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Provided you let technology handle the rest.

Know the basic principles of hourly labor compliance and use technology to manage the many different laws.

Predictable scheduling laws are there for a good purpose: they ensure companies and their hourly employees have a fair relationship. While labor regulations address many of the same issues, the details vary widely between cities and states. The patchwork of laws makes labor law compliance a painful and costly matter for businesses creating work schedules manually.

Building schedules which meet the needs of the business, employee preferences, and comply with all applicable laws is incredibly complicated. Fortunately there are just seven broad concepts you must understand before outsourcing the tedious matching process to Artificial Intelligence (AI) technology, which is purpose-built to solve complex matching problems. In fact, the role of AI in how work is conceived and managed is one of the hottest subjects right now, a couple of months ago the Wall Street Journal and Deloitte published an insightful article on “reimagining the workforce,” as AI goes mainstream.

The following seven areas of compliance are adapted from actual regulations in New York City, San Francisco, Seattle and the State of Oregon.

1. Advance notice of work schedules

Notice laws are designed to give employees enough time to plan their lives around their work schedules, while ideally retaining some flexibility for companies to manage their businesses. Nearly all recent scheduling laws regulate this, and it is one of the areas where there is some consistency in the details. For example, while New York CitySeattle and San Francisco all require a 14-day advance notice in schedules for food and beverage businesses, the State of Oregon requires 7 days (which will extend to 14 days starting on July 1, 2020).

2. Schedule change premium

Schedule changes are sometimes unavoidable, but you should fully consider last minute changes as schedule change penalties accumulate quickly.  The devil, as always, is in the details regarding which changes are allowed, and how much premium pay may apply. Several cities have regulations defining different premium pay amounts based upon the time when schedule changes are made, and the type and amount of change. For example: NYC provides a full table that lists the premium you must pay depending on whether last minute notice is given fourteen days, seven days, or twenty-four hours in advance. Seattle requires that “employer must provide an additional hour of pay, plus wages earned” for additional hours, and “employer must pay for half of the hours not worked” for subtracted hours.

The good news is that voluntarily requested changes from employees do not trigger premium pay. You can enable employees to voluntarily accept additional hours and request schedule changes through technology as an effective way to managing schedule changes. Furthermore, the state of Oregon has a provision called the voluntary standby list, whereby employees can request to be included on a priority standby list to receive additional hours without premium pay.

3. Offering shifts to current employees

Another recently enacted law requires you to offer hours to your current employees first before offering the shift to contractors or new employees. This is designed to give current employees the opportunity to work more hours. Technology enables employers to comply with this law and can ensure that your employees in NYC and Seattle have the option to claim open shifts for up to 3 days before they are offered out to others and that your employees who volunteer for more hours in Oregon have priority to receive those additional hours.

4. Good faith estimate of schedule

Good faith estimates aim to provide a longer term projection on days, times, hours, and locations that each employee can expect to work. NYC, Seattle and the State of Oregon require that you provide good faith estimate of work schedules at the time of hiring and updates when estimates change. Furthermore, you should ensure that your employees have the right to input into the schedule. The ability to effectively capture employees’ availability and factor their work preferences into scheduling is a major benefit of automating scheduling with software.

5. On call requirements and costs

Arguably, on call shifts provide the least predictability for hourly employee, as employees need to wait for the call to find out whether they are needed for work each day. A common concern is ensuring your hourly employees are not on call 24 hours a day. This is important to keep your labor force sane, but varies wildly by city and by state. Some cities such as NYC have started to ban on call shifts, and other cities like San Francisco indicate the employer “must pay for on-call shifts when the employee is not called into work,” which can be quite costly.

6. Right to rest

Several regulations focus on this area, aiming to ensure your employees get proper rest. This includes receiving rest and meal breaks within a shift, receiving sufficient break between consecutive closing and opening shifts (clopening is the common term), and receiving overtime pay for working beyond weekly and, in some places, even daily limits. This is probably one that impacts your labor costs the most. Nearly all jurisdictions have regulations regarding overtime and breaks. The clopening requirement is relatively new, but is quickly being adopted in recent scheduling laws.

The specifics vary depending on the jurisdictions, requiring part or all of the above with specific limits on shift and break times, and different payroll premiums that apply in case of in-compliance. For example, NYC requires $100 premium for clopening shifts that are separated by less than 11 hours; Seattle requires a premium of time-and-a-half for hours worked between closing and opening shifts that are separated by less than 10 hours.

7. Minors

No one wants publicity from Minors scheduling violations. Your managers should stay on top of the Minor scheduling rules if you have team members under 18-years old.  Minors’ regulations vary widely by location and specify not only number of hours Minors can work, but also which hours within a day, on weekdays vs. weekends, and whether school is in session. There may also be different meal and rest break policies that apply to Minors, and vary by age groups.

 

If you stay aware of these seven common elements of compliance, you will know what you can achieve, and will save a lot of money in premium pay and lawsuits, as most of these violations are unintentional.  Understanding these elements also gives you the ability to see where the levers are in order to stay flexible, respect your employees and comply with the law. Ideally this is all you need, because the actual matching of all these different regulations with schedules is a task perfectly suited for AI.

At Legion, our algorithms are coded with all the different details on all local regulations on these seven areas, so that you can operate with the confidence that technology is taking care of matching in a compliant manner. while your managers spend their time managing.

Click here to see specific examples how Legion Demand-Ready Labor Platform’s AI takes care of complying so your managers can focus on growing the business.

Ou-Dan Peng runs Product Management at Legion. She's an expert in product specs and design, having been a director of product at Oracle for over a decade.