Predictability scheduling and pay laws, also known as fair workweek laws, are a fairly new trend in the workplace. In fact, the first ordinances on the books were passed only a decade ago in California — where most trends begin.
But the problem predictability pay aims to fix — that many Americans don’t have predictable work schedules or paychecks — has existed for much longer. Unpredictable schedules affect between 10-30% of workers. It’s a phenomenon that spans from low-wage service industries like hospitality and retail to higher-wage jobs in construction, production, and transportation.
Unstable scheduling makes it more difficult for employees to plan for their lives outside of work, find child care, or maintain a budget. Research shows it even leads to psychological distress, poor sleep quality, and unhappiness.
For employers, this can increase presenteeism, absenteeism, and turnover. A Pew study shows scheduling issues as three of the top reasons U.S. workers left a job during the Great Resignation. On the other hand, increasing schedule stability at a specialty retailer increased productivity by up to 24%.
If you’re looking to stand out in recruitment efforts, improve retention, and support employee wellbeing, you might consider predictability pay. Read on to learn more about what it is, where it’s required, and the business impacts of offering it.
What is Predictability Pay?
Predictability pay is additional compensation offered to employees when their schedules are made unpredictable. This could include cutting hours, changing locations, or releasing the schedule late. This type of pay is commonly part of fair workweek laws aimed at providing stability and predictability for workers in industries with fluctuating schedules.
Is Predictability Pay Required?
The cities with a predictability pay law on the books include:
- Berkeley, CA
- Emeryville, CA
- San Francisco, CA
- Los Angeles, CA
- San Jose, CA
- Chicago, IL
- Evanston, IL
- New York, NY
- Philadelphia, PA
- Seattle, WA
In addition, there are states and localities that regulate predictable scheduling in other ways. For example, in the state of Oregon, retail, hospitality and food service companies with 500+ employees worldwide must:
- Provide a good faith estimate of median scheduled hours upon hiring
- Distribute schedules at least two weeks in advance
- Offer 10 hours of rest between shifts
- Pay 1.5x the regular rate if workers consent to a clopening (closing and opening) shift
You might operate in states where local governments are prohibited from enacting any predictive work schedule laws. Those states include:
- Alabama
- Arkansas
- Florida
- Georgia
- Indiana
- Iowa
- Kansas
- Michigan
- Ohio
- Tennessee
- Wisconsin
Pros and Cons of Predictability Pay
Offering predictability pay comes with advantages and challenges. They include:
Advantages
- Improved employee retention: Workers who can count on consistent schedules and compensation are more likely to stay with their employer. This reduces costly turnover and training expenses.
- Enhanced productivity: When employees aren’t worried about sudden schedule changes, they can focus better on their work.
- Hiring advantage: In today’s competitive job market, offering predictable schedules and pay can be a significant differentiator. This benefit particularly appeals to workers with caregiving responsibilities or those pursuing education.
- Reduced absenteeism: When employees can plan their lives around reliable schedules, they’re less likely to miss work due to conflicts with childcare, medical appointments, or other commitments.
- Improved mental health: Stable schedules reduce employee stress and anxiety, leading to better sleep quality and overall wellbeing. This can result in lower healthcare costs and improved workplace morale.
Challenges
- Increased labor costs: Employers must pay premium rates when making last-minute schedule changes, which can impact the bottom line, especially in industries with thin profit margins.
- Reduced flexibility: The requirement to post schedules weeks in advance can make it harder to adjust staffing levels to match unexpected changes in business demand.
- Administrative burden: Tracking and implementing predictability pay requires additional oversight and may necessitate new scheduling software or systems. (We know a platform.)
- Complexity in multi-jurisdiction operations: For businesses operating across different cities or states, managing varying predictability pay requirements can be complicated and time-consuming.
- Training requirements: Managers need additional training to understand and comply with predictability pay rules, adding to operational costs.
Despite these challenges, many businesses find the benefits of predictable scheduling and predictability pay outweigh the costs. The key is implementing these policies thoughtfully, with clear communication and systems that work for both the business and its employees.
How Can Businesses Ensure Compliance with Predictability Pay Laws?
Implementing predictability pay isn’t just about following regulations—it requires a comprehensive approach to workforce management. Businesses should document all scheduling procedures, creating easy-to-follow guidelines for managers making schedule changes and outlining processes for employee consent. These policies should also address how to handle emergencies and unexpected situations while maintaining compliance with fair workweek laws.
Once these policies are in place, provide supervisors and managers with comprehensive training on fair workweek laws and proper scheduling practices. Conduct regular refresher training sessions to help ensure everyone stays current with requirements and any legal updates.
Communication is equally important for successful implementation. Establish clear channels for schedule communication and create systems for employees to acknowledge receipt of schedules and report potential violations. Maintaining open dialogue about scheduling needs helps prevent issues before they arise and creates a more collaborative workplace environment.
Carry out regular compliance audits to stay on track. These reviews should examine scheduling practices, check for patterns of non-compliance, verify proper premium payments, and address any identified issues promptly.
While implementing these measures requires significant effort, businesses that embrace comprehensive compliance practices often find they create a more stable and productive workplace. The key is viewing compliance not as a burden but as an opportunity to improve operations and employee satisfaction. With proper systems, training, and communication in place, businesses can navigate predictability pay requirements while building a stronger, more engaged workforce.
How Paycor Helps
Lastly, businesses should implement robust scheduling software that makes complying with predictable scheduling laws easier. Paycor Scheduling Software allows you to set scheduling rules for different positions by limiting the number of hours employees work and establishing minimum rest times. And predictive work scheduling configurable warnings and notifications help your managers and employees by reducing last-minute changes.
To ensure compliance with fair workweek laws and other payroll and tax laws, consider Paycor, a leader in compliance. Learn why more than 30,000 businesses trust us with their payroll needs. Take a guided tour today.