November 17, 2017
Employment Law Alert
Employment Law Alert
Recently, Governor Andrew M. Cuomo announced that the New York Department of Labor will advance proposed regulations addressing “call-in” or “on-call” scheduling. This alert discusses what employers need to know.
On Thursday, November 10, 2017, Governor Andrew M. Cuomo announced that the New York Department of Labor (“NYSDOL”) will advance regulations addressing “call-in” or “on-call” scheduling. Employers using these scheduling practices—common in many industries—sometimes schedule or cancel a worker’s shift a few hours before, and sometimes after, the shift starts. According to the NYSDOL, “these practices often leave workers scrambling to find child care and force them to miss appointments, classes or important family commitments.” The proposed regulations would only modify the Minimum Wage Order for Miscellaneous Industries and Occupations for nonexempt employees. Thus, the proposed regulations would not affect businesses subject to the hospitality, farming and building service industry wage orders.
In September 2017, Governor Cuomo directed the NYSDOL to hold hearings regarding employee scheduling. The NYSDOL held a total of four public hearings where the agency heard testimony from workers, advocacy groups and employers. Based on those hearings, the NYSDOL developed these proposed regulations which Governor Cuomo claims “will increase fairness for workers and allow employers to retain flexibility.”
The proposed regulations are as follows:
The calculation of call-in pay under the proposed regulations requires that time of actual attendance be paid at the employee’s regular rate or overtime rate of pay, whichever is applicable, minus any allowances permitted by law. However, call-in pay for hours not actually worked will be calculated at the basic minimum wage for an employer’s geographic area and employer size. Such payments are not payments for time worked and need not be included in the regular rate for purposes of calculating overtime pay.
The minimum pay requirement for call-ins is similar to the current rule, but the proposed regulations would eliminate the offset that is now permitted for pay in excess of minimum wage. Under the current rule, an additional payment is only required if the employee’s wages for the workweek, as normally calculated, are less than the minimum and overtime rate for all hours worked plus any call-in pay owed. Thus, employees earning above minimum wage are often not entitled to an extra call-in payment. Under the proposed regulations, a covered employee would be entitled to call-in pay regardless of other pay in excess of minimum wage.
Moreover, under the current rule, call-in pay is not required for “regularly scheduled” shifts. Under the proposed regulations, the four-hour rule applies unless the employee’s “total hours worked, or scheduled to work, for that shift do not change from week to week.”
The regulations also contain significant exceptions. All of the new modifications outlined above, except for the minimum four-hour rule for call-ins, do not apply to employees during work weeks when their weekly wages exceed 40 times the applicable basic hourly minimum wage. Thus, employees paid minimum wage who work more than 40 hours in a week will not be subject to those requirements for that week, and employees earning more than minimum wage will be ineligible even if they work less than 40 hours if their earnings for the week exceed 40 times the minimum wage. Additionally, all employees covered by a collective bargaining agreement that expressly provides for call-in pay would be exempt from these regulations.
The NYDSOL insists that the regulations will also benefit employers because they “[p]rovide flexibility by allowing new shifts to be offered without a premium during the first two weeks of a worker’s employment, permit[ ] worker shift swaps and substitutions without penalty and allow[ ] for weather related cancellations without penalty with 24-hours’ notice.” Additionally, the NYSDOL states that the regulations “[i]mpose no blanket prohibitions or mandates,” meaning “employers retain control over their scheduling practices and those who provide predictable scheduling will see no additional compliance costs.”
The proposed regulations are clearly aimed at providing employees subject to “call-in” or “on-call” scheduling with more predictable schedules. If an employer is able to keep employees on a set schedule or provide them with the requisite advance notice, then it will be able to avoid the additional monetary obligations imposed by the regulations. Although the regulations, if adopted, will not take effect until sometime next year, employers should examine their policies now to determine if they can modify their practices to avoid the additional wages owed. For many employers, the last-minute unpredictability of “call-in” or “on-call” shifts is unavoidable, so they will need to budget for the extra cost if the proposed regulations become final.
The regulations will be published in the State Register on November 22, after which, they are subject to a 45-day comment period. If employers would like to submit a comment, they may send any such comments to email@example.com.
In addition to these proposed regulations, New York City employers in the fast food or retail industries should be aware of the significant scheduling changes in New York City’s “Fair Workweek” bills, which are set to take effect on November 26, 2017.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.