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The guys close out the week by talking about the legal concerns of on-call employees in the retail industry and how states are working on legislature in support of these employees.

Full Podcast Transcript

NASIR: Welcome to our podcast where we cover business in the news and add our legal twist to that news. My name is Nasir Pasha.

MATT: And I’m Matt Staub.

NASIR: And welcome to the world of the law and business.

MATT: The world where we talk about one topic per episode, more or less.

NASIR: That’s right. Only Mondays and Wednesdays now though, right? This is our last episode for the week so make sure you guys pace yourselves.

MATT: So, will this be…? Oh, no, we’re well before the 4th of July weekend. I’m getting way ahead of myself.

NASIR: I know. It’s still June, man. It’s like the middle of June.

MATT: We’re on the second, third of June as we’re recording this so it wasn’t incredibly far off.

NASIR: Today’s not the second or third of June.

MATT: The second one-third of June.

NASIR: Oh, second… it’s going to be the second third of the month.

MATT: Yes.

NASIR: I know how everyone kind of refers to months and to split it up into thirds – that’s one way to do it. I don’t think I’ve ever heard anyone do that but okay. No, actually, we’re going to be – let’s see – the third sixth of the month, I think, actually.

MATT: Yeah, that’s correct. Okay. First time getting something math-related correct on the show.

NASIR: Or actually what’s better is I think this episode’s coming out on the 17th 30th of the month.

MATT: All right. I’m going to move on to the topic here which I wasn’t even really aware this was going on – probably because I don’t work in retail – but we’ve all heard of on-call shifts, especially for doctors or surgeons – I guess surgeons are doctors – nurses.

NASIR: Lawyers – just start naming professions.

MATT: Police officers, maybe.

NASIR: Firemen.

MATT: Firemen, for sure, yes.

NASIR: Or women.

MATT: But, in retail, there’s a thing that’s apparently legal – or for now somewhat legal. It’s on-call workers. Basically, it’d be someone – there’s a whole slew of different stores that are being accused of this but we’ll just take the first one I see here. So, J. Crew, for example, has a list of the employees they have and they set their schedule for the week and maybe I get my shifts and I’m going to definitely work on Tuesday and Thursday but I’m on-call for Monday, Wednesday, Friday. What that means is I have to call the store close to an hour before – I know I saw two hours so we’ll say at least two hours before – to find out if I’m working that day because I’m scheduled to work from 4:00 to 9:00 but I don’t know until I call in at 2:00 pm which, as you can probably think, this causes a lot of problems for the employees because they can’t really schedule anything else during those times which, going back to the doctors and different professions, yeah, those people get compensated higher based on reasons like that. But, for the people in these retails jobs that might be making minimum wage or a little bit more, this is a huge issue because you can’t work another job. Maybe you want to go to school part-time, you can’t do that because you might have to work on a Wednesday night and when you have class. So, I could see how this would become a huge problem if I was in this position. Were you aware this was so rampant in the retail industry?

NASIR: I mean, on one hand, I understood that you could be called in last minute, but this whole concept of you have to actually call in. Like, they described one worker who worked at Bath & Body Works, she was a part-time worker but she would call literally an hour before. This is what she says. She calls an hour before, she lives 25 to 30 minutes away, and then they would put her on hold where she would have to wait to call the store several times before someone would pick up and then she says she would be looking at her watch, starting to sweat because she might be late if she gets called in because she lives 25 to 30 minutes away. So, this concept of whether she’s entitled to reporting pay, there’s an attorney general investigation I think out of New York that’s kind of investigating this and parallel there’s a lawsuit against Victoria’s Secret out of California.

MATT: It’s not so secret anymore. But, going back to my example, I’m supposed to work on Tuesday from 4:00 to 9:00. I show up and they say, “Oh, actually, you don’t have to work. You can go home.”

NASIR: “We’re slow.”

MATT: Yeah, you can still get compensated for it. I think, at least, was it half of their scheduled shift? I guess depending on how many hours they’re scheduled.

NASIR: Basically, at least half of what you’ve been scheduled for. So, if you were scheduled for eight hours, then you get paid for four hours. But then, there’s a minimum too and I think it’s two hours. So, even if you’ve been scheduled for less than four hours, you would still get paid two hours, and this is a California-specific law.

