Sponsored by HotSchedules.

In 2014, Starbucks faced tough criticism for its labor scheduling practices, such as quick turnarounds between shifts or only giving a few days notice before employees were expected to work. In recent years, other practices, such as scaling back hours, have also come under intense scrutiny, resulting in petitions and protests from employees and consumers. But this isn’t just a problem for the coffee giant—these labor practices are common in the hospitality industry, and as scrutiny into hiring and scheduling intensifies, many brands may need to change their policies.

Since San Francisco passed the first predictive scheduling legislation in 2014, the debate about the  the rights of hourly employees and their employers has intensified. More jurisdictions, from cities to states, have discussed and passed legislation dictating how hourly workers may be scheduled. Though the laws vary by jurisdiction, they can include:

• Good Faith Estimates—written notice of median hours candidates can expect to work upon hiring
• Right to Request—employees are able to request schedule preferences, especially to balance commitments such as school
• Advance Notice—Businesses must post employee schedules 14 days in advance
• Right to Rest—Employees must have a 10–11 hour rest period between work days or will be compensated with premium pay
• Access to Hours—Managers must offer additional hours to existing employees before hiring new staff
• Record-Keeping Requirements—Employers must keep records for 3 years to show compliance
• Protection from Retaliation—Employees have the right to decline any hours not originally posted on the schedule.

Even restaurants that don’t operate within states or cities that have these rules in place are under scrutiny from guests and face the risk of reputational damage if they don’t comply.

“The trend to consider laws similar to what Oregon and New York and other areas have passed is spreading,” says Nathan Pickerill, principal solutions architect and solutions center manager for HotSchedules, a company that offers cloud-based operating solutions and services for the industry. “It’s important to know the political climate of the states your company operates in, and to examine how quickly your company could move to handle the documentation and process change involved if one of these types of laws were to take effect.”

Predictive Scheduling Legislation Complex, but Manageable

While these laws help protect workers who otherwise may have issues finding childcare or managing bills due to inconsistent scheduling, they also strain restaurants, since employers may no longer be able to flexibly schedule for differences in traffic versus projections, events, or catering. Not only do these laws make scheduling more complex than in the past, they also make it harder to make schedule changes. With more restrictions on when schedules can be posted and when employees can work, restaurants are also at risk of penalties and reputational damage if they fail to comply. Additionally, covering the shifts of an employee who quits is no longer as simple as hiring a new employee or just asking a staff member to pick up a shift.

“The concept of having ‘on call’ staff to handle variable business needs, like large deliveries or catering events that pop up suddenly, is being eliminated,” Pickerill says. “Schedules now need to be posted and not altered by the manager at least two weeks in advance, and this is going to take careful planning and forecasting to make sure they are as accurate as possible the first time.”

Avoiding Penalties and Doing Right by Employees and the Business

Pickerill says that failing to follow any of these guidelines means that some operators could be at risk of paying several hundreds of thousands of dollars in penalties. For example, the New York City Council passed a five-bill package called “Fair Work Week,” which states that fast food establishments could face $500 penalties for the first violation of these standards and up to $1,000 penalties for multiple violations.

Additionally, employees can file for private civil action for damages and legal fees for up to two years after the alleged violation. This makes it critical for restaurants to not only follow the law, but to ensure scheduling practices are followed. For this reason, many brands are relying on technology that can be configured to take all the legal parameters into consideration, along with employer and employee preferences, to automatically generate an optimized schedule each time.

So how can restaurants prepare without hampering operations? One strategy is to use digital scheduling solutions with robust features, like the ones available through HotSchedules’ new cloud-based intelligent back office platform, Clarifi. The Labor module can be configured to address the provisions under predictive scheduling legislation with configurable labor rules, manager alerts to potential compliance violations, shift transaction reporting, and continuous electronic documentation.

“Simply posting and changing the schedule on a spreadsheet or on a paper schedule might make it difficult to meet the standards around legal documentation,” Pickerill says. “Posting the schedule in cloud-based scheduling software and sending the schedules to employees via email or an app provides time-stamped data. Having an application or online tool that timestamps when the employee signs off on voluntary shift modifications and swaps is considered documentation. When it comes to alternative methods of scheduling, operators need to ask themselves whether it’s possible to meet documentation requirements or provide proof of scheduling and shift transaction documentation if there’s a class-action lawsuit.”

With increasing restrictions, as well as customer scrutiny, restaurants can no longer afford to ignore predictive scheduling. Additionally, with a shrinking restaurant labor pool, scheduling has become an even more important piece of employee retention. Though predictive scheduling means operators have to take additional steps to make sure their schedules—and the changes in those schedules—are handled according to the provisions in the law.

“The number of conversations we’re having with customers who want to get ahead of these predictive scheduling regulations grows every week,” Pickerill says. “There’s no sticking your head in the sand on this one. In fact, we’ve seen some customers actually rolling out the provisions company-wide because they see the value in it for their employees. That kind of proactive planning and rollout of new labor compliance processes is easier to manage with the right partner, proven technology and robust predictive scheduling features.”