Compliance updates, analysis, plus HR and payroll best practices from HR One
New York has issued a set of proposed new rules governing scheduling and call-in pay that could create headaches for businesses that sometimes find they need to add someone to the schedule at the last minute, or send someone home early when things slow down. The proposed changes would impact the current Miscellaneous Industries and Occupations Wage Order, the rules that govern everything from minimum wage, meal periods, and overtime for almost every employer in the state. Right now the regulations are in a comment period until January 11, 2019. Comments can be submitted to the NY Department of Labor at email@example.com.
What are the current rules for “call-in” pay?
There are times where sales or production may be slower than was originally anticipated when a work schedule was created, so an employer decides that circumstances don’t require them to have employees stay at work for a full shift. Under these rules there is flexibility for the employer to adapt their staffing to the needs of the business, but also provides compensation to employees who have showed up for work as expected, even if a full shift is no longer required.
Currently employers covered by the Miscellaneous Industries and Occupations Wage Order are required to pay an employee four hours at the basic minimum wage OR for the hours of a scheduled shift (whichever amount is lower) if they report to work as scheduled and are sent home early. Call in pay is considered satisfied if the employee has earned at least 4x the minimum wage in the hours they did work before being sent home.
Examples: An employee who makes $13/hr and is sent home after 2 hours, has earned $26. In this case they would only need to be paid an additional $18.40. An employee who makes $25/hr and sent home after 2 hours, has earned $50 which is MORE than four hours at minimum wage and is owed nothing additional. *
What are the changes to call-in pay and scheduling rules?
The new rules would expand the situations where call-in pay is required to include the above situation (reporting to work), but would also include:
How is call-in pay calculated?
Call-in pay is calculated one of two different ways. The first is for actual attendance, which should be calculated at the employee’s regular or overtime rate (whichever is applicable) minus any allowances. The second is the basic minimum hourly rate. Any call-in pay at the basic minimum hourly rate should not be included when calculating overtime.
Are there exceptions?
What should employers be doing now to prepare for the very real possibility of new rules?
Employers should look at their current scheduling practices. If possible, try and go back through previous years and months and figure out the cycles of the business. Are there times that are busier where you can put people on the schedule with more notice? Times when your business slows down and rather than scheduling three employees and sending one home, you can get away with scheduling just two employees? There will always be unexpected times in the life cycle of a business where the organization may find itself over or understaffed, but planning can help minimize the time when a business needs to pay their employees for hours that aren’t actually worked.