Massive changes to service industries hang in balance

Evan Semón Photography

Restaurants and retailers say that flexible scheduling is necessary for their operations and attractive to their employees. Labor advocates say that the practice is destructive to the health and finances of workers, particularly single mothers.

And on Thursday, legislators will be asked to weigh in on the issue, by determining whether the idea of flexible scheduling in the restaurant, retail and food-and-beverage manufacturing industries must go away, to be replaced by the growing concept of “predictive scheduling.” At stake, leaders in those industries say, is nothing less than a potential complete overhaul of business models in some of the state’s largest sectors. 

Under House Bill 1118 — the Fair Workweek Employment Standards bill sponsored by Democratic Reps. Emily Sirota and Serena Gonzales-Gutierrez of Denver — employers in those sectors would be required to provide workers their schedules at least two weeks in advance. The addition of any hours would require businesses to give an extra hour of pay to those workers, while the significant reduction of hours, even in the event of natural occurrences like snowstorms, would come only with extra hours of pay for each affected worker as well.

The House Business Affairs and Labor Committee held a nearly six-hour hearing on the proposal on Feb. 16, postponing a vote on HB 1118 until this week. But while it cast no verdict on the measure, both Republicans and some Democrats on the committee, which features a 7-4 Democratic majority, showered questions on sponsors about potential consequences from such a major rule change.

In addition to requiring firm schedules at the risk of financial penalties, the bill requires affected employers — those with at least 250 workers in their umbrella of companies or in a national chain to which local franchisees belong — to offer newly available hours to part-time employees before hiring someone else to fill them, at risk of significant penalties. It requires extra pay for any worker required to start a new shift shortly after ending a previous one, prohibits retaliation against workers using their new rights and allows aggrieved workers to sue.

Supporters of the bill argued that workers in the industries are required too often now to work last-minute shifts that mess with childcare, work unhealthy “clopening” shifts that stack closings on top of openings of shops and burn out frequently, leading to high turnover rates. Citing studies from The Shift Project at Harvard University, backers like Towards Justice policy director Nina Di Salvo said that workers on unpredictable schedules are twice as likely as other workers to experience hunger and that 71% of such workers want stable schedules.

Sophie Mariam, labor policy analyst for the Colorado Fiscal Institute, said that studies also have shown predictive scheduling reduces turnover, which cuts business costs and boosts sustainability at a time of labor shortage.

“It’s no free lunch. Businesses will bear costs in the short term to change their practices,” Mariam said. “But they will benefit in the long term.”

Business leaders, particularly those in the restaurant industry, said, however, that the costs not only will be larger than anticipated but that the workers they employ don’t want such changes.

Chris Brown, vice president of policy and research at the business-focused Common Sense Institute, estimated the direct cost of compliance for a business with 250 workers will be between $2,200 and $5,800 per employee per year, totaling as much as $1 million annually. Those costs will occur when shops and eateries must pay more to bring in workers when others call in sick, must eat new expenses rather than closing early when business is slow and must change their operational tactics, he said.

The state of Oregon and several large cities — including New York, Chicago and Seattle — have passed similar laws, and Sirota noted that there has not been a rash of business closings or layoffs there because of the rules. Brown, however, said that studies done in several of those cities have shown that affected employers offer fewer shifts, less part-time work and less flexibility in allowing workers to switch shifts.

A survey of companies that could be affected by the new rules that the Colorado Restaurant Association conducted this month found that 95% are likely to schedule fewer hours per shift and 92% are likely to reduce worker hours so they don’t have to pay to send people home early, president and CEO Sonia Riggs said. It also found that 95% of owners would be less likely to hire workers who need more flexible scheduling, such as students or single parents.

Dana Rodriguez, the James Beard Award-nominated owner of Denver restaurants like Work & Class and Super Mega Bien, is a Mexican immigrant known for offering benefits above the industry norm and supporting her workers. But Rodriguez told committee members that the bill, which would require written approvals from workers for any trading of shifts, is not something that her staffers want as much as they want the flexibility that restaurants offer.

“I’m here to ask you to help our employees have a better life. The better life is when people let us run our businesses because we’ve been in this business for so many years,” Rodriguez said in asking the committee to kill the bill. “Sometimes we try to become heroes to help other people, but we don’t understand the consequences of what we’re trying to do.”

To emphasize that point, the CRA on Monday sent a letter to members of the House business committee that was signed by 640 restaurant workers — including servers, bussers, dishwashers and cooks — decrying the “horrible impact” the bill would have on them. In it they argued that the bill would make scheduling inflexible and would hurt their ability to do things like work last-minute double shifts to earn extras money or drop shifts to get to parent-teacher conferences that are scheduled in a short window.

A coalition of some 65 business groups, ranging from the Colorado Chamber of Commerce to the Colorado Brewers Guild to the Colorado Association of School Executives, has formed to fight HB 1118, saying it would drive businesses out of state and hurt economic competitiveness. Colorado Chamber President and CEO Loren Furman called the bill “the most punitive of its kind in the country,” and pointed to surveys showing it could cost jobs and result in less flexibility.

Up against that group is the Colorado Fair Workweek Coalition, an organization of some 30 groups such as the ACLU of Colorado, the Colorado Education Association and United Food and Commercial Workers Local 7. It argues that workers with unpredictable schedules suffer in areas from increased stress to an inability to schedule medical appointments.

There is disagreement over exactly how many workers could be affected by the new rules if the bill were to pass. The Colorado Fair Workweek Coalition estimated a number as high as 450,000 across the state, while the nonpartisan Colorado Legislative Council estimated a number closer to 329,000 — or 13.9% of the state’s workforce.

Republicans appear united against the bill. Several Democrats on the committee — notably Reps. Javier Mabrey of Denver and Sheila Lieder of Jefferson County — seemed to lead the charge for it during the hearing. But others questioned proponents’ assertions, with Rep. Judy Amabile of Boulder asking if workers aren’t already more powerful when there are two job openings for every unemployed Coloradan and Rep. Lindsay Daugherty of Arvada asking why businesses didn’t already do this if it was so great for their retention and bottom lines.

Restaurant owners pushed back on the assertion that HB 1118 would affect only big businesses and chains. Bobby Stuckey, owner of Boulder-based Frasca Hospitality Group, said someone could qualify under the employee threshold by operating as few as four restaurants.

Sponsors, meanwhile, said that service industry employers should take more financial responsibility to ensure that workers know how much they will be working and how much they will be paid.

“We think there should be burden shared between employer and employee in running that business and that the burden shouldn’t fall only on lower-wage workers,” Sirota said.

The bill is scheduled for a vote on 1:30 p.m. Thursday, when the committee meets in House Committee Room 112 at the Capitol.