Tuesday, November 21, 2017

Cuomo’s employee scheduling rules: A dangerous overreaction

I’m sure you know someone who worked at a national chain retailer and was frustrated by that employer’s scheduling practices. They’d swear that some of the theories encouraged in Retail Management 101 centered on on-call or last-minute scheduling whereby some bosses don’t provide a worker’s schedule until the day before -- or even minutes before -- the shift.

It’s a problem, for sure. But it has always been one addressed by the workers. If they didn’t like it, they quit.

Scheduling is one of the primary reasons the retail industry has the highest turnover rate in the US economy – even higher than the fast food sector’s. Hourly store employees have a turnover rate of 65% while fast food workers turnover at “only” 50%. 

Despite those numbers showing free markets working as they should (an employee is not bound to an employer and vice versa), Governor Andrew Cuomo thinks that New Yorkers have no power or chance to make such decisions.

So, in September, he commissioned the Department of Labor to hold special hearings about employee scheduling in response to those long-held practices. A couple of weeks back, the DOL issued its suggestions to which Cuomo has given his full backing.

As with any public policy coming out of Albany of late, it overreacts to an issue and produces rules and laws that will do more harm than good while affecting the economy as a whole rather than the narrow scope for which those policies were intended.

Now, all private sector employers like manufacturers, doctors, entertainment venues, restaurants and the targeted retailers will be saddled with overwhelming standards for scheduling of hourly employees (interestingly, public sector workplaces are not included in the proposed regulations).

The new rules would mandate 14 days of advance notice for work schedules. If a worker has to be called in outside of his schedule, he would receive an extra 2 hours of pay. If an employee’s shift is cancelled, and notice is not given within 72 hours of that, she is entitled to receive 4 hours of show-up pay.

The State does allow employers an escape clause for “Acts of God” (cancellations due to hazardous weather and power outages) and some circumstances beyond the employer’s control (which aren’t clearly defined) but overall they do not allow the employers “flexibility” -- the incredibly misleading buzzword that keeps appearing in the State’s press releases for the standards.

If anything, it gives employers inflexibility and makes New York’s already unwelcoming business climate even more depressing.

Consider the following:

Suppose a golf course wants to schedule their grounds crews, service personnel and cooks. Under Cuomo’s plan, they have to set it in stone 2 weeks in advance.

A golf course’s business activity is not linear – its goes up and down with the weather. A sunny day brings in the golfers; while rains keep customers away. There is no weather forecaster who can predict with any certainty 2 weeks out (some would question whether they can predict 2 days out).

But, the golf course will have to conform to this new rule, plan staffing 2 weeks out and hope to God that they know the weather 72 hours in advance or they will be paying show-up pay to every one of their employees. For the period of the rains, they will have almost no revenues, but will incur costs that they never had to before.

Those costs will appear with regularity (imagine if subsequent summers are as wet as 2017’s) and, of course, will have to be passed on to customers with higher greens fees.

This scenario doesn’t even fall under the “Act of God” allowances because the business was not forced into closure and some duffers will venture out sans carts, so it’s not as if there was no business activity -- and showers are not considered a weather emergency.

How about a larger doctor’s office such as a communal practice or an urgent care facility? What if one of the staff catches sickness from a patient and is out of commission?

That doctor will have to call-in someone who had been scheduled off – and for each day in the 72-hour notification cycle that person works, the doctor will have to pay her the 8 or 10 hour wages plus 2 hours of call-in pay. Where do those added costs go? In higher fees to patients and insurers.   

Or, what happens if I have a breakdown at Confer Plastics and a machine is not making products or money and 15 people have to be kept home?

Is that an issue beyond the employers’ control? Yes.

But in the world run by government bureaucrats it’s a “maybe” or “no”. I could get in a disagreement with a Department of Labor administrator who could say it is in my control because, in their view, I hadn’t done proper preventive maintenance, I should have had a $20,000 part sitting on a shelf, or I didn’t try to find replacement work. You see, it’s all in the eye of the beholder.  

The Department of Labor’s new proposals are an overreaction and an absolute danger to business and, ultimately, the consumers who pay for their products or services. There is a chance to change them, though. The DOL is accepting public comment through December. If you are concerned about your bottom line, drop them a line at  hearing@labor.ny.gov.         

From the 27 November 2017 Greater Niagara Newspapers

No comments: