The Tension Between Present and Future in Wage and Hour Lawmaking

 
 

Most wage and hour laws set out to benefit and protect workers in some way. The recent wave of state and local predictive scheduling laws and minimum wage hikes is no different. Yet it is critical to assess, and attempt to account for, the possibility that these laws could hasten the demise of the very jobs held by the workers they intend to protect the most.

While opinions differ as to how much or how soon workers will have to adapt to the automation tsunami, this trend seems certain to impact the workplace in myriad ways. For example, a recent study focused on the Indianapolis workforce suggests not only the potential for job loss, but unfortunately, a pronounced impact on occupations disproportionately held by women.

Meanwhile, another trend impacting the American workforce involves more active state and local lawmaking concerning wage and hour issues. Prime examples include minimum wage increases and predictive scheduling laws, which are being proposed and enacted across the country with increasing frequency.

With respect to minimum wage hikes, employers are well aware of the “Fight For $15” movement that started in Seattle in 2012. States like California have joined cities like Seattle in enacting laws that phase in $15 minimum wages. Many other jurisdictions have enacted minimum wage ordinances that soar above the federal $7.25 minimum.

Predictive scheduling laws represent a more recent, but arguably more impactful, trend in the retail and foodservice industries. While such laws (or proposals) vary by jurisdiction, they generally require employers to (1) set work schedules at least two weeks in advance; and (2) pay an employee for a certain number of hours not worked due to a subsequent schedule change. These laws also often restrict whether and when a business may hire part-time labor and impose minimum payments for on-call periods when no work is performed.

While these state and local laws intend to benefit workers in today’s economy, it is fair to question what the longer term net impact of this sort of legislation might be.

Even in the short-term, these laws could run counter to other trends in the American workforce. For example, a great many workers value flexible work arrangements and freedom over concrete work expectations and long-term commitments. On the one hand, laws that require employers to adhere to a work schedule set weeks in advance could promote flexibility through predictability. On the other hand, however, such requirements could get in the way of workers who value part-time work over full-time work or who would strongly prefer to go home early if demand is lower than anticipated.

Looking further down the line, the potential ramifications of these legislative efforts loom even larger. By increasing the threshold cost of labor, minimum wage hikes could make the prospect of reducing labor hours, whether via job automation or other means, far more attractive to certain employers. For example, a study on the Seattle minimum wage ordinance found that workers’ hours are being reduced at a rate that exceeds increased wages, resulting in a $74 reduction in average monthly earnings for workers in low-wage jobs.

Predictive scheduling laws seemingly risk the same brand of unintended consequences. To date, these laws have been concentrated in the retail and foodservice industries, where labor costs oftentimes constitute the greatest expense on an employer’s P&L statement. It is fair to wonder how, over time, employers in these industries will adapt to laws that could require them to incur labor expenses not only for hours worked by their employees, but also for certain hours not worked.

None of this is to suggest a particular view on the wisdom of state and local minimum wage and predictive scheduling laws. Protecting the workers of today is a worthy cause. But so too is accounting for the workers of tomorrow. If these new laws could fuel certain businesses to eliminate or automate jobs, or to shy away from mutually desirable part-time or flexible work arrangements, that creates an issue that both opponents and proponents of the laws should be interested in solving.

There is no clear answer on how to balance and account for these issues; the question is layered with political, policy, and ethical considerations that go beyond the confines of a blog post. What does seem clear, however, is that single-faceted wage and hour lawmaking that focuses only on the workers of today could in fact hinder the workers of tomorrow.

 
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