Oregon has become the first state to adopt a “predictive scheduling” measure, requiring employers to give employees a set work schedule a week in advance or face penalties. Also known as a “fair workweek” law, Oregon’s governor signed the bill earlier this month. It takes effect July 1, 2018, with additional provisions taking effect through 2020.
This labor issue is gaining steam across the country, with similar laws passed in the cities of New York, Seattle and San Francisco. Employers across the country should anticipate predictive scheduling coming their way, and may look to Oregon and other jurisdictions to get a sense of the potential impact.
What the Oregon law requires
Senate Bill 828 requires Oregon employers to provide employees with copies of written work schedules at least seven days in advance, which increases to 14 days on July 1, 2020. If the employer changes the schedule outside of the notice period, employers must give affected employees additional compensation. While this will cause employers to lose some flexibility around scheduling practices, employees gain predictability.
The provision for employers to provide additional compensation, also known as “predictability pay,” is required in different circumstances.
• First, employers must pay one additional hour of pay at the employee’s regular rate if the employer adds more than 30 minutes of work to an employee’s shift; changes the date, start time, or end time of a shift without affecting total hours worked; or schedules the employee for an additional shift (including on-call shifts).
• Second, employers must pay an additional one-half times the employee’s regular rate for each scheduled hour that the employee does not work if the employer subtracts hours from a shift; changes the date, start time, or end time of a shift, resulting in a loss of work hours; cancels a shift; or does not ask the employee to perform work while on call.
• Lastly, employers cannot require employees to report back to work fewer than 10 hours after ending the previous shift, unless the employee requests the shift or consents, in which case the employer must pay one-and-one-half times the regular rate of pay.
Also, employers must be aware that even if predictability pay is provided, employees cannot be forced to work a shift that was not previously scheduled.
Avoiding predictability pay
The measure does afford employers several ways to avoid predictability pay. Employers may create a “standby” list for employees to opt-in and volunteer to pick up additional shifts without receiving predictability pay. If all employees on the standby list have been contacted and the employer still needs additional workers, then employers do not need to offer predictability pay for the particular shift at issue.
Employers may also avoid predictability pay if:
• There are “unanticipated customer needs or unexpected employee absences”;
• The employer requests volunteers through group communication;
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• The employee volunteers;
• There is an emergency or unforeseeable event;
• The employee’s hours are reduced for a disciplinary reason with just cause.
A national trend?
So far, lawmakers have principally focused on large employers in the service industry, likely assuming these employers have the best capabilities to comply. In Oregon, Senate Bill 828 applies to employers in the retail, hospitality, and food service industries with more than 500 employees. The predictive scheduling ordinance in Seattle has a similar take, applying only to retail and food service establishments with more than 500 employees; and San Francisco has singled out “formula retail” businesses — or chain stores — with more than 11 locations worldwide.
However, there are signs the issue will have a more general effect on small and midsize employers, too. The recent measure passed by New York City has various requirements applying to retail employers with 20 or more employees, as well as nationwide fast food establishments. In the smaller municipality of Emeryville, California, a predictive scheduling ordinance applies to employers with more than 56 employees globally and 20 or more employees in city limits.
The differing requirements across jurisdictions, coupled with the growth of predictive scheduling laws, may create difficulties for employers. While Oregon’s bill creates consistency within the state by preempting other local work scheduling ordinances, employers with locations in Emeryville, New York City, San Francisco and Seattle must comply with each of those separate requirements. Employers may create a universal policy by adhering across-the-board to the most restrictive of all the measures, or choose to take a more economical route by tailoring their approach to each geographic region. Even if an employer operates in a state with legislation preempting local government ordinances addressing employee work schedules, this does not relieve the obligation of other ordinances outside of the state.
One step employers can take is to try to get ahead of the trend by adopting changes to current scheduling practices. Employers can utilize technology and data to help find the most efficient scheduling practices. Some large employers already use data to better predict how many employees are required to operate at any given time. Although these laws present challenges, employers can find a way to make the most of predictive scheduling.