At times, you may want to suddenly change an hourly employee's work schedule to better suit your business needs. However, several jurisdictions have enacted predictive scheduling laws to prevent certain employers from changing hourly employees' schedules without giving advance notice.

On Nov. 25, 2014, San Francisco passed the first predictive scheduling law, called 'The Formula Retail Employee Rights Ordinances.'

The San Francisco law requires covered retail chains to give employees their work schedules two weeks in advance. Covered employers who change an employee's schedule without giving at least seven days' advance notice must provide the employee with "predictability pay" (a penalty) — unless an exception applies.

Several other jurisdictions across the country have passed, or are considering, predictive scheduling laws. Most of these laws exclusively target larger employers in the retail, hospitality and food services industries.

Per an article published by the Society for Human Resource Management, "As justification for this disparate treatment, legislators have pointed to the disproportionate number of low-wage workers present in these industries who they believe warrant greater protection."

Currently, the following jurisdictions have enacted predictive scheduling laws:

• San Francisco (effective July 3, 2015).
• Emeryville, California (effective Jan. 1, 2018).
• Chicago (effective July 1, 2020).
• New York (effective May 30, 2017).
• Oregon, statewide (effective Aug. 8, 2017).
• Philadelphia (effective April 1, 2020).
• Seattle (effective July 1, 2017).

Further, states such as Vermont and New Hampshire have passed "flexible working arrangements" laws. While these aren't actual predictive scheduling laws, they give employees the right to request scheduling changes and encourage employers to consider these requests.  

Predictive scheduling rules vary by jurisdiction, but often have the following components:

• Advanced notice of work schedules.
• Written estimate of the number of hours the employee will likely be scheduled to work.
• Predictability pay if adequate advance notice isn't given.
• Exceptions to the predictability pay requirements.
• Posting rules.
• Breaks or rest periods between work shifts.
• Record-keeping criteria.

COVID-19 exception

During the COVID-19 pandemic, many businesses had to close or radically modify employees' work schedules.

As stated in an article published by SHRM, "The [predictive scheduling] laws in many jurisdictions provide exceptions to the notice rules and penalties when acts of nature or other circumstances outside the employer's control hinder operations." The COVID-19 pandemic likely qualifies as an exception.

State restrictions

States such as Arkansas, Georgia, Iowa and Tennessee have passed laws banning their local governments from enacting employment-related or scheduling laws. In such states, employers do not have to abide by predictive scheduling laws unless the state or federal government mandates it.

Generally speaking, industry observers expect more states and local governments to enact predictive scheduling legislation. Therefore, employers should be on the lookout for new developments. Make sure you are well versed in the rules governing your business in your jurisdiction.

If you'd like even more tips on keeping your small business compliant - whether you're dealing with HR, payroll, workers' comp, or other issues - make sure to download our 6 Pillars of Payroll checklist below! 

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