Compliance updates, analysis, plus HR and payroll best practices from HR One
The New York Department of Labor has decided to drop a set of proposed new rules governing scheduling and call-in pay that would have created 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 have impacted 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. There was significant pushback from business groups in the state over the proposal, which would have required employers to provide schedules up to two weeks in advance and pay some compensatory time to employees for changes to those schedules.
What are the current rules for scheduling and “call-in” pay?
Employers are reminded that the proposed call-in pay regulations were an expansion of existing call-in pay requirements. Currently employers covered by the Miscellaneous Industries and Occupations Wage Order are still 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 before the end of their shift.
Example: Frederica owns and manages an antique store. Her two employees, Ralph and Tom, are both scheduled to work Saturday from ten a.m. to six p.m. At noon Frederica decides that it’s a slow day and she doesn’t need two employees in the store, so she tells Ralph he can go home. She is obligated to pay Ralph for four hours, as he reported to work as scheduled, even though he only actually worked for two hours.
As in the example above, 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, and provides compensation to employees who have showed up for work as expected, even if a full shift is no longer required.
How is call-in pay calculated now?
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.
From the example above, if Ralph’s regular rate of pay is $13.50 per hour, he would receive two hours of call-in pay at that rate, and two hours of call-in pay at the minimum wage.
Just because the rules were dropped this issue hasn’t gone away…
While there was push back from a number of business organizations against the proposed rules, the issue isn’t going away anytime soon. Currently there are bills in both the New York State Senate and Assembly that would, as currently drafted, cover certain sectors, including cleaning services, retail, and fast food. As of this writing both bills are currently in committee, but there is still lots of time in the current legislative session.
What should employers do?
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.
HR One will continue to monitor any changes to the current rules and will keep clients apprised.