Predictive Scheduling: How To Adjust To Local Labor Law Changes

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Learn more about predictive scheduling, and how these new labor laws could affect your restaurant business.

The following article is an overview of local predictive scheduling laws you may encounter as a restaurant owner or the person who does scheduling for a restaurant. It's provided for informational purposes only and not for the purpose of providing legal, accounting, tax, career or other professional advice. Scheduling and labor laws will vary from state to state, so for detailed instructions and advice about how to approach staff scheduling in your area, consult with a lawyer or The Internal Revenue Service (IRS) directly for the most accurate information.

Of the many things a restaurant owner is expected to juggle—bookkeeping, marketing, sales, and training, to name a few—the latest round of new labor laws has bumped employee scheduling and overtime considerations to the top of the list.Running a profitable, compliant establishment that steers clear of costly penalties is every restaurant owner’s goal. By getting educated on how these new labor laws impact the foodservice industry and adjusting your business practices, you won’t lose a step.

Let’s dive into the new labor laws rolling out across the country, as well as effective tactics for how to protect yourself, your employees, and your bottom line.

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What is predictive scheduling? 

Predictive scheduling, also known as fair scheduling, secure scheduling, predictable scheduling, or restrictive scheduling, is a type of legislation that sets mandatory requirements for restaurant managers related to scheduling and overtime practices.

These pieces of legislation act as safeguards for shift workers in the hospitality and retail sectors who, in the past, have fallen prey to unfair and otherwise unethical treatment at the hands of their employers.

Predictive scheduling is just one part of a larger movement toward employee-friendly legislative reform. In the U.S., the Fight For 15 movement began in 2012 as a grassroots push for an increased minimum wage, and a greater consideration for pay equity in the workplace.

Given that labor costs are second only to food and beverage costs, many restaurateurs worry about how these societal shifts and legislative changes might negatively impact profitability.

Shift work at a glance 

Shift work by its very nature is unpredictable and, in some ways, destabilizing. Some are attracted to this flexibility, but for others, it is a source of constant physical, psychological, social, and financial stress.

A report from the Economic Policy Institute investigating the psychosocial effects of shift work and employer-mandated overtime reveals several compelling insights relevant to the foodservice industry.

Workers who maintain an irregular schedule (working on rotating or split shifts) are more likely to be subject to involuntary overtime. This group is further narrowed down to workers who earn between $22,500 and $40,000 annually, who work longer weekly hours, whose daily schedules are largely out of their control, and who feel there are never enough staff members on hand to get the job done.

Not surprisingly, last-minute shift changes, cancellations, and overtime impede workers’ ability to carry out a routine and can be the cause significant conflict both at home and at work.

Since workplace stress is linked to employee disengagement, lack of productivity, increased absenteeism, restaurateurs will see these effects directly reflected in their profits.

Enter predictive scheduling—a legal step toward minimizing (if not eliminating) the negative repercussions felt both by employees and the businesses that employ them.

The Big Three

Currently, there are three cities—San Francisco, Seattle, and New York City—whose predictive scheduling legislations set the bar.

Restaurateurs elsewhere aught look to these cities for what to expect should their municipalities decide to follow suit.

San Francisco – Formula Retail Employee Right Ordinance

Enacted in 2014, San Francisco’s ordinance impacts franchises with 40+ locations globally and those with 20 or more employees in the San Francisco area.

Conditions of these laws include:

  • Two weeks’ notice for schedules
  • Written estimates of minimum shifts per month
  • Between two to four hours’ pay for employees who are on call but not required to work
  • Managers must maintain at least three years of shift records

Seattle – Secure Scheduling Ordinance

Seattle’s Secure Scheduling Ordinance came online in 2016; its conditions affect retail and fast food operations with 500 or more employees globally and full-service operations with 500+ employees and 40+ locations around the world.

Conditions of these laws include:

  • Two weeks’ notice for schedules
  • A minimum 10-hour break between shifts
  • Compensation in the form of half the hours scheduled for employees who are on call but not required to work
  • Managers must maintain at least three years of shift records

New York City – “Fair Workweek” Package

In 2017, New York City introduced the “Fair Workweek” package to regulate business practices of restaurants with 30 or more locations in the U.S.

Conditions of these laws include:

  • A minimum of 72 hours’ notice for schedules
  • A minimum 11-hour break between shifts
  • A guarantee of 20+ hours of work per fortnight
  • Managers must maintain at least three years of shift records

What does this mean for restaurant owners?

Although different cities put their own spin on the specifics of scheduling and overtime legislative changes, The Big Three support the idea that most, if not all, predictive scheduling laws need to address:

  • Employee breaks (both between and during shifts)
  • Predictable pay
  • Advance notice
  • Recourse rights, and reporting
  • A penalty schedule, detailing how much you’ll owe for failing to adhere to any of regulations outlined in the policy.

If you’re in an area considering predictive scheduling legislation, it’s especially important to take time to research and familiarize yourself with the ways these changes may impact the way you do business.

For example, “on-call” scheduling might all but disappear depending on the legislation on the table—a troubling thought for restaurants who rely on this kind of flexibility to accommodate traffic surges, seasonality, or unexpected weather systems.

There can also be costs associated with oftentimes overlooked items, like mid-shift breaks. In California, if an employee does not receive (or fails to take) a break, by law you are required to add an additional hour of pay.

The good news is that there are a number of effective labor management tools and time-tested strategies to help you stay compliant within this ever-changing landscape.

Tips and tools to manage labor law changes 

In light of predictive scheduling changes, it’s important to keep a watchful eye over your staff scheduling and overtime patterns.

Luckily, restaurateurs today have access to a wealth of tools, software, and systems, that offer solutions for virtually every aspect of restaurant operations, including restaurant employee scheduling.

When selecting restaurant employee scheduling software, be on the lookout for two core features that will streamline your restaurant’s scheduling practices:

  • Overtime and break alerts - Choose a solution that will automatically alert you when your staff members are due for a break or are about to go into overtime. This will save you from having to pay pricey penalties for non-compliance.
  • Sales forecasting - Integration with your restaurant POS allows your scheduling software to utilize sales data to help you build a more accurate schedule and control labor costs. This gives peace of mind your labor needs are on the mark and will help reduce or even remove the need for demand scheduling.

Not interested or ready to invest in a software solution? No problem. A few minutes in Excel, or a quick trip to your local office supply store, will help you stay the course:

  • Build a staff availability template and get into the habit of completing the template on a regular basis. Habituating this practice will ensure you have up-to-date availability, which allows you to prepare and release schedules within the legally mandated timeframes.
  • Whether virtual or manila, keep a folder of all of your past schedules so you don’t turn up empty handed to an audit.

Toast Payroll & Team Management

Regulations like higher minimum wage rates and scheduling enforcement are on the rise at the federal, state, and local level, growing the risk of non-compliance. Our community of restaurateurs needs to have the right tools on hand to ensure they can succeed in this new reality, and we believe we can help. 

As the leading technology platform powering thousands of successful restaurants across the US, Toast's restaurant-specific payroll & team management platform helps our community save time each pay period, onboard new employees faster, protect their businesses, and do more for their teams. Toast Payroll also offers support for state-specific regulations like NY Spread of Hours Law and CA Meal Break Penalty, as well as automated federal, state, and local tax filings in all 50 states. Learn more about restaurant payroll from beginning – collecting the necessary legal paperwork from staff – to end – storing payroll and tax related documents after conducting payroll in your restaurant. 

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DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.