Wage and Hour

Just-in-Time Scheduling—Good News and Bad News

Just-in-time scheduling is attractive to many employers, says attorney Charlie Plumb, but it’s not without its pitfalls. And the same goes for the related challenges of show-up pay and on-call pay.

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Plumb, a shareholder at McAfee & Taft in Tulsa, Oklahoma, offered his guidance at BLR®—Business and Legal Resources’ Advanced Employment Issues Symposium held recently in Las Vegas.

Just-in-Time or Call-In Scheduling

Just-in-time or call-in scheduling (or “call-in shifts”) usually involves the establishment of a tentative work schedule; the employee then learns via e-mail, text, or telephone call when or whether to physically report to work.

Employers like it because it gives them a 24/7 workforce and built-in “right-sizing.” It is most commonly used in the retail, food service, restaurant, and hospitality industries.

Issues Raised for Employers

Employers should consider the following related to just-in-time practices, Plumb suggests:

  • You need a sophisticated and accurate timekeeping system, says Plumb, that can manage fluctuating hours of work and can handle the distinction between hours originally scheduled and hours actually worked.
  • You need to determine eligibility to participate in benefit plans when eligibility is determined by the number of hours worked per week or by classification as part time or full time.
  • Call-in and on-call. You have to determine whether “call-in” or “on-call” status should be compensated or treated as hours worked.
  • Paid time off (PTO)/sick. You may encounter increased use of PTO and sick leave by employees.
  • Employers who “over-hire,” that is, who have a large, ready workforce available, but limit hours actually worked by each employee, usually suffer because:
    • Employee turnover increases
    • Unions become more attractive

Some employers—Starbucks and Walmart among them—are revisiting their “just-in-time” scheduling practices, Plumb notes.

Impact on Employees

Variable, just-in-time scheduling predominately affects nonexempt, lower wage employees. Consider the following impacts, Plumb advises:

  • It tends to reduce number of hours worked by each employee, and may be viewed as “Part-time work, but full-time availability.”
  • Fluctuating swings in weekly paycheck make financial planning difficult.
  • Complications with unpredictable (and last-minute) work schedules increase “work family conflict” and increase work stress, especially for single parents or families where both spouses work. For example:
    • Child care arrangements
    • Continuing college/education
    • Planning transportation to a job
    • Working a second job
    • Interference with family life

Some surveys have indicated that variable work schedules result in job dissatisfaction and lack of loyalty, Plumb says.

Variable Work Schedule Legislation

“Fair Shift Scheduling Legislation” has been introduced (but not passed) in at least 10 states during the last 2 years.

Eight states and the District of Columbia have “Reporting Time Pay Laws.” These laws generally require employees to be paid a minimum number of hours, if they “report to work,” regardless of whether any work is performed. One critical question, says Plumb, is what constitutes “reporting to work”? Is it physical presence, signing in online, calling supervisor?

The federal Schedules That Work Act was introduced in U.S. Senate July 15, 2015, and is currently in committee. If nothing else, it gives a flavor for what’s happening in paid leave. It would require 2 weeks’ notification of work schedule and pay for on-call status even if no work was performed.

It would also require that employees be paid when sent home earlier than scheduled and when the schedule is changed with inadequate notice.

As examples, here are the features of two city laws:

San Francisco Retail Workers Bill of Rights (July 3, 2015)

The main features of this law are:

  • Applies to retail with stores in 11 or more states and with at least twenty employees in San Francisco
  • 2 weeks’ notice of work schedule
  • Increasing penalties paid to employee if the work schedule is changed
  • Guarantee of 2 to 4 hours of pay for employees on on-call status

Seattle Secure Scheduling Ordinance (September 19, 2016)—effective July 1, 2017

This law covers:

  • Retail and quick service food employers with 500 or more employees worldwide
  • Full-service restaurants with 500 or more employees and at least 40 locations nationwide

The law applies to hourly, nonexempt employees who work at least 50 percent of their time at Seattle locations. It requires, among other things:

