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11 ways to implement predictive scheduling without killing your bottom line
Not complying with predictive scheduling mandates can quickly add up to significant penalties.
January 24, 2018 by Cherryh Cansler — Editor, FastCasual.com
Several cities across the United States have either already passed or are at least looking into laws that require restaurant brands to participate in predictive scheduling or secure scheduling. Becoming compliant with these laws often requires franchise owners to:
- Post work schedules 14 days in advance.
- Give employees additional "premium pay" if hours are added or subtracted from their schedules within that 14-day period.
- Give employees up to four hours of premium pay if they cancel an employee's shift within 72 hours of the start of the shift.
- Give on-call workers extra premium pay.
- Pay employees extra if they work consecutive closing and opening shifts without adequate rest in between,, a process known as "clopening."
The cities of San Francisco, San Jose and Emeryville, California, for example, have passed their own versions of predictive scheduling, while Oregon recently passed a statewide ruling set to go into effect this summer. New York City's "Fair Work Week" law took effect last year, and New York's Department of Labor has proposed similar regulations for the entire state.
Seattle passed secure scheduling last year, much to the dismay of David Jones, owner of seven Blazing Onion Burger locations and two Subway locations in and near Seattle.
The law, in his opinion, was geared toward full-service brands that often send workers home early when they aren't busy or call in extra staff when business unexpectedly picks up. Seattle's full-service employees started protesting, however, when they thought it would lead to a reduction in their hours. Many servers, for example, like to work Saturday night and Sunday brunch, a process known as "clopening." The new law, however, requires employers to pay time-and-a-half to any employee not having a 10-hour break between shifts.
"They didn't think they'd get their hours, so that started a rebellion," Jones said in an interview with FastCasual.
After the protests, the city changed the law to leave out businesses with fewer than 40 units and 500 employees.
Although Jones considers himself a small business owner — since two of his brands carry the name Subway — the law does not. That means he has to comply with the city's secure scheduling laws or pay fines.
"They don't consider a franchised Subway a local owner, and yet every Subway in Seattle is a local owner," said Jones, who pointed out that he was left on his own to understand the compliance laws. "They think since we are Subway we are getting all this help, but we get negative support. Subway wouldn't allow me to do any training, so I had my own training in May. The room was packed." (Editor's note: FastCasual has an inquiry into Subway concerning that allegation.)
A lack of training and or understanding is detrimental to the bottom line because penalties around the scheduling practices can drastically impact labor costs, said Nathan Pickerill, principal solutions architect and solution center manager at HotSchedules, a provider of scheduling and labor management solutions.
"Predictive scheduling regulations are really the first time that scheduling practices have impacted the end pay of the employee, and managers need to change their mindset around managing labor as it isn't just dependant on that actual clock in/out process," he said.
The most ironic part of the law, Jones said, is that it is fixing scheduling issues that fast food chains rarely have.
"We are good at scheduling. It's the full-service restaurants that have issues with staffing when they get busy trying to deal with a Mariners game or a Seahawks game … stuff like that. I don't really send people home early or call people in," Jones said.
He tried to explain that to city council members by showing them that over a two-month time period, he had only one scheduling change — which was when a worker called in sick.
"But since (full-service workers) complained, they were eliminated, and that left (fast food chains) as the guinea pigs because they needed someone to test it."
Jones, who was one of two business owners who spoke out against the proposed secure-scheduling mandates before they were passed, said his best advice to restaurant owners was to get to know their city council members before these laws start popping up in their states.
"You need to go to meetings and speak up but also get the members to sit down to have a cup of coffee before this comes to town," he said. "If you have a good relationship, maybe they will at least listen to them, too. It was too late with Seattle."
How to tackle predictive scheduling
For operators in areas where the laws are already on the books, however, technology can help manage requirements around documentation and editing schedules, Pickerill said.
"It can send reminders around behaviors within scheduling that could potentially cost the operations penalties based on the actions of the manager," he said.
While costs can vary based on the system, implementation and monthly fees can easily be recouped just by saving on a few penalties per month.
"The additional ability to more accurately apply your labor to the appropriate sales/volume level and reduce labor cost while driving sales also help to offset costs and drive ROI," Pickerill said.
While the law only costs Jones about $800 per year per store, it requires a lot of documents, which equals about four extra hours per week per store.
"It's complicated — a ton of extra work," said Jones, who uses the HotSchedules platform to help him manage scheduling at his Blazing Onion Burger locations. "I think Seattle does things for the press; they just do it for politics, to get their name in the press."
Pickerill understands that the mandates around predictive schedule can provide a better environment for employees, but compliance is a lot more complex — especially for owners and managers still using manual systems and documentation. He recommended the following tips when it comes to managing predictive scheduling:
- Educate the people who make your restaurant schedules — your managers.
- Find an online system to create and communicate schedules 14 days in advance of shift.
- Invest in tools to give employees "right to request input into the work schedules."
- Find a solution that lets employees easily submit availability and time-off requests.
- Use a system to find replacement coverage and proof of picking up voluntary hours.
- Electronic documentation of manager approval/denial with reason and date/time.
- Electronic documentation or consent from employee around certain shift transactions; voluntary and involuntary.
- At a minimum, keep three years of archived, documented shift transactions and other documentation related to employee schedules (eg: disciplinary reasons for not providing additional hours.)
- Consider an app to provide schedules and related shift transactions in English and the employee's primary language.
- Remove "on-call" or "call-in" shifts from your scheduling practices.
- Choose a system that automatically alerts managers when they schedule "clopening" shifts.
"Not complying with the mandates can add up to significant penalties in just a matter of a couple of months," he said. "Even restaurants that aren't required to follow the mandates, but are in these geographical areas are impacted by these regulations. Employees may prefer to work at a location that abides by these mandates due to the increased quality of life in regards to their schedule and the potential for additional wages due to these penalties."
About Cherryh Cansler
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