Campaign News

Oh, what a difference a year can make.

Last July, Federal Reserve chairwoman Janet Yellen endured criticism for House testimony in which she seemed to imply that there was little the Fed could do to address the disproportionately high African-American unemployment rate.

Not so on Tuesday. In her semi-annual testimony to the Senate Banking Committee, Yellen emphasized that the failure of the economic recovery to reach communities of color influences the Fed’s decision-making, and made a strong commitment to improving diversity at the central bank.

“Jobless rates have declined for all major demographic groups, including for African Americans and Hispanics,” Yellen said, according to her prepared remarks. “Despite these declines, however, it is troubling that unemployment rates for these minority groups remain higher than for the nation overall, and that the annual income of the median African-American household is still well below the median income of other U.S. households.”

Yellen’s policy argument has not fundamentally changed. It is the Fed’s job to maximize employment in the economy as the whole, she says, and it lacks the tools to target particular communities. And the Fed chief has clarified since last summer that she takes seriously how the Fed’s adjustment of interest rates can have an especially big impact on African Americans and Latinos, who have higher jobless rates.

But Yellen’s remarks and actions on Tuesday represent the Fed’s greatest demonstration yet that it is putting the concerns of communities of color front and center on its agenda.

The Fed Up campaign, a coalition of progressive groups that has led the push to make the Federal Reserve more responsive to workers in general, and communities of color in particular, was pleased with the focus of Yellen’s testimony.

“Each time since Yellen spoke last July, when she got pushback over what she said, she has gotten a little bit better,” said Jordan Haedtler, Fed Up’s campaign manager. “Now she is proactively showing that the Fed is assessing this data and does take this data into account.”

Diversity is an extremely important goal and I will do everything I can to further advance it.

This week’s hearings, held every six months in both chambers of Congress — the House will hold its hearing on Wednesday — are an opportunity for the Fed chair to update lawmakers about the overall state of the economy. As part of the briefing, the Fed releases an accompanying monetary policy report summarizing its economic assessment and research.

For the first time, the Fed chose to devote a section of its report to whether the “gains of the economic expansion [have] been widely shared.” That section focused on how the recovery affected different races and ethnicities differently.

The results are discouraging. Despite years of job growth, the rates of full-time work for African Americans and Latinos are a few percentage points lower than they were before the recession, while the rates among white and Asian-American workers have more or less reached pre-recession levels. And the median income of black households, which took the biggest hit of any group during the recession, has also been slower to recover, reaching only 88 percent of what it was in 2007, compared with about 94 percent for the other three groups.

Responding to a question about the new section from Sen. Sherrod Brown (D-Ohio), Yellen insisted that weighing the disparate impact of economic growth on a range of different groups is a key part of the Fed’s mission.

“There are very significant differences in success in the labor market across demographic groups,” she said. “It is important for us to be aware of those differences and to focus on them as we think about monetary policy and the broader work that the Federal Reserve does in the area of community development and trying to make sure that financial services are widely available to those that need it, including low- and moderate-income [households].”

Yellen also recognized the importance of diversity — of race, gender, professional background and ideology — within the Fed’s ranks in ensuring the bank remains sensitive to a broad array of Americans’ economic experiences.

She touted her creation of a task force in the Fed to improve its gender and ethnic diversity, but acknowledged there is more to be done.

“Diversity is an extremely important goal and I will do everything I can to further advance it,” Yellen said.

Progressive groups and their allies in Congress trying to make the Fed more accountable to the public have focused on increasing diversity and reducing Wall Street’s influence at the central bank. Eleven senators, including Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.), and 116 House members sent a letter to Yellen on May 12 urging her to prioritize the diversity of Fed officials, especially at the 12 regional Fed banks, which are privately owned. (Hillary Clinton expressed similar sentiments in a statement later that day.)

The makeup of the regional Fed bank boards is important because they are dominated by the big banks and have free reign to appoint their presidents. The regional Fed bank presidents hold five seats on the Federal Open Market Committee, the central bank panel that adjusts the benchmark interest rate. Currently, regional Fed presidents make up half of the FOMC’s influential votes.

As a result, the Fed officials with the power to raise interest rates and effectively increase unemployment are selected by people who are disproportionately white, male and from the finance and business sectors.

In the interests of changing that, the Fed Up campaign on Monday released a slate of 39 candidates for the regional Federal Reserve bank boards of directors. The candidates not only reflect racial and gender diversity, but also come exclusively from academic institutions, community groups and labor organizations.

“On racial and gender diversity there has been modest progress, though it has not taken place at the rate we would like to see,” Haedtler said. Haedtler added that there is even greater room for improvement when it comes to the diversity of professional backgrounds of board members and other top Fed officials, an area where he said there has been “regression” under Yellen’s watch.

By Daniel Marans

Source

The District of Columbia Council scheduled a hearing for Jan. 13 on a bill that would require stores and restaurants to tell employees what their work schedules will be several weeks in advance and require employers to compensate employees for last-minute schedule changes.

