Fair Scheduling and Pay Equity: HR Compliance Trends To Watch

October 31, 2017

Reviewing important issues that affect franchise businesses.

By Rebecca Morris

Two HR trends that have been affecting the franchise world in 2017 are fair scheduling and pay equity laws. Here’s what you need to know…

#1: Fair Scheduling:

“Fair” or “predictive” scheduling laws require employers to follow certain scheduling practices and typically cover employees in the retail, food services, and in some cases, hospitality industries. While these laws differ among jurisdictions, they typically have the following components in common:

· Good faith estimate. At the time of hire, employers must provide a written, good faith estimate of the number of hours an employee can expect to work per week.

· Advance notice of schedules. Employers must provide a written work schedule in advance (usually at least 14 days) that outlines regular and on-call shifts.

· Work schedule requests. Employees have the right to identify preferences for the hours or locations of work and to request to not be scheduled for certain shifts or locations.

· Notice of schedule changes. Employers must provide employees with a certain amount of advance notice before any schedule changes.

· Premium pay for certain schedule changes. Employers must provide employees with premium pay if they change their schedule outside the minimum notice window.

· Access to additional work hours. Employers must offer additional work hours to qualified existing employees before hiring external employees.

· Poster. Employers must post a notice of employees' rights under the law.

· Recordkeeping. Employers must retain certain records related to scheduling employees.

To date, the following jurisdictions have enacted scheduling laws:

If you are covered by one of these laws, make sure you read and understand the law in full and that your scheduling practices comply. This trend is expected to continue, so employers in other jurisdictions should watch for developments.

Jurisdiction	Covered Employers	Effective Date
San Francisco, Calif.	Formula Retail Employee Rights Ordinances (FRERO): Formula retail establishments (or chain stores) with at least 40 establishments worldwide and 20 or more employees in San Francisco. Excludes non-profit corporations. (http://sfgov.org/olse/formula-retail-employee-rights-ordinances)	FRERO: October 3, 2015
San Francisco, Calif.	Family Friendly Workplace Ordinance (FFWO): Employers with 20 or more employees. Includes all employees inside and outside of San Francisco, regardless of their status or classification as seasonal, commissioned, permanent or temporary, or full-time or part-time. (http://sfgov.org/olse/family-friendly-workplace-ordinance-ffwo)	FFWO: January 1, 2014
San Jose, Calif. (this law is generally limited to access to additional hours)	Private and non-profit employers with 36 or more non-exempt employees that are either subject to the city's business license tax or have a location in the city that's exempt from the state's business license tax. (http://www.sanjoseca.gov/index.aspx?NID=5360 )	March 13, 2017
Emeryville, Calif.	Retail firms with 56 or more non-exempt employees globally. Fast food firms with 56 or more non-exempt employees globally and 20 or more non-exempt employees within the city. (http://www.ci.emeryville.ca.us/1136/Fair-Workweek-Ordinance )	July 1, 2017
Seattle, Wash.	Retail and food service establishments with 500 or more employees worldwide. To be covered, full-service restaurants must also have 40 or more locations worldwide. (https://www.seattle.gov/laborstandards/ordinances/secure-scheduling )	July 1, 2017
New York City, N.Y.	Fast food chains (including franchises) that are one of 30 or more establishments nationally. Retail employers that sell consumer goods in NYC and have 20 or more full-time, part-time, or temporary employees. (http://www1.nyc.gov/office-of-the-mayor/news/372-17/mayor-de-blasio-speaker-mark-viverito-that-new-york-city-the-largest-city-end/#/0)	November 26, 2017
Oregon	Employers in the retail, food services, and hospitality industries employing 500 or more employees worldwide, including but not limited to a chain or an integrated enterprise. (https://olis.leg.state.or.us/liz/2017R1/Downloads/MeasureDocument/SB828)	July 1, 2018

Scheduling Best Practices

Here are some scheduling best practices for all employers, including franchise owners to consider:

· Make accurate projections. Make projections based on the amount and type of work that needs to get done, when it must be done, and the talent and resources you have available. Consider your employees' availability, preferred shifts, and desired number of hours per week.

· Ensure proper balance in staffing. During each shift, make sure you have enough supervisors and experienced employees to ensure that your business runs smoothly.

· Keep an eye on overtime. Extensive overtime can drive up labor costs and lead to lower productivity and morale. Monitor overtime closely and consider its impact when scheduling employees.

· Provide enough time off between shifts. Provide employees with enough rest in between shifts, especially for safety-sensitive positions. Note: Certain federal, state, and local laws place restrictions on the number of hours an employee can work per week and how much time off must be provided between shifts.

· Track vacation, sick, and other paid time off. Track time-off requests closely and look for certain times of the year or days of the week where requests spike and plan accordingly.

· Use pilots for new product or service launches. If you are unsure how a new product or service may affect your staffing needs, consider using a pilot to help gauge the impact.

· Consider shift swaps and cross-training. Allowing employees to swap shifts can make it easier to maintain adequate staffing levels and give employees flexibility when work-life conflicts arise. Consider cross-training employees to make it easier to find a back-up for unscheduled absences.

#2: Pay Equity:

Several jurisdictions are expanding and clarifying their laws prohibiting gender-based discrimination in pay, including restricting employers from making inquiries into an applicant's pay history during the hiring process. This is because a candidate's pay history may reflect discriminatory pay practices of a previous employer, which then could result in lower wages in the new job.

While these laws differ among jurisdictions, they typically prohibit employers from seeking compensation history from an applicant or his/her current or former employer. Generally, employers are also prohibited from screening applicants based on their pay histories, including by requiring that an applicant's prior compensation satisfy minimum or maximum criteria.

The following jurisdictions have enacted these types of restrictions:

· Oregon (effective Oct. 6, 2017)

· New York City, N.Y. (effective Oct. 31, 2017)

· Delaware (effective Dec. 14, 2017)

· Massachusetts (effective July 1, 2018)

· San Francisco, Calif. (effective July 1, 2018)

· Philadelphia, Pa. (blocked due to pending litigation – watch for developments)

If you are covered by one of these laws, remove salary history questions from application forms and train supervisors and hiring managers to avoid salary history questions during the pre-employment process.

Pay Equity Best Practices

Here are some general best practices for ensuring pay equity:

· Conduct internal audits. Consider working with legal counsel to conduct an internal audit of pay practices to confirm that employees working in similar positions are paid equitably based on skill, merit, and other nondiscriminatory factors.

· Examine policies and procedures. Review pay-related policies and procedures to ensure compliance with all applicable laws. Develop a clear written equal employment opportunity policy and include a complaint process for employees to raise concerns.

· Train supervisors. Provide training on the company's compensation-related policies and procedures and commitment to equal pay.

· Consider pay transparency. Clearly communicate how the company determines employees' compensation.

· Promptly respond to all complaints. Take all complaints seriously and conduct a prompt, impartial, and thorough investigation.

· Document. Confirm employment decisions are made for legitimate, nondiscriminatory reasons and properly document all pay and performance related decisions.

Conclusion

Federal, state, and local laws continue to change. Regularly review workplace forms, policies, practices, and training to ensure compliance with current requirements.