One of the most closely watched issues today among retail and hospitality employers is “predictive scheduling,” or as opponents call it, “restrictive scheduling.” Predictive scheduling has become the new cause célèbre among labor activists around the country who are pushing legislation at the federal, state, and local levels to restrict the ability of retailers and hospitality employers to use “on call” scheduling (i.e., requiring employees to call or text to learn on short notice whether they are needed for work). Predictive scheduling activists argue that on-call scheduling practices unreasonably interfere with the lives of workers who plan to work and then find out at the last minute that they are not needed. Retail and hospitality employers and industry groups argue that predictive scheduling measures would add unnecessary burdens on their businesses, remove their ability to be flexible in running their businesses, increase costs by requiring them to pay employees for cancelled shifts, and unreasonably interfere in their relationships with their employees—many of whom went into retail for the scheduling flexibility. 

As we approach the busy holiday season, this issue will undoubtedly be on the minds of employers and employees alike as retail and hospitality employers seek to ensure that they have sufficient coverage to handle the ebb and flow of holiday season traffic. This post provides a primer for retail and hospitality employers on what they need to know about this important issue, and how they can ensure they do not run afoul of existing law.

Background Information on the Issue

In July 2014, Congressional Democrats introduced the Schedules That Work Act (H.R. 5159) in the U.S. House of Representatives, and a similar version of the bill in the U.S. Senate. Then, in November 2014, the predictive scheduling movement gained momentum when the City and County of San Francisco’s Board of Supervisors unanimously approved (with one member absent) two ordinances referred to as the Retail Workers’ Bill of Rights. The expansive San Francisco ordinance requires, among other things, that employers pay employees for cancelled on-call shifts, provide notice to employees of their biweekly schedules, give new workers good faith written estimates of their expected hours and schedules, and uphold the requirement that employers offer extra hours to current part-time employees before hiring new employees or using staffing agency employees.  

While San Francisco retailers are still struggling to get their arms around the requirements of the San Francisco ordinance, predictive scheduling activists are pushing to replicate the San Francisco model in other states and cities.According to the National Retail Federation (NRF), which is following this issue closely on behalf of its retail and hospitality members, predictive scheduling initiatives are underway in 12 states and a number of localities around the country. The proposals are similar to the ordinance passed in San Francisco and, according to NRF, “include four common provisions: advance posting of schedules; employer penalties for unexpected schedule changes; burdensome recordkeeping requirements; and prohibitions on employers from requiring employees to find replacements for scheduled shifts if an employee is unable to work.” NRF created the Restrictive Scheduling Toolkit for its members to reference when speaking with legislators and the media about their opposition to efforts to advance this issue.

In April 2015, New York State Attorney General Eric T. Schneiderman garnered national news headlines when he launched an inquiry into the on-call scheduling practices of a slew of large national retailers in New York, expressing public concern about the impact of such practices on workers and raising questions about the possible illegality of such practices under existing New York law requiring “reporting pay” for employees who report to work but are not required to perform any work due to things like the closure of the business because of inclement weather. As discussed below, New York is one of several states that have such reporting pay laws.

In the wake of the New York State Attorney General’s inquiry, many large retailers recently announced that they are ending on-call scheduling at all of their stores across the nation. Plaintiffs’ lawyers have entered the fray as well, filing proposed class actions in California claiming that on-call scheduling violates state law and asserting claims for failure to pay reporting time pay, failure to pay all wages earned at termination, failure to provide accurate wage statements, and unfair business practices. The plaintiffs in these lawsuits are asking for the payment of unpaid wages, as well as compensatory and economic damages and attorneys’ fees and costs, among other claims for relief.

Tips for Retail and Hospitality Employers

The predictive scheduling movement presents both practical and legal challenges to retail and hospitality employers. Since the first step to solving a problem is to understand it, retail and hospitality employers first should educate themselves about the current state of the predictive scheduling movement in the locations where they do business. According to a fact sheet published by the National Women’s Law Center in September 2015, predictive scheduling legislation is now pending in the following states: California, Connecticut, Illinois, Indiana, Maine, Maryland, Massachusetts, Minnesota, New York, and Oregon. Retail and hospitality employers that want to consider taking a public stand against the proposed legislation in some or all of the localities in which they do business can find helpful resources for doing so in the Restrictive Scheduling Toolkit that NRF has created for this very purpose.

Second, it is important for retail and hospitality employers to recognize that predictive scheduling can become an employee relations issue and could be used by labor activists as a rallying cry for union organizing. It is likely for this reason that many national retailers chose to eliminate the practice of on-call scheduling nationwide in the wake of the negative publicity the New York State Attorney General spurred as a result of his inquiries last spring. While retail and hospitality employers have not been the primary targets of organized labor’s efforts to hold and win “ambush” elections,they certainly have seen their fair share of these campaigns. Moreover, groups like the National Women’s Law Center have published guides instructing unions and employees on how to achieve scheduling “fairness” through collective bargaining agreements and union organizing. Therefore, retail and hospitality employers may want to reconsider their current on-call scheduling practices—as well as the content of their messages to employees about these practices—and determine whether any modifications to those practices can and should be made before they become the source of friction between employees and management.

Third, retail and hospitality employers should ensure that they are complying with the various reporting pay laws that are already in existence in many states, particularly in the Northeast.  These laws are designed to ensure that employees receive compensation when they show up ready to work, but no work is required of them due to lack of work or a business closure (e.g., due to a snowstorm or other inclement weather event). These laws have varying requirements in terms of the number of scheduled hours required to trigger reporting pay obligations, the industries to which they are applicable, the circumstances triggering the obligation to pay employees, and the amount and rate of pay owed.

While a full summary of the laws and all the exceptions to them are beyond the scope of this post, below is a quick summary of the states that have such reporting pay laws on the books and the pay that is required:

  • California—two to four hours of pay
  • Connecticut—two to four hours of pay
  • District of Columbia—one to four hours of pay
  • Massachusetts—three hours of pay
  • New Hampshire—two hours of pay
  • New Jersey—one hour of pay
  • New York—three to eight hours of pay
  • Oregon—one hour to half day of pay (minors only)
  • Rhode Island—three hours of pay

In order to ensure compliance with existing reporting pay laws, retail and hospitality employers should consider establishing clear, written protocols for notifying employees of schedule changes, business closures, and delayed openings. Management training is also recommended.

Diane M. Saunders is a shareholder in the Boston office of Ogletree Deakins and is the co-chair of the firm’s Retail Practice Group.

This article first appeared on JD Supra.