“This movement is under way across this country,” lead sponsor Vincent Orange Jr. (D-At Large) said when he introduced the measure Dec. 5. “San Francisco recently passed regulations to address this issue and bills have been introduced in seven states.”

The Hours and Scheduling Stability Act of 2015 wouldn't apply to all stores and restaurants, but it would have a big impact, Orange told Bloomberg BNA Dec. 17. If passed, the measure “will assist tremendously with providing [the district's] workforce and their families with certainty,” the councilmember said.

The bill would require employers to tell workers what their schedules will be at least three weeks in advance. A change in schedule less than three weeks out would require the employer to pay an extra hour of wages. Less than 24 hours' notice would require four hours of wages.

Orange's bill would cover any D.C. franchisee of a restaurant chain with at least 20 locations nationwide or a retail store chain with at least five.

Unpredicatability Affects Planning, Benefits Eligibility

It's hard enough for families to balance work and personal life, Orange said when he introduced the bill. “Having a schedule you can count on leads to a better work environment and better harmony in scheduling family obligations.”

Liz Ben-Ishai, senior policy analyst at the Center for Law and Social Policy, which supports legislation requiring employers to provide workers with advance notice of schedules, told California lawmakers in March of 2015 that volatile schedules affect workers’ ability to arrange child care. Such volatility also interferes with their ability to hold second jobs and pursue education or training, she said.

There's another problem with unpredictable schedules, Ben-Ishai told Bloomberg BNA Dec. 22. Many public assistance programs ask participants to estimate their income or number of hours they will work, she said. “Because they have these erratic schedules or insufficient hours they can't predict how much they'll make,” she said.

Utah is “an example of a good approach,” she told Bloomberg BNA. State eligibility assessors use “professional judgment” to draw on multiple sources of information, including paychecks and conversations with employers regarding anticipated hours and overtime, to determine an applicant's’ eligibility, Ben-Ishai wrote in a policy brief. Utah encourages workers to follow up on information applicants provide that may not reflect their current eligibility, such as out-of-date wage information

Ben-Ishai also suggested a different time frame for evaluating applicants’ incomes and work hours. She pointed to the Child Care and Development Block Grant, which “requires a longer authorization period” and “accounts for fluctuation in people's hours.” This federally funded program allows states to determine eligibility “over a period of 12 months to provide a more realistic picture,” she said.

Bills Introduced Around the Country

The Washington, D.C., bill is one of several under consideration in state and local legislatures, as well as on the federal level. Within the past two years, there have been similar proposals in 13 other cities and states, plus one on the federal level.

San Francisco has been the first and, so far, only jurisdiction to pass a predictable scheduling law. It passed Nov. 25, 2014, by a 10-0 vote of the 11-member Board of Supervisors and became law without the signature of Mayor Ed Lee (D). Lee said he was “concerned about large numbers of impacted merchants who said there was little meaningful discussion” in the drafting of the law (243 DLR C-1, 12/18/14).

Lizzy Simmons, the National Retail Federation's senior director, government relations, told Bloomberg BNA Dec. 30 that the San Francisco law has a “carve-out that allows unions and their collective bargaining agreements to waive out” of its requirements. She said she's concerned that allowing employees to contractually waive the law's requirements grants outsize influence to labor organizations “since a lot of the unions have been behind” efforts to pass predictable scheduling laws.

The San Francisco law actually “takes away and impedes on employee flexibility,” Simmons said. Retail managers and employees should work together to come up with schedules that can accommodate individual needs, she said. “A one-size-fits-all government mandate” makes that harder to accomplish, she said.

Part of the problem with scheduling bills is that there's little guidance on how to implement them, said Robin Winchell Roberts, the federation's senior director, media relations. For example, the San Francisco law exempts employee-requested changes from triggering schedule change compensation, which Roberts calls “penalty pay.” The key factor in determining when an employer must pay schedule change compensation is who requests the change, Roberts said. It isn't clear whether it is due when a retailer requires an employee who can't work a scheduled shift to find a co-worker to work the shift in her place, Roberts said.

The compensation might also be triggered if business is better than expected, Simmons said. For example, a store might want to extend a sale that's going well. If the store wants to staff up to respond to the additional customer demand, it might incur unexpected expenses on account of employees who weren't scheduled, she told Bloomberg BNA. “I don't think you can just say after the fact sales made up for that,” she said when asked whether the unexpected increase in revenue would offset the unexpected increase in expenses.

Flexibility Essential, Industry Group Says

“Flexibility is a trademark of the restaurant industry,” Christin Fernandez, director of media relations and public affairs at the National Restaurant Association, told Bloomberg BNA by e-mail Dec. 23. Businesses operate around the clock “with business models unique to each restaurant,” she said.

