The Massachusetts Attorney General recently joined the New York Attorney General and others in an inquiry into the controversial practice of retail on-call scheduling. Some large, national retailers receiving a letter were BCBG Max Azria, Carter’s Inc, Canada’s DavidsTea Inc, Forever 21 Inc, Ascena Retail Group Inc’s Justice, Pacific Sunwear of California Inc, Payless ShoeSource, Tillys Inc, Fast Retailing Co’s Uniqlo, VF Corp’s Van’s and Zumiez Inc, Aeropostale Inc, American Eagle Outfitters Inc, Coach Inc and Walt Disney Co.
The practice goes like this: In order to keep wages low by minimizing the number of employees on a sales floor, some retailers use software to track customer flow and make shift staffing decisions just before a shift start. When a system like this is utilized, employees must be ready to work but call in beforehand to see if they will actually be working. If they are not needed, they are paid nothing. Obviously, if you have to block out time to work, and then that work is cancelled, you miss out on other opportunities in life, like other work or personal pursuits. Aside from this opportunity cost, you might also incur financial costs, like for child care.
So is this legal?
Although many states have similar regulations (like New York, 12 NYCRR 142-2.3), I’ll focus on Massachusetts. An important provision of our state minimum wage regulations states:
(1) Reporting Pay. When an employee who is scheduled to work three or more hours reports for duty at the time set by the employer, and that employee is not provided with the expected hours of work, the employee shall be paid for at least three hours on such day at no less than the basic minimum wage. 454 CMR 27.04 shall not apply to organizations granted status as charitable organizations under the Internal Revenue Code. 454 Code. Mass. Regs. 27.04.
The retailers will undoubtedly claim that employees subject to this practice are not “scheduled” for a shift or reporting for duty, and that they are only required to call in to see if they will work. I don’t think this is a good argument or meaningful distinction. There is no real difference between being scheduled to work and on-call scheduling. In each, you have to be ready to work, and when there is only a short duration between when you learn you are not needed and when you were planning to work, you will have already missed out on planning other work or activities. Therefore, these practices prevent an employee from being “effectively free to use his or her time for his or her own purposes,” which the same regulations also require when an employee is not on the clock.
Have you been subject to this practice at a large retailer? If so, feel free to give us a ring at 617-338-9400 for a confidential chat.