Blogs, Hourly Workforce
As Predictive Scheduling Laws Go Mainstream, Every Retail and Quick-Service Restaurant Business Must Prepare
by Nancy Boas
Dec 21, 2019
Today, over 80 million Americans – or nearly 60 percent of the workforce – are paid on an hourly basis. Representing every age group from teenagers to retirees, hourly workers are the lifeblood across every major industry.
Over the past few years, several cities and states have enacted “predictive scheduling” laws that provide hourly employees with more predictable work schedules. These well-intentioned laws are a response to the challenges associated with “on-call” scheduling to accommodate influxes of customers at irregular times. While on-call scheduling gives business owners flexibility, hourly employees cannot always anticipate pay, establish a healthy work-life balance or determine the number of hours they are required to work each week.
Businesses have opposed these laws on the grounds that changing staffing requirements are often caused by unforeseeable events such as inclement weather, employee call-outs, and unposted community events. Nevertheless, current predictive scheduling laws on the books apply to retail, quick-service restaurant and hospitality establishments of a certain size to help employees plan their schedules and budgets. Recently, Philadelphia and Chicago became the latest cities to pass predictive scheduling laws with Fair Workweek Employment Standards Ordinances and they join the ranks with Emeryville (California), New York City, San Francisco, and Seattle, as well as the state of Oregon (see Table 1 for details). Other cities and states are considering similar legislation. See Table 1 and 2 for details on each of these local laws.
Table 1: Current Predictive Scheduling Laws
Source: HR Dive, 7/2019
As these predictive scheduling laws become more commonplace, hospitality, retail and quick-service restaurant business will be forced to rethink how they create schedules and manage an hourly workforce. Specifically, these laws create a delicate balancing act across three parameters:
- Optimize scheduling: A mistake of over-scheduling can be costly. At the same time, paying employees to work when they’re not needed can significantly impact bottom-line profits.
- Maintain compliance: The dynamic nature of an hourly workforce always incorporates frequent or unforeseen changes. As such, companies that employ an hourly workforce are challenged to both maintain compliance and handle exception scenarios and assess premium pay. These scenarios can include any unavoided last-minute schedule changes and assess premium pay. This requires monitoring end to end system from scheduling to timesheet to identify all applicable schedule changes and clopening occurrences.
- Keep employees happy: With an eye towards compliance, employers must also minimize turnover rates and ensure that employees are engaged and happy. Specifically, through self-service, employers empower their employees to swap shifts or address schedule conflicts without incurring premium wages. Finally, employers should remove friction from workforce administration by automatically keeping track of change records or detecting compliance violations.
To prepare, every company across retail, quick service restaurant and hospitality industries should plan and prepare.
Table 2: Parameters of Current Predictive Scheduling Laws
For better business results, embrace predictive scheduling
Many businesses anticipate significant challenges transitioning from legacy “on-call” scheduling practices. That said, predictive scheduling may present a silver lining by fostering a better work environment that ultimately translates into a stronger top and bottom lines for your business.
In fact, early studies indicate that these new laws have a direct correlation on employee productivity. A pilot study on predictive scheduling at several stores in San Francisco and Chicago eliminated “on-call” scheduling practices and began sharing employee schedules two weeks ahead of time. The stores with a predictive scheduling process experienced a 5% increase in productivity and a 7% increase in sales.
Invest in automated scheduling technology and tools
Today, many employers still rely upon manual paper processes or spreadsheets for employee scheduling – both highly prone to errors. In fact, only 45 percent of employers use any type of electronic labor scheduling system, making it one of the least used workforce management applications.
As companies transition to a predictive scheduling model, they should leverage automated scheduling tools that accurately forecast labor requirements and corresponding workforce schedules. Solutions like Legion incorporate machine learning capabilities to accurately anticipate “unpredictable” staffing requirements based upon a range of historical data sets including weather, previous schedules, holidays and community events.
Incorporating employee self-service functions that allow staff to message and trade shifts with each other without having to use a manager’s time to update the schedule not only ensures scheduling is compliant; it also significantly increases productivity.
Finally, predictive scheduling laws require that employers maintain detailed records that serve as proof of compliance. Thankfully, automated scheduling tools like Legion support mandated record-keeping requirements. For example, in New York, predictive scheduling laws require employers to maintain records that demonstrate the number of hours worked per week, good faith estimates of shifts, the location of the shifts as well as the date and time, the written consent of workers that have worked clopening shifts, a history of schedules and premium payments.
Are you ready?
Over the next few years, expect more cities and states to enact predictive scheduling regulations. While regulations have varied from state to state, employers across the retail, hospitality and quick service restaurant industries should prepare and replace manual and error-prone manual scheduling processes based upon “on-call” models. To ensure accuracy and compliance, employers should use automated scheduling tools and technologies like Legion that also use leverage machine learning to better anticipate future staffing requirements while demonstrating proof of compliance.
To learn more how Legion can help your business support predictive scheduling requirements, read this solution brief.