Oregon Bureau of Labor and Industries Issues Final Administrative Rules on Predictive Scheduling

By Benjamin P. O'Glasser - Bullard Law

June 19, 2018

Oregon’s predictive scheduling law goes into effect on July 1, 2018.  We previously wrote about Oregon’s predictive scheduling law in August 2017. 
 
In advance of the law’s effective date, the Oregon Bureau of Labor and Industries (BOLI) has issued final administrative rules that will govern its administration of the law.  This post supplements our earlier post about Oregon’s law, detailing only the most notable clarifications from the rules. 
 
Covered Employers and Employees
 
Large employers (500 or more employees) in the retail, hospitality, and food services industries are covered by the law.
 
The final rules clarify that employers’ coverage is determined by the NAICS classification of its overall operations.  Employers need not consider whether a discrete portion of its operations would theoretically fall under an NAICS code that would trigger coverage.  For example, a hospital is not classified under either retail, hospitality, or food services code; accordingly, the staff of a large hospital’s gift shop and cafeteria—although engaged in retail and food service work, respectively, at a large employer—is not covered by the predictive scheduling law.  However, if a hospital’s gift shop is operated by a chain of hospital gift shops that is a large employer covered by a retail NAICS code, its staff would be covered.  The final rules provide that successor employers are covered if they are substantially the same entity as a covered predecessor.
 
Importantly, the rules clarify that the law is applicable only to employees of a covered employer whose primary duties are related to retail, hospitality, or food services functions.  For example, the law applies to a waiter in a large restaurant chain, but not to an office assistant in the restaurant’s payroll office. 
 
Finally, the rules provide criteria for determining whether an enterprise is an integrated enterprise for purposes of counting employees under the law.  Criteria for this analysis include the degree of: interrelationship of the entities, common management, centralized labor relations, and common ownership.  For example, restaurant franchises that rely on the franchisor for human resources and supply ordering functions are likely to have their employees counted along with all similarly situated franchisees for purposes of determining coverage under the law.  Notably, proposed rules that would have been applicable to joint employers have been removed from the final rules. 
 
Employee Protections and Premium Pay
 
Covered employees of covered employers are entitled to predictability in their schedules, protections against being forced to accept changes to their schedule on short notice, and additional compensation in many circumstances where there are last-minute changes to the work schedules. 
 
First, employers must provide new hires with a good faith estimate of their work schedule and must tell the employee at that time where it will post work schedules.  The initial notice must include a reasonable prediction of the employee’s median number of hours, which must be a specific number (not a range) and reflect a reality-based calculation.  Then, at least seven days before the first day of a work schedule (increasing to fourteen days in 2020), employers must post a written work schedule (including both on-call shifts and specific start and end times) in a specified, conspicuous location.  Both good faith estimates and the schedules must be published in English and the language the employer typically uses to communicate with the employee.  If an employer seeks to change a shift, they must do so on a “timely” basis, which requires notification to the employee of the need for the change without undue delay after discovering the need.  Employees are not required to agree to changes. 
 
If an employer maintains a voluntary standby list, an employee may agree in writing to accept additional shifts without triggering a requirement for premium pay.  Only employees who are trained for and qualified to do work for which hours are being offered are considered to be on the list for notification purposes.  For example, a restaurant can maintain a voluntary standby list for all employees, but need not offer available hours of work waiting tables to the back-of-the house employees who work in different capacities. BOLI may impose penalties if the standby list, or acceptance to work pursuant to the standby list, are coerced.
 
Importantly, the final rules clarify that changes to the work schedule may be made without restriction or penalty until seven days prior to the start of the workweek of the shift in question.  Therefore, a covered employer can issue a monthly schedule and make changes to the third week of the month until the end of the first week of the month.
 
The final rules detail that it is an unlawful employment practice for employers to discriminate or retaliate against an employee and provide for a private right of action for claims of discrimination or retaliation for inquiring about or exercising the scheduling rights provided for under the law.   This creates challenges for covered employers, potentially converting a broad swath of employee statements in the context of scheduling discussions into protected activity.
 
Premium Pay
 
Once a schedule is published, any changes initiated and imposed by the employer will result in additional compensation due to the employee.  Employers must pay one hour of additional compensation for any change to the date or start or end time of a shift that does not involve a loss of hours for the employee.  In addition, employers must pay an employee half of their regular rate of pay for any reduction in hours or for on-call shifts where an employee is not called into work.  Finally, employees cannot be required to work during the ten hour period after any shift (excluding split shifts on the same day), and receive time and a half for any hours that they agree to work during that protected break period.
 
Employees who are returning from a leave or being promoted are not eligible for extra pay because they receive a new schedule with less than seven days’ notice.  Such employees should be given a schedule through the last date that is posted for other employees. 
 
The final rules clarify that additional payments required under this law do not affect the regular rate for purpose of overtime.  Additionally, if a minor employee receives payment under this law, they are not eligible for “reasonable compensation” payments triggered by laws governing minor employees.
 
The regular rate of pay for purposes of the law is defined by rule to be the rate of pay that the employee would have received if there was no change in schedule.  Where multiple pay rates are involved, the final rules set guidelines for determining the appropriate hourly or pro-rata piece rate compensation.  The regular rate does not include any overtime that would have been earned, but does include any shift differential that would have been applicable to the shift in question.
 
Record Retention Requirements
 
Employers must maintain records of compliance for three years and make the records available to BOLI upon request. 
 
The records retained must include (1) written work schedules; (2) employee’s written requests to change schedules; (3) the good faith estimates issued by the employer; (4) records related to any standby list (including employer notification of the list and employee requests or agreement to be on the list); (5) any individual notice of rights provided to employees; and (6) any records of discipline-based scheduling modifications. 
 
Collective Bargaining Exception
 
The final rules clarify that the predictive scheduling law is inapplicable if a collective bargaining agreement provides for remedies for each employee that are equal to or better than the employee’s remedies under the predictive scheduling law.
 
Penalties
 
Violations of the requirements of the rules, as well as abusing the voluntary standby list, may trigger civil penalties.  The final rules authorize BOLI to issue civil penalties of up to $1,000 for most violations and permits BOLI to evaluate any aggravating or mitigating circumstances in determining the actual amount of the civil penalty.  Higher fines may be imposed if an employer coerces an employee to agree to be added to the voluntary standby list.  Failure to post the required notice may result in a fine of up to $500.  The BOLI civil penalties are in addition to any other civil remedies. 
 
Next Steps
 
In advance of July 1, covered employers should ensure that their scheduling and documentation practices track the requirements of the new law.  Please contact Ben O’Glasser (boglasser@bullardlaw.com or 503-721-2674) for assistance in developing an approach to compliance.