Labor compliance issues have long plagued the retail supply chain, from sourcing to brick-and-mortar employee operations.
Consider the tragedy at the Triangle Shirtwaist Factory in 1911, perhaps one of the most well-known labor compliance fiascos in the retail industry’s history, which was a direct result of abhorrent worker conditions.
Thankfully, compliance issues of this caliber no longer happen in the United States. However, at the other end of the supply chain, hourly paid retail workers are getting labor’s short end of the stick. According to Deputy’s United States of Shiftwork index, U.S. shift workers work nearly half (48 percent) as much as full-timers. Shift workers clock-in 85.4 hours on average, per month, in comparison to the full-time equivalent of 164 hours.
This massive difference in hours worked is likely because of retailers’ requirement to adhere to predictive scheduling and other labor laws that protect workers against receiving unfair pay. Fair Workweek laws are cropping up across major cities, including San Francisco and New York, which enforce overtime pay in excess of 40 hours per week. This makes labor compliance incredibly complex for retailers that schedule workers far below the 40-hour maximum to ensure no overtime pay.
Is All ‘Fair’ in Retail and Labor?
Retailers have a laundry list of federal labor regulations that they must comply with, or else face fines and other penalties. A few of these include:
- ensuring workers receive appropriately timed meal and rest breaks, and overtime pay;
- filing, processing and approving unemployment and workers’ comp claims; and
- tracking employee scheduling across the business to ensure compliance with Fair Workweek laws.
Shift workers, or paid hourly workers, comprise two-thirds of the working population globally, and the numbers continue to grow. This means that shiftwork-heavy workforces (e.g., retail) must ensure they're fully compliant with labor regulations at the local and national level. For example, retailers must publish work shifts seven days to 14 days in advance unless there are employee-initiated changes.
Labor Complexity in Today’s Retail Market
This comes as no surprise: Deputy’s shiftwork index found that American shift workers, on average, per month, are working 85.4 hours, while scheduled for 86.2 hours. The data illustrates how retailers and other shiftwork employers are remaining compliant with scheduling and workforce laws.
The complexity of these laws, however, is coercing retailers, including Amazon.com, to rethink their scheduling strategies. For example, Amazon recently made headlines for labor disputes fueled by a lack of benefits and overall treatment of employees in Sacramento, Calif.
Target has also been featured in recent labor headlines after eliminating night shifts in select stores. Employees are finding it difficult to keep up with their workloads given the change, and with the holiday season upon us, Target needs to find a quick way to fix its workforce and in-store operations problem.
One strategy both Amazon and Target are employing is ensuring a diverse shift workforce. Deputy found that despite the fact that baby boomers are aging out of the workforce, they're still a core participant in shiftwork. Boomers work per month, on average, 91.7 hours, which is nearly 20 hours more than Gen Z (73.7), and on par with millennial (93.2) and Gen X (94.7) hours worked.
Retail’s Workforce of the Future
Implementing the right technology to manage shiftwork staff is a solid first step toward labor compliance. While the retail industry often discusses new tech advancements in the context of the consumer experience, it should also focus on how these technologies can improve workforce management and scheduling.
Labor compliance should be a core focus of any company’s retail operations, and if it’s not, the consequences could be quite expensive.
Ashik Ahmed is the CEO and co-founder of Deputy, a workforce management solution.