As a result of two amendments to the New York City Fair Workweek Law that are now in effect, fast food employers are now prohibited from terminating or substantially reducing the hours of their fast food employees without providing an economic or job performance-related reason. The amendments also impose a progressive discipline requirement and prescribe a procedure for conducting economic-based layoffs or reductions in hours as well as employee recalls.
These new requirements only apply to fast food employers – i.e., food and beverage establishments that operate as part of a chain with 30 or more establishments nationally, including as part of an integrated enterprise or as separately owned franchises.
The amendments, which took effect on July 4, 2021, collectively impose the following requirements:
Regular Written Schedule
Fast food employers must provide employees with a written copy of their regular schedule, which should show a predictable, regular set of recurring weekly shifts the employee will work each week – not just a “good faith estimate” as previously required.
Just Cause or Bona Fide Economic Reason for Termination or Substantial Reduction in Hours
Fast food employers must have “just cause” to terminate employment or reduce an employee’s hours by 15% or more of the employee’s regular schedule or any weekly work schedule, unless there is a documented “bona fide economic reason” for doing so (provided the employee has completed the employer’s probationary period, if any).
“Just cause” is defined as an employee’s “demonstrated misconduct or poor performance” which is “demonstrably and materially harmful to the fast food employer’s legitimate business interests.”
In establishing “just cause,” the employer should ensure that the employee knew or should have known of the policy, rule or practice that is the basis for progressive discipline or discharge, conduct an objective investigation into the job performance or alleged misconduct at issue, and establish that the employee did in fact violate such policy, rule or practice. The circumstances supporting “just cause” must be well-documented.
A “bona fide economic reason” exists only where there is a full or partial closing of operations, or technological or organizational changes to the business in response to the reduction in volume of production, sales or profit, and must be supported by business records.
Written Explanation of Adverse Action
Fast food employers must provide the “precise reasons” for the termination or reduction in hours to the employee within five days of the adverse action in writing.
It is imperative that the “just cause” be fully detailed in the written notice to the employee – if the decision is challenged, a fact-finder may not consider any reasons proffered by a fast food employer that are not included in the written explanation in making a “just cause” determination.
The New York City Department of Consumer and Worker Protection (DCWP) has released template termination, layoff and hours reduction notices for fast food employers use, available here.
Progressive Discipline Policy
Fast food employers must implement a “progressive discipline” policy providing for a graduated range of reasonable responses to a fast food employee’s failure to satisfactorily perform their job duties, with the disciplinary measures ranging from mild to severe, depending on the frequency and degree of the failure.
The DCWP has published guidance, available here, regarding progressive discipline policies.
Procedure for Economic-Based Layoffs/Hours Reductions and Recalls/Schedule Restoration
Fast food employers must conduct layoffs or reduction in hours based on a bona fide economic showing in reverse order of seniority (i.e., last hired, first fired).
Fast food employers who conducted layoffs and/or hours reductions for a bona fide economic reason may not hire any new employees or assign additional shifts to current employees unless and until it “make[s] reasonable efforts to offer reinstatement or restoration of hours” to any employees who were discharged or had their hours reduced for economic reasons within the previous 12 months.
Schedule Change Premiums
An employee who loses a shift on a work schedule, including an employee whose employment is terminated for any reason, is entitled to schedule change premiums for each lost shift. Schedule change premiums range between $20-75 per shift depending on the amount of notice provided to the employee. To avoid liability for schedule change premiums, fast food employers must provide employees with a minimum of fourteen (14) days’ notice of the schedule change or their termination, as applicable.
There is no stated exception to this requirement for situations that warrant immediate dismissal due to egregious misconduct (e.g., theft) or job abandonment. However, the City has taken the position that multiple warnings are not necessary for egregious failure to perform job duties or misconduct. We anticipate further guidance from the City on this issue.
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Though these requirements may seem onerous, fast food employers must ensure they fully comply with the procedures detailed above, as the consequences for violation can be significant. Fast food employers who violate these provisions may be subject to mandated reinstatement or schedule restoration, payment of unpaid schedule change premiums, back pay, civil penalties and/or reasonable attorneys’ fees and costs to the employee.
In addition to the above, fast food employers must post the updated Employees’ Notice of Rights conspicuously in the workplace in English and in any language that is the primary language of at least 5% of the workers, if a notice in that language is available on the DCWP website.
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If you have questions or would like additional information, please contact any of our Labor & Employment attorneys or the primary EGS attorney with whom you work.