Report: San Francisco Labor Regulations Hurting Workers

Companies cutting hours, flexibility for part-time workers in San Francisco

June 16, 2016

San Francisco regulations pushed by union organizers to set employee schedules have hurt part-time workers the law was supposed to help, according to a new report.

San Francisco became the first city to pass legislation aimed at eliminating uncertainty in employee schedules in 2014. Under the law employers must give workers two weeks’ notice of their daily shifts. Employers must also compensate employees for shift cancellations by paying several hours of wages. They must pay a fine for any shift cancelled with fewer than seven days’ notice.

Economists from the University of Kentucky and Carnegie Mellon University found that the adoption of fixed schedules for part-time workers at large retail, outlet, and chain stores has hurt workers. The job pool for these workers, a large percentage of whom are students, has dwindled in the wake of the law’s passage. More than 20 percent of the businesses surveyed reported that they were offering fewer part-time jobs; nearly one in five said they had cut back on the number of workers per shift.

"To respond to these new requirements formula retailers are now less flexible with employees schedule changes (35 percent), offering fewer part-time positions (21 percent), scheduling fewer employees per shift (19 percent) and offering fewer jobs across the board (17 percent). As a group, retail clothing businesses are even more likely to be taking these steps," the study says.

San Francisco has pioneered liberal employment regulations pushed by labor advocates. It was the first city to pass scheduling requirements and to adopt the $15 minimum wage pushed by political powerhouse Service Employees International Union. Employers reported that they have had a more difficult time coping with the scheduling requirements than the wage hike, which is more than double the federal minimum of $7.25 an hour.

"One-in-four (27 percent) said the scheduling requirements provided in the formula retail employee rights ordinance, followed by one-in-five (21 percent) who said the minimum wage phasing up to $15 and 13 percent who said the paid sick leave ordinance were the most difficult to deal with," the report found.

Part-time workers have experienced the most dramatic consequences. More than one-in-three businesses said they have reduced schedule flexibility, preventing employees from trading shifts.

Some employers have responded to uncertainty by replacing labor with capital such as self-checkout kiosks in the retail industry and robotic burger flippers in restaurants. More than five percent of businesses surveyed said they were exploring those options because of the scheduling ordinance.

"One-in-twenty businesses say they are going so far as to pursue self-service automated alternatives to hiring employees (6 percent) and reducing customer service (6 percent)," the report found.

The study surveyed more than 50 large retailers and was commissioned by the Employment Policies Institute a free market think tank. The report also reviewed census data and found that only "one in seven (13.9 percent) of part-time workers in San Francisco are estimated to be working that schedule involuntarily."

Michael Saltsman, the think tank’s research director, said the short-term results of the law were predictable and have hurt workers.

"The city's first-in-the-nation inflexible scheduling ordinance is nothing to be proud of. The vast majority of employees affected by the law were working a flexible part-time schedule because it fit their needs—not because they were being forced into it," Saltsman said. "Unfortunately, many have now lost that flexibility as an unintended consequence of this union-backed law."

Published under: California