordinance is successful, California employers can anticipate an expansion to industries beyond retail.