Are Scheduling Bills Like D.C.'s Helpful or Meddlesome?

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By Jon Steingart

Jan. 12 — The District of Columbia Council scheduled a hearing for Jan. 13 on a bill that would require stores and restaurants to tell employees what their work schedules will be several weeks in advance and require employers to compensate employees for last-minute schedule changes.

“This movement is under way across this country,” lead sponsor Vincent Orange Jr. (D-At Large) said when he introduced the measure Dec. 5. “San Francisco recently passed regulations to address this issue and bills have been introduced in seven states.”

The Hours and Scheduling Stability Act of 2015 wouldn't apply to all stores and restaurants, but it would have a big impact, Orange told Bloomberg BNA Dec. 17. If passed, the measure “will assist tremendously with providing [the district's] workforce and their families with certainty,” the councilmember said.

The bill would require employers to tell workers what their schedules will be at least three weeks in advance. A change in schedule less than three weeks out would require the employer to pay an extra hour of wages. Less than 24 hours' notice would require four hours of wages.

Orange's bill would cover any D.C. franchisee of a restaurant chain with at least 20 locations nationwide or a retail store chain with at least five.

Unpredictability Affects Planning, Benefits Eligibility

It's hard enough for families to balance work and personal life, Orange said when he introduced the bill. “Having a schedule you can count on leads to a better work environment and better harmony in scheduling family obligations.”

Liz Ben-Ishai, senior policy analyst at the Center for Law and Social Policy, which supports legislation requiring employers to provide workers with advance notice of schedules, told California lawmakers in March of 2015 that volatile schedules affect workers’ ability to arrange child care. Such volatility also interferes with their ability to hold second jobs and pursue education or training, she said.

There's another problem with unpredictable schedules, Ben-Ishai told Bloomberg BNA Dec. 22. Many public assistance programs ask participants to estimate their income or number of hours they will work, she said. “Because they have these erratic schedules or insufficient hours they can't predict how much they'll make,” she said.

Utah is “an example of a good approach,” she told Bloomberg BNA. State eligibility assessors use “professional judgment” to draw on multiple sources of information, including paychecks and conversations with employers regarding anticipated hours and overtime, to determine an applicant's’ eligibility, Ben-Ishai wrote in a policy brief. Utah encourages workers to follow up on information applicants provide that may not reflect their current eligibility, such as out-of-date wage information

Ben-Ishai also suggested a different time frame for evaluating applicants’ incomes and work hours. She pointed to the Child Care and Development Block Grant, which “requires a longer authorization period” and “accounts for fluctuation in people's hours.” This federally funded program allows states to determine eligibility “over a period of 12 months to provide a more realistic picture,” she said.

Bills Introduced Around the Country

The Washington, D.C., bill is one of several under consideration in state and local legislatures, as well as on the federal level. Within the past two years, there have been similar proposals in 13 other cities and states, plus one on the federal level.

San Francisco has been the first and, so far, only jurisdiction to pass a predictable scheduling law. It passed Nov. 25, 2014, by a 10-0 vote of the 11-member Board of Supervisors and became law without the signature of Mayor Ed Lee (D). Lee said he was “concerned about large numbers of impacted merchants who said there was little meaningful discussion” in the drafting of the law (243 DLR C-1, 12/18/14).

Lizzy Simmons, the National Retail Federation's senior director, government relations, told Bloomberg BNA Dec. 30 that the San Francisco law has a “carve-out that allows unions and their collective bargaining agreements to waive out” of its requirements. She said she's concerned that allowing employees to contractually waive the law's requirements grants outsize influence to labor organizations “since a lot of the unions have been behind” efforts to pass predictable scheduling laws.

The San Francisco law actually “takes away and impedes on employee flexibility,” Simmons said. Retail managers and employees should work together to come up with schedules that can accommodate individual needs, she said. “A one-size-fits-all government mandate” makes that harder to accomplish, she said.

Part of the problem with scheduling bills is that there's little guidance on how to implement them, said Robin Winchell Roberts, the federation's senior director, media relations. For example, the San Francisco law exempts employee-requested changes from triggering schedule change compensation, which Roberts calls “penalty pay.” The key factor in determining when an employer must pay schedule change compensation is who requests the change, Roberts said. It isn't clear whether it is due when a retailer requires an employee who can't work a scheduled shift to find a co-worker to work the shift in her place, Roberts said.

The compensation might also be triggered if business is better than expected, Simmons said. For example, a store might want to extend a sale that's going well. If the store wants to staff up to respond to the additional customer demand, it might incur unexpected expenses on account of employees who weren't scheduled, she told Bloomberg BNA. “I don't think you can just say after the fact sales made up for that,” she said when asked whether the unexpected increase in revenue would offset the unexpected increase in expenses.

Flexibility Essential, Industry Group Says

“Flexibility is a trademark of the restaurant industry,” Christin Fernandez, director of media relations and public affairs at the National Restaurant Association, told Bloomberg BNA by e-mail Dec. 23. Businesses operate around the clock “with business models unique to each restaurant,” she said.

