Scheduling Mandate Job Killer Bill Moves forward to Senate Appropriations Committee

A California Chamber of Commerce-opposed job killer bill subjecting employers to financial penalties and litigation for changes to an employee’s schedule with less than seven days notice passed a Senate policy committee this week. SB 878 (Leyva; D-Chino) passed the Senate Labor and Industrial Relations Committee on a 4-1 vote on April 13. The bill mandates an employer in the retail, restaurant, or grocery industry—regardless of size—to provide employees with a 21-day work schedule that must be given to an employee at least seven days before the first scheduled shift, which thereby requires a 28-day notice of their work schedule.

"The bill will require employers to provide predictability to employees, but it will exchange it for flexibility in the workplace. Employers will no longer be able to accommodate last-minute requests by employees for schedule changes due to personal needs," said CalChamber Policy Advocate Jennifer Barrera. "The threat of litigation and costly penalties is just too high to make a mistake."

The San Francisco ordinance that went into effect in July 2015 requires specified "formula retail establishment" employers to provide 14 days’ notice of a schedule.

SB 878 is significantly broader, applicable to any restaurant, grocery store, or retail establishment, regardless of the number of employees, and basically requires a 28-day notice of an employee’s schedule.

Since the San Francisco ordinance took effect, many employers have refused to change a schedule once posted, which has harmed employees’ requests for changes due to personal needs. In addition, employees who want and have requested additional hours of work are not provided those hours, given the threat of financial penalties against employers for the schedule change.

SB 878 requires employers to provide "modification pay" for changes made to an employee’s schedule with less than seven days notice.

Although SB 878 provides several exemptions as to when "modification pay" applies, employers will nevertheless be wary to make any changes to an employee’s schedule to avoid the potential for modification pay or litigation.

As CalChamber explained in its analysis, with all these potential consequences at risk, an employer covered by SB 878 will never change an employee schedule, even if it appears the change falls within one of the listed exceptions or the employee actually volunteers and requests the change/additional hours of work. The risk to the employer for a mistake is simply too great.

A small employer with limited resources will not be able to manage the 21-day "work schedule" that must be given to employees at least seven days in advance of their first shift, or the nuances with regard to when "modification pay" applies.

Moreover, it is unclear from the definition which employees SB 878 covers when an employer has hybrid operations.

For example, will a manufacturer or an employer in the technology industry that has an on-site cafeteria for its employees be required to comply with this scheduling requirement for the entire workforce? Will the hotel that has a gift shop, restaurant, or bar located on its premises be forced to comply with SB 878 for all employees?

Given SB 878’s broad definition of an employer, as well as the statutory scheme of penalties, litigation and enforcement, employers that are not primarily engaged in selling merchandise or food will be forced into the provisions of this mandate.

The mandate under SB 878 fails to take into consideration the varying business models for employers who sell food or merchandise. Although some may have predictability and therefore, the ability to provide such extensive notice, others cannot.

Second, this mandate will force employees to predict their own schedule more than 30 days in advance in order to provide their availability to an employer so the employer can create a 28-day notice schedule.

As employers have experienced in San Francisco with the local ordinance mandating a 14-day notice schedule, many employees cannot commit to shifts so far in advance, and end up frustrated with the schedule they receive that the employer cannot or will not change due to the threat of financial penalties.

The Labor Code Private Attorneys General Act (PAGA) creates a representative action for any aggrieved employee for any Labor Code violation, including statutory penalties and employee-only attorney’s fees. As the Governor’s budget estimates, the Labor and Workforce Development Agency receives more than 6,000 PAGA notices a year.

SB 878 would add to this growing problem, as any violation of SB 878 would subject an employer to PAGA litigation. Even if the employer pays the employee "modification pay" for changes to the employee’s schedule, the employer still could be subject to significant penalties and attorney’s fees for PAGA litigation.

In addition, an employee also could threaten to file an unfair competition claim under Business and Professions Code Section 17200, as well as a common law wrongful termination claim.

Under SB 878, an employer also faces investigations and enforcement actions by the Labor Commissioner and the Attorney General for failure to properly provide "modification pay," thereby exposing the employer to numerous threats of litigation and exposure for simply changing a schedule due to the employee’s request.

SB 878 will be considered next by the Senate Appropriations Committee. The CalChamber is urging members to contact their senators to ask them to oppose SB 878. An easy-to-edit sample letter is available at www.calchambervotes.com.