Starbucks is an example of a business that pursued its own scheduling model. The company announced in August 2014 that it would voluntarily change its scheduling practices. It said it would provide employees with schedules a week in advance. It also said it would prohibit scheduling employees to close a store one night and return a few hours later to open the next morning (157 DLR A-6, 8/14/14).

But 11 months later, a report by the Center for Popular Democracy, an organization that describes itself as advocating for a “pro-worker” agenda, concluded that the company hasn’t kept its promises. The report, “The Grind: Striving for Scheduling Fairness at Starbucks,” drew on comments from a survey of employees who say back-to-back closing and opening shifts continue. Reached for comment Dec. 22, Brent Gow, global director for payroll at Starbucks, told Bloomberg BNA he couldn’t speak on the record because the company is still working on the issue.

Reporting Time Pay Laws Exist in Some States

Predictable scheduling laws don't take into account that “some of the people that go into these jobs to begin with do it for exactly the flexibility that's being challenged here,” said Diane Saunders, a shareholder in the Boston office of Ogletree, Deakins, Nash, Smoak & Stewart P.C. who advises employers as co-chair of the firm's Retail Practice Group.

Saunders advises her clients to ensure that they comply with reporting time laws that are already on the books. In Washington, D.C., and eight states, employees are guaranteed a minimum number of hours of pay if they report to work but are sent home because business is unexpectedly slow, she wrote in a Novemberblog post.

New York Attorney General Eric Schneiderman's labor bureau chief, Terri Gerstein, wrote to 13 retailers in April 2015 as part of a review of on-call scheduling. In the letters, Gerstein reminded the companies that New York state law requires that an employee who reports for work must be paid four hours, or the number of hours of a regularly scheduled shift if that is less than four hours.

Gerstein told the retailers the attorney general's office had received reports that an increasing number of employers require their employees to call in “just a few hours in advance, or the night before.” Threatening enforcement action over this practice goes beyond what New York law says, said Jim Evans, a partner in Alston & Bird LLP's labor and employment practice who represents employers.

Whether the proposals become law, employers should focus on “the human aspect” of predictability in scheduling, he said. Employers that voluntarily change their practices and lawmakers who draft predictable scheduling laws should consider the “harsh economic consequences” of last-minute shift cancellations, he said.

New Application for Existing Laws

The New York attorney general's letters were sent to companies with household names such as Gap Inc., J. Crew and Burlington Coat Factory. One recipient was Abercrombie & Fitch Co., which is facing a class action in California over its use of on-call scheduling.

In the absence of laws requiring pay for on-call shifts, one team of lawyers is attempting to use wage and hour laws that are already on the books to help their clients. Hallie Von Rock and Carey James, of Aiman-Smith & Marcy, filed a lawsuit in December against Abercrombie & Fitch on behalf of C’endan Claiborne and a class they estimate includes between 15,000 and 65,000 members in three states.

In the lawsuit, Von Rock and James allege that the company's practice of requiring California employees to call in one hour before their scheduled start time in order to find out whether they're required to work the shift should be considered reporting to work. When an employee calls and is told to stay home, the employee is entitled to a few hours of pay, Von Rock and James told Bloomberg BNA.

Under wage and hour laws already on the books, Abercrombie should pay its employees for the time they spend calling in, Rock and James said. The calls last between two and 20 minutes, which adds up to several hours of unpaid wages per month, they said.

Von Rock and James contend that employees—who aren't paid for the time they spend on these phone calls—are reporting for work when they make these calls. “Even though they're not physically showing up” at the store, the phone call is the beginning of a work shift, Von Rock said. Abercrombie, which is represented by Morgan Lewis & Bockius LLP and Vorys Sater Seymour and Pease LLP, denies the lawsuit’s allegations.

James said the law “is undeveloped in California” as to what qualifies as reporting for work under the reporting time law. “To me, report is a straightforward word and it could just as easily mean call,” he said.

Von Rock expressed concern about a power imbalance between employers and employees. Predictable scheduling laws attempt to level the unequal bargaining power, she said.

Simmons, with the National Retail Federation, views it differently. These laws insert friction into the employer-employee relationship, she told Bloomberg BNA. “These bills punish job creators,” the federation says in its restrictive scheduling toolkit. A better approach would be to continue to allow the market to strike a balance, Simmons said.

Common Ground

One thing on which supporters and opponents of predictable scheduling laws agree is that it's too soon to tell what kind of impact San Francisco's law is having. Ben-Ishai, the policy analyst, and Simmons, of the National Retail Federation, told Bloomberg BNA it is too early to have meaningful research.

Evans, the employer-side attorney, offered advice on balancing employers' need for flexibility with workers' need for predictability. “Focus on the human aspect of it,” he said. “I represent large corporations, many of which are very focused on the human aspect of it. I think that the human aspect of the legislation and the impact of the practices can't be overemphasized.”

“It's just not fair to subject people to that last minute change and kind of harsh economic consequences,” he added. “When you measure who has the ability to absorb the impact of a last minute change in schedule, the answer's kind of obvious.”

Source: Clasp

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