Starbucks is an example of a business that pursued its own scheduling model. The company announced in August 2014 that it would voluntarily change its scheduling practices. It said it would provide employees with schedules a week in advance. It also said it would prohibit scheduling employees to close a store one night and return a few hours later to open the next morning (157 DLR A-6, 8/14/14).

But 11 months later, a report by the Center for Popular Democracy, an organization that describes itself as advocating for a “pro-worker” agenda, concluded that the company hasn’t kept its promises. The report, “The Grind: Striving for Scheduling Fairness at Starbucks,” drew on comments from a survey of employees who say back-to-back closing and opening shifts continue. Reached for comment Dec. 22, Brent Gow, global director for payroll at Starbucks, told Bloomberg BNA he couldn’t speak on the record because the company is still working on the issue.

Reporting Time Pay Laws Exist in Some States

Predictable scheduling laws don't take into account that “some of the people that go into these jobs to begin with do it for exactly the flexibility that's being challenged here,” said Diane Saunders, a shareholder in the Boston office of Ogletree, Deakins, Nash, Smoak & Stewart P.C. who advises employers as co-chair of the firm's Retail Practice Group.

Saunders advises her clients to ensure that they comply with reporting time laws that are already on the books. In Washington, D.C., and eight states, employees are guaranteed a minimum number of hours of pay if they report to work but are sent home because business is unexpectedly slow, she wrote in a November blog post.

New York Attorney General Eric Schneiderman's labor bureau chief, Terri Gerstein, wrote to 13 retailers in April 2015 as part of a review of on-call scheduling. In the letters, Gerstein reminded the companies that New York state law requires that an employee who reports for work must be paid four hours, or the number of hours of a regularly scheduled shift if that is less than four hours.

Gerstein told the retailers the attorney general's office had received reports that an increasing number of employers require their employees to call in “just a few hours in advance, or the night before.” Threatening enforcement action over this practice goes beyond what New York law says, said Jim Evans, a partner in Alston & Bird LLP's labor and employment practice who represents employers.

Whether the proposals become law, employers should focus on “the human aspect” of predictability in scheduling, he said. Employers that voluntarily change their practices and lawmakers who draft predictable scheduling laws should consider the “harsh economic consequences” of last-minute shift cancellations, he said.

New Application for Existing Laws

The New York attorney general's letters were sent to companies with household names such as Gap Inc., J. Crew and Burlington Coat Factory. One recipient was Abercrombie & Fitch Co., which is facing a class action in California over its use of on-call scheduling.

In the absence of laws requiring pay for on-call shifts, one team of lawyers is attempting to use wage and hour laws that are already on the books to help their clients. Hallie Von Rock and Carey James, of Aiman-Smith & Marcy, filed a lawsuit in December against Abercrombie & Fitch on behalf of C’endan Claiborne and a class they estimate includes between 15,000 and 65,000 members in three states.

In the lawsuit, Von Rock and James allege that the company's practice of requiring California employees to call in one hour before their scheduled start time in order to find out whether they're required to work the shift should be considered reporting to work. When an employee calls and is told to stay home, the employee is entitled to a few hours of pay, Von Rock and James told Bloomberg BNA.

Under wage and hour laws already on the books, Abercrombie should pay its employees for the time they spend calling in, Rock and James said. The calls last between two and 20 minutes, which adds up to several hours of unpaid wages per month, they said.

Von Rock and James contend that employees—who aren't paid for the time they spend on these phone calls—are reporting for work when they make these calls. “Even though they're not physically showing up” at the store, the phone call is the beginning of a work shift, Von Rock said. Abercrombie, which is represented by Morgan Lewis & Bockius LLP and Vorys Sater Seymour and Pease LLP, denies the lawsuit’s allegations.

James said the law “is undeveloped in California” as to what qualifies as reporting for work under the reporting time law. “To me, report is a straightforward word and it could just as easily mean call,” he said.

Von Rock expressed concern about a power imbalance between employers and employees. Predictable scheduling laws attempt to level the unequal bargaining power, she said.

Simmons, with the National Retail Federation, views it differently. These laws insert friction into the employer-employee relationship, she told Bloomberg BNA. “These bills punish job creators,” the federation says in its restrictive scheduling toolkit. A better approach would be to continue to allow the market to strike a balance, Simmons said.

Common Ground

One thing on which supporters and opponents of predictable scheduling laws agree is that it's too soon to tell what kind of impact San Francisco's law is having. Ben-Ishai, the policy analyst, and Simmons, of the National Retail Federation, told Bloomberg BNA it is too early to have meaningful research.

Evans, the employer-side attorney, offered advice on balancing employers' need for flexibility with workers' need for predictability. “Focus on the human aspect of it,” he said. “I represent large corporations, many of which are very focused on the human aspect of it. I think that the human aspect of the legislation and the impact of the practices can't be overemphasized.”

“It's just not fair to subject people to that last minute change and kind of harsh economic consequences,” he added. “When you measure who has the ability to absorb the impact of a last minute change in schedule, the answer's kind of obvious.”

To contact the reporter on this story: Jon Steingart in Washington at jsteingart@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com