MATT: Well, this is my example, I’m in California, that’s why I’m giving that example.

NASIR: Oh, that’s true.

MATT: So, now they’re saying – well, their employers are saying – you know, the people that are calling in an hour before maybe have to get in their car and kind of almost be on their way. “They’re not reporting to work because they’re not at work so we don’t have to compensate them. They just have to wait around and deal with it.” Of course, the attorneys for these employees that are raising these concerns are saying, “Well, they’re reporting to work. They’re on the schedule, blah blah blah.” So, we’ll see. That’s kind of step one. We’ll see how that plays out because I think I even read in one of these rundowns that it’s kind of the first case of its kind, isn’t it? This hasn’t been brought to the forefront?

NASIR: At least in California because what happened was this was a lawsuit in federal court in California and they were applying California law which I know can get confusing but, basically, the district court said they ruled in favor of Victoria’s Secret saying there’s no case that says that reporting pay applies to an employee that doesn’t actually physically show up for work. So, what the judge said is, “Okay, we can’t find anything, but I’m going to allow you guys to make an appeal to the Ninth Circuit to see if you can make that argument there,” which is very typical because, you know, as attorneys, we deal with this all the time. When you’re making an argument to a court, it’s very seldom that a judge is going to accept an argument that has never been made before. Even if you may be correct, for a lower level court to create precedent and therefore a new law that other people are going to depend upon, lower court judges are reluctant to do so. So, even if the plaintiffs – in this case, the employees – had a good argument, it’s not surprising that a court would grant it. That’s why they kicked it up to the Ninth Circuit and that’s why we’re here. Now, the question is the Ninth Circuit’s going to look at the law and what’s the intention of the law. What do you think? Forget about the language of the actual statute – you know, reporting pay and so forth. From a conceptual perspective or fairness, what do you think? Do these workers deserve to get paid a couple of hours for being on this on-call program?

MATT: Yeah, I think it should be similar to what the laws are for if they show up and get sent home. I mean, we’ve said this so many times. It’s all about building the culture within the businesses and this is really putting a sour taste in these on-call employees’ mouths because, like I said, they can’t do anything. I mean, they can’t schedule anything else and, you know, maybe it’s great if they don’t have to work that day but, on the flipside, they’re not getting paid. I think they should definitely be compensated similar to what it is for them actually reporting, physically reporting to work. But there’s hope for some of these employees – at least in some areas and one of which is San Francisco.

NASIR: In San Francisco, they passed what’s called the retail workers’ bill of rights and it was passed back in January. It doesn’t actually go into effect until July 5th 2015 and they have a slew of different restrictions that they have on the employers and they do have this on-call shift pay. Basically, they say, if an employee is required to be on-call but is not called into work, the employer must provide the employee with two hours of pay if the on-call shift lasted for four hours or less. But whether this on-call definition applies to this particular case from Victoria’s Secret, I’m not sure I’m clear on that. going back really quick on the California case, reporting time pay is supposed to be some kind of partial compensation for employees who report to work expecting to work and the idea is that, “Look, I came all the way here, I’m pretty much ready to go, but now you’re sending me home. I should get compensated for that because there’s some level of work that was to be formed. There was some kind of detrimental reliance so to speak from a legal perspective. But when a person is calling in, I don’t know if they have an expectation to work. They’re calling in to figure out what it is. I think the unfairness part is that it’s such a short period of time before work may be scheduled, it kind of creates a little bit of injustice. And, by the way, the reason they do that is because these retail stores like Victoria’s Secret and Bath & Body Works because they keep track on such a minute level that they know how many retail customers that they plan on having that day and, based upon different statistics and prediction and so forth which is why they are waiting till the last minute to determine whether to bring on an employee because this on a national level because, if they can bring in employees at the right time and not have extra employees there, they save a ton of money.

MATT: Yeah, these bigger companies, these nationwide retail chains or worldwide retail chains have these sophisticated customer statistics that tell them X amount of customers come in on this day at this time so we need two people work instead of three.

NASIR: I think literally a computer is telling them when they need more people.

MATT: Yeah. I mean, at the end of the day, I get numbers add up but, if you’re paying these people minimum wage and you have one person that you’re scheduled to work and they’re on-call – even if they’re making let’s say $10.00 a hour – it’s not that much money. Like I said, I know it adds up but it still is not that much money or additional money to the employer.

