Exclusive Commentary

Address Working Poverty by Promoting Work Hour Security in Low-Wage Hourly Jobs

Anna Haley-Lock, Charlotte Alexander, and Nantiya Ruan - Posted on March 31, 2014


President Obama and Democrats have made raising the minimum wage the centerpiece of efforts to assist the working poor by improving job quality. While this focus is understandable, the less-discussed issue of work hour (in)security deserves comparable attention. Low-wage, hourly workers often struggle with inadequate and unstable work hours, producing a reality of low pay that goes beyond hourly wages.

Work hour insecurity is caused by an array of employer staffing and scheduling practices. Employers increasingly offer part-time positions that do not promise a specific number of hours per week. Up to half of low-wage, part-time hourly employees, and one-third of full-time ones, want more hours than they get. As of February 2014, over one million workers in America held part-time jobs because more hours were unavailable, and since 2006, the retail and wholesale sector – a major employer of low-paid workers – has cut one million full-time jobs while adding 500,000 part-time ones. Major retailers have shifted from employing 70 to 80 percent of workers in full-time status to categorizing at least 70 percent of jobs as part-time.

Work schedule variation and unpredictability have also become the norm. Using “just-in-time” scheduling, many service sector employers post schedules at the last minute and change them thereafter, aided by scheduling and sales monitoring software that tracks customer traffic fluctuations. Nearly 60 percent of hourly workers face weekly changes in work shifts, days, or both, and 20 to 30 percent of workers experience layoffs or reduced hours during slow periods. In some cases, employers even require workers to call in for hours rather than being formally scheduled. These practices enable firms to use hours as shock absorbers to control costs.      

The federal wage and hour law, the 1938 Fair Labor Standards Act, does not regulate employers’ scheduling practices. At the state level, however, a little-known policy tool addresses one aspect of work hour insecurity. California, Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Oregon, Rhode Island, and Washington D.C. have “reporting pay” laws requiring firms to pay a guaranteed number of hours per shift, even when an employee is sent home early, discouraging just-in-time scheduling and smoothing workers’ hours and income.

These existing reporting pay laws vary in the number of hours of pay a worker must receive per shift (from one to four), the wage at which those hours are paid (a worker’s current rate or the legal minimum), the industries exempted from coverage, and the circumstances under which covered employers can avoid payment. Ultimately, however, they tend to impose relatively light financial penalties, which employers may choose simply to absorb in order to continue enjoying the staffing flexibility and labor cost savings afforded by just-in-time scheduling.

The laws’ impact also depends on enforceability. Though little is known about reporting pay compliance, there is reason to suspect nontrivial levels of violation and minimal enforcement. Compliance requires businesses to track complex details about employees’ worked and non-worked hours, about which firms may honestly err. Further, inadequate state agency resources have shifted the enforcement burden onto workers themselves. Lack of time, money, and legal knowledge; language barriers; undocumented immigration status; and fear of employer retaliation may pose significant barriers to low-wage workers exercising their reporting pay rights.

Reporting pay laws also fail to guard against several adverse employer reactions. To avoid having to pay to send workers home, some employers may “jump the gun” and cut workers’ hours far in advance. Alternately, they may eliminate formal schedules or minimize the number of pre-scheduled employees and make workers instead “call in” to pick up hours as they become available.  

If U.S. welfare policy is to be effective in encouraging economic self-sufficiency, it must not just move people into jobs, but into good jobs—and there’s much room for improvement in the overall quality of lower-skill jobs. While, on balance, reporting pay laws represent a step in the right direction, these protections can and should be bolstered and expanded. We propose that states strengthen their existing laws by eliminating loopholes and increasing penalties for last-minute cuts in workers’ hours, and that additional states adopt robust versions of reporting pay mandates. We also call on state agencies to prioritize reporting pay enforcement. Finally, businesses should do their part in alleviating working poverty by curtailing just-in-time scheduling and injecting more security into workers’ hours and income.

To print a PDF version of this document, click here.

Anna Haley-Lock is an Associate Professor in the School of Social Work at the University of Wisconsin – Madison.

Charlotte Alexander is an Assistant Professor of Legal Studies in the Department of Risk Management and Insurance at Georgia State University’s Robinson College of Business, with a secondary appointment at Georgia State University’s College of Law.

Nantiya Ruan is the Lawyering Process Professor and Director of the Lawyering Process Program at the University of Denver Sturm College of Law.
   

The views expressed in this commentary are those of the author or authors alone, and not those of Spotlight. Spotlight is a non-partisan initiative, and Spotlight’s commentary section includes diverse perspectives on poverty. If you have a question about a commentary, please don’t hesitate to contact us at commentary@spotlightonpoverty.org.

If you wish to submit for consideration a commentary to Spotlight, please visit our commentary guidelines and submission page.