So-called “fair scheduling” laws politicians say incentivize full-time jobs actually shift employees involuntarily to more part-time work, a new University of Kentucky study supported by the Employment Policies Institute finds.
On top of other restrictive mandates such as steep minimum wage hikes and paid leave requirements which have been demonstrated to reduce employment and cause business closures, many areas have also enacted predictive scheduling mandates that prevent employers from changing work schedules as far as two weeks in advance.
Aaron Yelowitz, economist at the University of Kentucky’s Gatton College of Business and Economics, compared numbers of those working part-time involuntarily before and after scheduling laws were enacted in San Francisco, New York City, Seattle, and Oregon. Yelowitz’s analysis concludes that instead of increasing the proportion of employees working full-time schedules, the laws “led to a shift toward part-time employment, primarily driven by workers who wanted to work full-time.”
Why do “fair scheduling” laws have this adverse effect?
In essence, these laws restrict employers from adapting schedules to change with demand, and are targeted to apply to industries such as food service and hospitality where foot traffic can vary based on the weather and other external factors.
The laws establish penalties for changing employee schedules that occur in response to demand changes, and therefore raise the costs of scheduling employees without knowing future demand circumstances. As a result, employers are forced to weigh the risk of having to cut staff from the schedule if demand is lower than expected and face penalties, or have too few staff scheduled if demand is higher than expected.
Yelowitz’s new study concurs with a larger body of research that indicates this cost-benefit calculation leads many employers to schedule fewer employees – to avoid having too many staff in low-demand situations and facing penalties for rearranging work schedules. Instead of incentivising full-time employment and schedule stability, employees who prefer or want full-time schedules see their shifts reduced and status pushed to part-time involuntarily. Past reports show businesses reduce hiring, limit extra shifts for employees that want them, and overall reduce flexibility and profitability of jobs in affected industries. One survey found in anticipation of scheduling legislation in 2020, 67% of restaurant operators reduced employee hours, wages, or benefits, or laid off employees entirely.
Currently, Oregon, Seattle, WA; New York City, NY; Philadelphia, PA; San Francisco, CA; Emeryville, CA; San Jose, CA; and Chicago, IL have “Fair Workweek” laws.
But the movement to expand to other states and cities is growing. Last year, Connecticut lawmakers advanced a similar bill, which died in the state Senate after passing in the House. Other proposals have surfaced in Boston, MA; Los Angeles, CA; and statewide in California and Illinois.
State and local lawmakers should carefully consider the harms Fair Work Week laws bring for employees, while also failing to fulfill their promises.
Read the abstract below, and find the full study here.
“Since 2015, several sizable jurisdictions have implemented predictive scheduling laws where the intent is to regulate unpredictable work schedules – schedules which may affect the ability of workers to arrange child care, care for other family members, or attend school. These laws raise the cost to employer of adjusting a worker’s schedule near to the time of work. Such laws were phased in over time, and specifically targeted workers in the retail and food services industries, but largely not other industries. When labor costs are increased for cancelling shifts if demand turns out to be low, one potential employer response is to not schedule as many workers for uncertain periods of demand. Using a difference-in-differences (DD) framework (based on geography and time within affected industries) and the 2014-2020 March Current Population Survey (CPS), I find that among workers, the composition of employees working part-time increased by approximately 9.2 percentage points. Approximately two-thirds of this shift – 6.3 percentage points – comes from those reporting to be part-time involuntarily (e.g., due to economic reasons, such as “slack work”, “unfavorable business conditions”, “inability to find full-time work” and “seasonal declines in demand”). Very little of the shift is explained by non-economic reasons (such as “childcare problems”, “family or personal obligations”, or “in school or training”). As such, it appears that predictive scheduling laws failed to provide some of the key anticipated benefits, while limiting opportunities for at least some workers.”