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How does fair workweek legislation impact employers?

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Fair workweek legislation is here to stay

As we explained in a previous post, fair workweek legislation and initiatives are aimed at making work schedules more predictable, and thus healthier and less stressful, for hourly employees. You may also hear these laws referred to as predictive scheduling or secure scheduling laws. Regardless as to what they’re called, one thing is clear: businesses can no longer afford to ignore the fair workweek trend. Fair workweek is here to stay.

Fair workweek legislation can be costly for employers

Businesses can’t afford not to pay attention. Across the country, more and more retailers and restaurants now find themselves on the hook for predictability pay, a form of compensation they must pay out every time they adjust the posted schedule. These fees range from $10 to $100 per change, per employee. In some areas, it’s a flat fee, in others, it gets more complicated, with fees being a certain number of hours charged at regular or overtime rates. The fee also tends to get higher the closer you are to the time of the shift when you make the change. A change made one week out, for example, might only cost $15. A simple adjustment made the night before could cost your business $75.

While a few bucks here and there might not seem like a big deal, it adds up. Let’s say you’ve got 25 locations. Let’s say a manager needs to make 1 small change to a schedule per day at each location, costing a simple $15. That’s $15 x 25 = $375. Across the course of a year? That’s as much as $136,875. The price of a really nice car or your kids’ college tuition. 

And what happens if you don’t pay these fees? It can get much, much worse. Businesses can be sued for millions of dollars for failing to adhere to the law. Even if your city or state doesn’t have fair workweek legislation right now, that doesn’t mean it’s not in your future.

5 Things employers need to do to avoid costly fines and fees

To stay compliant with fair workweek legislation, many restaurants and retailers need to change the way they handle scheduling. The laws also affect other areas of the business, such as hiring practices and accounting for employee requests and availability. To avoid costly penalties, here are five things employers need to start doing, the sooner the better:

1. Plan and post schedules in advance.

Anywhere from 10 days to 3 weeks in advance, depending on where you do business. If you’ve been posting schedules only a few days or a week in advance, this could be a major adjustment. You’ll now need to be more proactive in ensuring that your employees get in their scheduling requests early in order for you to accommodate them prior to posting the schedule. Fair workweek legislation typically requires businesses to accept employee input on schedules, but proactive managers know this is also just good practice. After all, if you schedule someone who can’t work on a particular day, chances are, they’re not going to make it to work that day.

You’ll also need to be more savvy with your scheduling if you want to control your labor costs. This is a big one. When predicting labor needs, most managers are anywhere from 11-16% off the mark. And that’s just 1 week out. Imagine what 2 weeks will do to managers’ estimates. On the other hand, a good sales forecasting engine can predict your labor needs accurately even 2-4 weeks out.

Most scheduling software can handle posting schedules early and accepting some form of employee input, but very few can forecast sales with 98.87% hourly accuracy. The better you can predict your scheduling needs, the fewer changes you’ll need to make to the schedule on the fly. The fewer changes you need to make on the fly, the less you’ll have to pay in fees.

2. Control who can make schedule changes and when.

Your business can no longer afford to make a lot of changes to employee schedules. You’ll want to make sure to lock down your schedules to prevent too many changes after they’ve been posted. Remember: every change you make requires you to compensate the employees who are affected by that change! On the other hand, if an employee initiates the change, such as through a shift swap or by volunteering to work, fair workweek legislation generally doesn’t apply.

Thus, if you give your employees the means to pick up extra shifts, you can effectively increase your staffing levels without increasing the amount you owe in predictability pay. You can do this with a “bid shift” system or by putting out a call for volunteers using your scheduling software’s team communication tools. The bottom line is that you want to give your workers more ways to work without you having to change their schedule. Because changing the posted schedule hurts your bottom line.

3. Document schedule changes, including who initiated those changes.

After reading #1 and #2 above, this likely won’t come as a surprise to you. Your business will now need to record every time a schedule change is made to a posted schedule. Because only employers are held accountable for changes (as noted above), you also need to document who made the change. Let’s use our example from earlier, where each change costs only $15. If you can’t prove it was your employees who made the last 450 out of 500 changes, you could be on the hook for $7,500 instead of $750. And that’s not counting what you’d pay if you’re taken to court.

Make sure your scheduling software keeps a good audit trail. And don’t take your software provider’s word for it, either. Ask them to demonstrate the audit trail with a live demo of their product, so that you can see exactly what kind of information is logged and how often. You don’t want to wait until you’re audited to find out you can’t prove you’ve been compliant. It’s not worth the risk.

4. Notify managers and employees immediately of changes.

Fair workweek legislation generally requires that you notify employees in a timely manner when you’ve made changes to their posted work schedules. Typically, this means within 24 hours of the change. But if you’re making more use of bid shifts and shift swaps to avoid penalties, you’ll need to make sure your managers are in the loop, too. Therefore, when a change is made, your business should notify the manager and employees affected, regardless of who initiated the change. Fortunately, a good scheduling system can do this for you automatically.

5. Track violations and compensate employees accordingly.

Another reason for documenting schedule changes, and who made them, is to ensure your business can track any violations and compensate employees as required. It’s understood that changes will need to be made. Emergencies happen, and some things are simply unavoidable, no matter how well you plan. In such cases, fair workweek legislation requires that you compensate your employees with predictability pay.

Ideally, you want to use an employee scheduling system that can not only track changes and who made them (#3 above) but also apply premium rates to employees’ hours for you. Because of the complex rules often involved with “clopens” and required meal and rest breaks, most scheduling software can’t handle this aspect of fair workweek. TimeForge can. But again, don’t take our word for it: ask for a live demo of our software, and we’ll show you exactly how TimeForge can handle complicated fair workweek logic.

Fair workweek legislation won’t wait for you to be ready

Fair workweek is here to stay. As the movement gains momentum, these laws will start becoming the norm rather than the exception. Protect your business; stay ahead of the trend. If you start making changes now, you’ll save yourself from avoidable penalties later. Fair workweek legislation may seem overwhelming and complex, but it doesn’t have to. In our next post, we’ll offer more tips and advice for making sure you stay compliant.

In the meantime, we strongly recommend that you take a look at your current scheduling software if you have one. If it doesn’t handle fair workweek, it may be time for an upgrade.

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