  • Good-faith scheduling estimate provided at hiring and annually
  • Estimates of median number of hours to be worked
  • Whether on-call shifts are required
  • Posting of schedule 14 days in advance
  • Scheduling and changing work schedules to involve an interactive process between employer and employee
  • “On-Call Time”
    • 2 weeks’ advance notice
    • Pay half-time entirety of on-call shift, although did not report to work
    • Predictability pay for changes in schedule
  • Hours added or changes in length of shift—an additional hour of pay even if the change did not result in a reduction of number of hours worked
  • Hours cancelled and employee sent home early—half-time for all hours lost or reduced

Variable Work Schedule Litigation

There is also, Plumb says, litigation around on-call status:

  • Casas v. Victoria’s Secret Stores, LLC (California)—Class action seeking $25 million claiming that under California’s law, the call-in requirement amounted to “reporting to work,” and employees assigned on-call status were entitled to compensation. (Victoria’s Secret plans to end on-call scheduling.)
  • New York Attorney General (April 2015)—Notified 13 national retailers (e.g., Target, Gap, Urban Outfitters, Williams Sonoma) that their on-call shifts may violate New York’s reporting time pay law.

Other Litigation

Always be aware, Plumb says, that state law may be different. He offers several more case citations for reference for those who wish to delve deeper into this question:

  • Price v Public Service Co. of Oklahoma, 2016 WH Cases 2d. (BLR) 119160 (N.D. Okla. 2016)—Electric utility crew members
  • Jonites v Exelon Corp., 13 WH Case 2d. (BLR) 843 (7th Cir. 2008)—Electric utility linemen
  • Pabst v Oklahoma Gas & Electric Co., 6 WH Cases 2d. 609 (BNA) (10th Cir. 2000)—Technicians monitoring heat, fire, and security systems
  • Dinges v Sacred Heart St Mary’s Hosp. Inc., 5 WH Cases 2d. (BNA) 78 (7th Cir. 1999)—Emergency medical technicians
  • Ingram v County of Bucks, 4 WH Cases 2d. (BNA) 1011 (3rd Cir. 1998)—County deputy sheriffs

Considerations When Implementing a Variable Work Schedule Program

First of all, says Plumb, monitor federal, state, and local laws, and audit your current scheduling practices for compliance with reporting time or on-call status compensation.

In a unionized environment, remember that these issues may already be addressed by Collective Bargaining Agreement or might be a mandatory subject of bargaining.

Also:

  • Pin down why you are considering a variable work schedule:
    • For the employer’s economic circumstance.
    • To respond to customer or client needs
    • To benefit employer needs
  • Review your technological circumstances
    • Communicating to employees work schedule changes and adjustments
    • Employees’ ability to timely and reliably receive the employer’s communication
    • Ability to track all changes for payroll purposes
  • Gain input and ideas from employees and supervisors—Is the plan workable?
  • Issue the formal, written variable work schedule policy.
  • Monitor how it is working, and be prepared to modify.

Scheduling Software

There is software available to help manage show-up, on-call and standby pay, says Plumb. “Workforce Optimization Systems” provide real time information for managers to adjust daily staffing. The systems:

  • Use data-driven algorithms
  • Take into consideration:
    • Prior sales fluctuations or recent trends in demand
    • Economic indicators
    • Weather
    • Sporting or convention events

“Show-Up Pay”

Show-up pay is when employees present themselves for work but are sent home (e.g., for lack of available work). Federal law does not require the payment of “reporting time pay” when no work is performed, says Plumb, but eight states require some minimum compensation for reporting to work.

On-Call and Standby Time

On-call and standby time are when employees are designated to be available for work but may not be called (e.g., utilities, health care, IT specialists).

The federal Fair Labor Standards Act (FLSA) and state laws may require compensation for hours when an employee is on call on the basis of:

  • Whether the employees can use the time for their own purpose
  • How much limit/control the requirement has over employees’ activities
  • Whether employees perform work remotely while on-call.

In determining whether on-call time should be paid, Plumb says the following additional factors have been considered:

  • Historical frequency of being called-in
  • Notification method and freedom
  • How quickly employee must respond
  • Ability to engage in personal activities
  • Collective bargaining agreement, if applicable