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NY Attorney General’s Office Begins Campaign Against Scheduling Practices of Large Retailers

On April 16, 2015 by Schnader in Labor and Employment

By Scott J. Wenner

In letters sent to 13 large retail chains on April 10, available here, the New York State Attorney General’s Office has questioned the lawfulness of a scheduling practice known as “on-call shifts,” and has requested wide-ranging information and documents.  In so doing, New York’s attorney general has joined a growing movement seeking to make the work schedules of employees – especially part timers – in the retail industry more steady and predictable.  That movement received a boost when San Francisco enacted its “Retail Workers’ Bill of Rights” late last year. That ordinance became effective in January 2015, and specifically outlaws many of the practices the New York attorney general appears ready to attack without the benefit of legislation that makes the practices unlawful.  Among the requirements in San Francisco are (i) 2-4 hours of pay to workers who are required to be on call for a shift but are not called into work, and (ii) a requirement that schedules be posted two weeks in advance with penalties for subsequent changes.

After citing the toll that unpredictable work schedules take, particularly on low wage earners, the letter, which is signed by Labor Bureau Chief Terri Gerstein, voices the AG’s particular concern about on-call shifts. Gerstein defines this practice as requiring employees to call in just hours before a shift is scheduled to start to learn whether they should report to work, without receiving any compensation if they are not directed to report for that shift.   Gerstein notes that the employees were not paid even though the employer required them to remain available had they been needed, and could not accept work elsewhere for that on-call shift.  According to the Labor Bureau, the practice, which is said to be “growing,” not only gives short shrift to the needs of the part-timers, but also suggests that it may violate New York’s call-in pay regulation at 12 N.Y.C.R.R. § 142-2.3.  That regulation, which is directed primarily at ensuring a minimum shift length if an employee reports to work, provides “[a]n employee who by request or permission of the employer reports for work on any day shall be paid for at least four hours, or the number of hours in the regularly scheduled shift, whichever is less, at the basic minimum hourly wage.”

The letter sent to the 13 retailers outlines the practice, advises them that the Bureau has reason to believe that they are using on-call shifts as a scheduling methodology, that the Bureau is looking into the practice, and that the agency wishes to examine each recipient’s use of on-call shifts by reviewing their responses to the information and document requests in the letter, which they are directed to produce be early May.

The scheduling systems that utilize the kind of on-call practices criticized in the AG’s letter generally are reliant on software that analyzes a variety of factors, including sales traffic, conversion rates, and even weather conditions, to arrive at a daily scheduling model to maximize revenue and minimize expense. While groups such as the Retail Action Project that are vociferously opposed to the scheduling practices targeted by the attorney general are critical of the retailers’ use of scheduling technology, it appears that these retailers simply are continuing to use the same factors that always drove retail schedules, but that software now is available to analyze the input more quickly and more accurately than in the past.

In addition to technology, what has really changed is the political environment that led to San Francisco’s bill of rights for retail workers, the current pressure for minimum wage increases, the enactment of paid sick time legislation in New York and other cities, and, in all likelihood, the activity commenced in New York to attack retailer scheduling practices.  It will be interesting to see whether the attorney general’s Labor Bureau proceeds against the retailers based upon an elastic interpretation of the regulations cited in the recent letter, or if instead his office waits for legislation that more specifically curbs the practices that the letter cites.

It does appear clear that New York City and/or State legislation will be enacted regardless of the path the attorney general chooses.

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