Senator Elizabeth Warren (D-MA) recently announced a plan that unintentionally makes it harder for workers and businesses to thrive: the Fair Workweek. Designed to give employees more stability in their work, the fair workweek has been proposed as a way to solve unpredictable hours within the restaurant and retail industries. Yet as evidence shows, Warren’s “solution” adds more problems than it fixes.
Rising in popularity, fair workweek laws require businesses to post employees’ schedules two weeks in advance. Already implemented in cities like Philadelphia and San Francisco, most fair workweek laws also prohibit businesses from “calling-in” employees within a seven days’ notice and bans an employee from working two shifts within an 11-hour period. While in theory these changes sound great, fair workweek violations can add up for restaurants and retail stores.
In Philadelphia, businesses must pay $1,000 if they fail to give hours to current workers over new hires. In San Francisco, if a shift is changed with less than seven days’ notice, the employer must pay the employee up to four hours’ worth of pay. And in New York, firms must pay a $500 dollar fee for every employee they “call-in” within a 72-hour notice. Unsurprisingly, our research shows that with such stringent regulations, the fair workweek could cost the nation “$44 billion in economic output and a loss of a half million jobs.”
And while scheduling employees two weeks in advance might seem like it’s an easy change to implement, as anyone who has worked in the service industry would know, it’s never that simple.
Anything from a concert happening downtown, to a sports team going to playoffs, or even people staying home sick due to flu season, countless reasons could cause a restaurant or a retail store to be packed one day and dead the next. Since businesses are unable to accurately predict events outside their control, should they be the ones punished if they scheduled fewer employees than they thought they needed? Yet, as fair workweek laws would have it, businesses would be penalized if they sent people home when it’s slow or would lose money by not having enough staff when it’s busy.
In fact, as business operations become stricter due to the fair workweek, it should come as no surprise that businesses start to make decisions that come at the expense of the very people fair workweek laws are supposed to help.
To avoid paying fines, businesses were found to be less accommodating to employees’ needs after San Francisco passed their fair workweek law. A study from the Employment Policy Institute found that 35 percent of businesses offered less flexibility to their workers, while 19 percent scheduled fewer employees per shift. Yet, people finding work might be hit the hardest, as 17 percent of businesses offered fewer jobs across the board.
This should come as no surprise, as labor regulations are often counterproductive. In California, lawmakers have reclassified ‘independent contractors’ as ‘workers,’ which threatens to put thousands of drivers out of work; while in Seattle, workers took a pay decrease after the city increased its minimum wage. So it goes, as 64 percent of restaurant staff say flexibility is one of the most important parts of their job, the fair workweek unduly hurts the very people it intends to help.
The attempt to provide better working conditions for workers is admirable, but misguided. Under a fair workweek law, businesses would be unjustly penalized for circumstances outside their control. Even worse, Warren’s plan would decrease employee flexibility and reduce available positions for new hires.
Despite its name, there’s nothing fair about the fair workweek.
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