You don’t need a crystal ball to see the latest trend in employment law today: Fair work scheduling. Also called predictive scheduling, it means employers must give their employees stable, predictable hours and compensate them for last-minute changes to their work schedules. While municipal-level legislation has been on the books in California since 2014, the list of state and local laws is growing.
What is Predictive Scheduling?
Proponents of predictive scheduling say that, especially in retail and fast food establishments, “flexible” hours are billed as a plus, but, “employers often use it as a code word for being ready to work 24/7,” says Carrie Gleason of Slate.com. According to HR Dive, the goal of the fair scheduling movement is “for employees to have a work schedule that gives them the ability to plan their lives beyond work. The equity afforded under the legislation promises to provide these basic rights to employees, often at the lowest scale of the wage ladder, for whom unexpected scheduling can have a devastating impact.” Viewed another way, a reliable schedule makes for a secure and presumably more productive employee.
Most protected employees are hourly, lower-wage workers with limited job security. For example, in New York, the law does not apply to full-time employees earning 40 times the minimum wage per week.
Fair scheduling provisions can include (but are not limited to):
- Notifying employees of their schedules 14 days in advance
- Paying extra wages if an employee’s schedule changes without advance notice
- Scheduling a minimum number of hours off between shifts (which is specifically aimed at the practice of “clopening,” when the same employee closes at night and opens the following morning)
- Offering extra hours to current employees before hiring new ones
- Retaining historical scheduling records for compliance
The Impact on Businesses
Which companies are included? Most, but not all, businesses impacted are larger retail and fast food stores and some hospitality establishments. Details vary, as the International Franchise Association explains. In New York for example, covered employers are “fast food chains (including franchises) that are one of 30 or more establishments nationally [and] retail employers that sell consumer goods in NYC and have 20 or more full-time, part-time, or temporary employees.” In Seattle, “retail and food service establishments with 500 or more employees worldwide [are covered, and] to be covered, full-service restaurants must also have 40 or more locations worldwide.”
While many workers and fair-labor advocates applaud the legislation, some states are taking action to counter them. With preemptive laws that prohibit municipalities and counties from enacting predictive scheduling regulations. Check out the Economic Policy Institute’s interactive map for more on preemptive employment laws around the US.
“Scheduling proposals are especially harmful to small, independently-owned businesses that have limited staff, eliminating the give and take of the employer-employee relationship and imposing costly penalties they can’t afford. They would also have an impact on customer service – resulting in not enough employees being scheduled, longer wait times and less personal attention,” says the National Retail Federation. Indeed, some opponents of predictive scheduling complain that it is a one-size-fits-all notion that places an outsized burden on small businesses due to record keeping and schedule management requirements.
And there can be a downside to fair scheduling laws. Research by the Employment Policies Institute found that in San Francisco following enactment of predictive scheduling, employers offer fewer part-time jobs, schedule fewer employees per shift and plan to pursue self-service automated alternatives to hiring employees.
Is My Business Next?
Think you’re off the hook if your state has a preemptive law? Be warned: “Even states with preemption laws that restrict local cities and towns from passing scheduling laws may see such a law on the state level,” says CPA Practice Advisor.
If you find yourself in a city or state with scheduling restrictions, careful, realistic scheduling is the key to avoid paying penalty wages. Follow these best practices to stay in compliance:
- Review historical scheduling data
- Find gaps between actual vs. projected staffing needs at different times
- Train all staff involved in scheduling on the requirements including advanced-notice, shift-swapping and call-in restrictions
- Post scheduling requirements to educate your employees
- If you’re not already using it, consider tracking your schedule data with an automated, cloud-based scheduling system going forward. You’ll need records of hours worked, time off, shift changes and more for compliance.
No one can predict the future, especially about fair work scheduling laws, but Horizon Payroll Solutions can keep you up to date – contact us today!