NASIR: They’re literally trying to have the minimum number of people there that they can to still satisfy their customers and their customer service numbers, right? But they don’t want to be understaffed either so it’s a fine line. I mean, on one hand, yeah, it does add up. But the hour before thing? It bugs me. In other words, their computers need to be more sophisticated. They need to provide a little bit more notice than hours, you know? At least a day. What do you think? A day? 24 hours?

MATT: The thing with those instances too, a lot of them, the burden was on the employee to call in to find out if they were working. So, not only was it an hour or two hours before their scheduled on-call shift, they had to take the initiative and actually call the employer. It’s not like the employer says, “Oh, it’s 3:00, I better call so and so to let them know if they have to work at 5:00.” But the employers are making it seem like the burden was on them to have to deal with it but that’s completely backwards of how it should really be doing.

NASIR: Let me ask you a different question. I think our position would be different if this was a smaller employer though, right? I mean, when you’re talking about a Victoria’s Secret or a Bath & Body Works, you know, the size of employer matters, no?

MATT: Yeah. Well, that’s definitely a difference. I don’t know because, at the same time, I think with those smaller companies, it’s even more important to have employees that like you if you’re the employer. With those bigger companies, at the end of the day, you’re probably looking, it’s just turnover. With the smaller ones where you only have a handful of people that might be working for you because you have to go through training and all these other things, it’s so important to keep those people happy and keep them working for you because the cost is just going to be much higher as opposed to the turntable of a bigger company.

NASIR: And I think maybe, if it’s on occasion too. Frankly, I mean, Victoria’s Secret and these stores, they’ve been in business for years. To me, if it’s a pizza shop, it’s like, “Okay. Well, it’s Super Bowl Sunday. Do you mind calling in an hour before to see how busy we are. We know we’re going to be really busy but it’s kind of hard to tell,” as opposed to just another Saturday or Sunday night, you know? I think there’s so much predictability in the retail side that I’m surprised that they even have to resort to this kind of method.

MATT: Yeah, I would think retail sales, it should be pretty obvious. There’s the holiday season that you probably have more people. Well, the end of your holiday. But any holiday where people have off work, there’s sales built around that or any time where there’s big general sales, it should be pretty straightforward.

NASIR: Yeah. When I used to own about a dozen Victoria’s Secrets and Bath & Body Works, I just scheduled for the five years ahead of time.

MATT: Five years ahead of time?

NASIR: Yeah, that’s how I used to do it. Things have changed.

MATT: What percent of employees for those companies do you think even work for five years?

NASIR: Probably about 150 percent.

MATT: 150 percent? I was going to guess less than one percent but…

NASIR: Yeah, five years? Yeah, that’s a tough one. One percent seems a little low but I would say five – five percent.

MATT: You’ve got to factor in the people too that show up and work for three days and quit. That counts.

NASIR: That does count.

MATT: The pizza place that I always talk about, when I first started working, they brought on this girl pretty soon after I started working maybe a few weeks and I think she worked for three days or something. She took home a ton of pizza on the first, like, you could take home everything that was leftover so it wasn’t a problem but I just remember she took home so much stuff and I was like, “What are you even going to do with all this pizza?” It doesn’t even make sense.

NASIR: Well, that means she made out. She was stocking for the year.

MATT: I don’t know if she even got paid. I don’t remember her ever coming back for her pay check. Who knows?

NASIR: Ah, let’s put her on blast. What was her name?

MATT: No idea. I vaguely remember what she looked like. I probably couldn’t even pick her out of a line-up.

NASIR: Well, that’s disappointing.

MATT: Yeah. Oh, well.

NASIR: Equally disappointing as that, we have to end our episode.

MATT: Yeah.

NASIR: I’m a little sad.

MATT: We’ll be back next week though.

NASIR: Well, thanks for joining us everyone and a happy 17th 30th of the month!

MATT: All right. Keep it sound and keep it smart.

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Legally Sound | Smart Business covers the top business stories with a legal twist. Hosted by attorneys Nasir N. Pasha and Matt Staub of Pasha Law, Legally Sound | Smart Business is a podcast geared towards small business owners.

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