The fair workweek squeeze on employer scheduling

Employers are experiencing an intrusion of regulations and disruption around how they operate. Fair workweek laws have sprouted up across the country in numerous large cities including New York, Philadelphia and Chicago, and statewide in Oregon and New Hampshire. The recent wave of new rules affects scheduling for hourly workers in retail, hospitality and other sectors.

Many aspects of business are constrained by important rules to maintain safety, free trade, environmental standards, equity, and transparency in the marketplace. Fair workweek, or FWW, scheduling laws present a challenge that goes beyond rates of pay and fines, though. Such scheduling laws are disruptive in the way the rules restrict how employers operate and schedule work.

The intent of fair workweek laws may be to strike a balance between two interests (employer and employee) regarding the schedules people work and when they are asked to work them in order to deliver predictable and stable schedules. But despite the intent of balance, the reality is that FWW laws permeate deeply into the employer operations, dictating specifics about how the employer organizes and manages shift work in their business.

If an employer is not equipped to manage FWW, they can face higher operating costs and fines. These regulations put a significant burden of change and cost onto employers while providing a meaningful upside for workers. With added responsibility, it’s important for employers to understand these laws and their implications in the field.  

The employer is not simply one side of this balancing equation. They are caught in the middle between regulators and employees, which requires more delicate navigation. In addition, natural forces of the marketplace such as the weather, the economy, landlords and competitors, major events, and unexpected events such as the COVID-19 pandemic ensure an environment of constantly moving parts for employers to navigate.

Fair workweek disruptors for employers and employees

For employers, these disruptors are very real, unpredictable and largely out of their control. To stay afloat, employers need to control how they react and how they operate. 

A successful business is agile and smart. It faces the impacts to its business and makes changes to adjust various operating aspects, including schedules. Often these changes must happen quickly and without notice. 

Not every schedule change is huge. It could mean changing operating hours for a day or two each week or needing more workers one evening. A more significant change could encompass pivoting to drive-up service, staggering shift start times or transitioning more workers to part time. 

Also read: Ethics and the future of workforce management

The constant for employers is change and uncertainty. The FWW constant is that the rules apply to situations regardless of the degree of schedule change.

Workers face real and unpredictable forces as well. The weather, car trouble, a sick family member, the demands of school or a spouse’s job can change how they operate. 

Having unpredictable schedules and variable hours week to week can put a disruptive strain on the personal lives of employees putting them in the middle of their job and their personal demands. So why are we here?

The origins of fair workweek

The FWW movement was born out of concern for the employee side of the shift work equation. Voices grew loud about how the schedule volatility burden was being put onto workers. From the worker’s perspective, employers over-tilted on solving for the impact outside forces have on their business. Workers were living through highly optimized schedules that entailed last-minute shift changes, minimal advance notice of schedule assignments and awful “clopening” shifts.

Employers weren’t intending to rely on haphazard work schedules to keep their business running. They didn’t look closely enough at the human side of scheduling to understand the impact these schedules were having on their people.

Managers weren’t using a methodology for scheduling that produced high quality schedules for workers. Because employers didn’t quantify the impact of schedules on worker experience and the cost to their business, they missed realizing that focusing only on business issues wasn’t good for their overall employee health and system of operating. Employees wanted a move away from this business-centric approach to a more worker-centered model.

Regulators certainly couldn’t remove the volatility in the marketplace that causes employers to change schedules. And they couldn’t eliminate the personal situations employees face that necessitate needing predictable, stable schedules. But the regulators could, through FWW laws, remove the volatility that employees experience around schedules.

Searching for a new scheduling model

In comes the squeeze. FWW has put employers in the middle of marketplace VUCA (volatility, uncertainty, complexity, and ambiguity) and workers. Employers are in a real pinch – the laws prescribe how employers must act and react. The economic laws of nature also mandate terms and conditions. To even out the strain of uncontrollable external volatility and uncertainty on the one side and rigid internal employee-focused scheduling rules on the other, employers have to operate differently. 

The way forward is to “operate differently” not just simply “schedule differently.” FWW rules circumscribe more than just assigning and changing schedules. FWW rules apply to several business functions before and after a schedule. 

FWW rules must be part of hiring and reporting, scheduling and compensating, training and operational performance. The rules are different in each jurisdiction and more localities and states will add new laws. Managing the complexity and ambiguity is a challenge.

Operationally, FWW will change how employers forecast labor demand, how they convert demand into shift schedules, how they assign employees to shifts, how they react to real-time disruptions or changes in their business, how they plan for the cost of labor, the scheduling and payroll systems they use, who and how they hire, and how their company survives and thrives. 

For employers looking to navigate these new regulations, there are important steps to take:

• Recognize that FWW is much more intrusive than a minimum wage increase or paying a premium. FWW compliance will change how you run your business.
• Incorporate FWW into your financial planning. Prepare for a 3- to 9 percent increase in labor costs to account for additional wage premiums paid to workers.
• Assess your readiness to align to the FWW rules. Be certain of what you need to do. Use an independent third party to assess how fair workweek processes are handled and to identify gaps in processes, technology, and training.
• Assign a fair workweek owner who is responsible for FWW transformation and sustainment. Task this person with documenting the risk profile for the organization and creating a plan for training, controls and system changes.
• Define what good FWW alignment and compliance look like for your business and your people. Set goals for compliance and develop plans to achieve them such as updating procedures, incorporating incentives, adding new KPIs, etc.
• Assess your technology platforms (payroll, HR systems, and employee scheduling software) and determine their ability to handle the required processes, payments, scheduling checks and document retention required.

The objectives of the fair workweek are well-intentioned, but the realities can be adverse for businesses. It will take time, investment, and adjustments for employers to rebalance the scales of FWW. 

The pressures of FWW mandates coupled with the extreme conditions of the marketplace today put a spotlight on labor scheduling. Fair workweek requires adjustments to processes, systems and how people are scheduled. Getting the changes right will lead to improvements in employee satisfaction and managed increases in labor cost.