Colorado restaurants face new scheduling regulations

Colorado restaurateurs face the most restrictive service bill in the country. The Fair Workweek Employment Standards bill, or HB23-1118, aims to provide scheduling predictability, but in reality it will end scheduling flexibility for 260,000-plus foodservice workers and create penalties for employers who change schedules, whether or not they make the changes at employees’ request. 

Operators say the unintended results could damage restaurants as well as their relationships with employees and customers.

"It would not just hurt the restaurant, but hurt my ability to be there for both my guests and my team," said Emily Storie, a manager at Snooze A.M. Eatery's Westminster, Colo., location. "[The bill] takes away from the benefits people come to the restaurant industry for in the first place, and my employees want flexibility."

The crux of bill requires restaurants, as well as retail and manufacturing businesses, to give set schedules 14 days in advance, and once posted, most shift changes will result in financial and administrative penalties for the employer. Schedules can’t be changed unless two employees put down a swap in writing, or the whole staff is emailed about an open shift, which, when someone calls out sick, isn’t practical. Employees can sue a business if they feel like they were punished with bad hours, and they can file a complaint if they aren't getting the schedule they want. 

The rules would apply to any restaurant, food truck, and snack-serving coffee shop or bar in Colorado, although under proposed amendments the requirements would only apply to foodservice establishments with 250 or more employees.

Each scheduling change must be documented and the records saved for three years. That means screenshots or similar records would have to be made of workers swapping shifts via text message or social media direct message, or else face penalties down the line.

Storie said the added red tape would mean spending less time supporting her staff and more time in the office. She said the extra paperwork could also lead to burnout, a problem already plaguing the industry. 

"We value work-life balance, for me and my Snoozers [employees], so that our lives aren't consumed by work," she said, adding that the company already posts schedules 14 days in advance. "[The employees] want a manager that's present, they don't want to be restricted by bills and laws that are supposed to be for them."

For Daniel Ramirez, who runs Ramirez Hospitality Group in Littleton, Colo., the bill would not just add unwanted restrictions, it would cost him around $150,000 a year to hire staff to make sure everything at his four, soon to be six, Los Dos Potrillos restaurants are complying with the proposed regulations. It also could change how he opens future concepts. Based on the current language of HB23-1118, his small company would be treated as a large corporation, on par with national and global chain restaurants. That means if someone wanted to work a double shift, he would have to pay time-and-a-half for the  hours of the second shift.

"We run with super low margins, and us restaurateurs find a way to make it work, but the majority of restaurants will have to increase prices to make up for those costs," he said, mirroring others' statements about how his staff also value the flexibility the bill is trying to take away. "My employees love the flexibility, such as having the ability to work Monday through Thursday, open to close, and then have the weekend off."

Sponsors of the bill, state representatives Serena Gonzales-Gutierrez and Emily Sirota, as well as senators Julie Gonzales and Faith Winter, informed Colorado Restaurant Association president and CEO Sonia Riggs that they had been working on the bill with union lawyers for almost two years, but the CRA didn't hear about it until January 3, 2023. The non-profit trade association was given one day to look at the 33-page legislation and make comments, which, didn't leave CRA lawyers enough time to go through it, Riggs said.

"They said they are helping people who want more predictability, looping in retail and manufacturing and trying to rope it all into one bill," said Riggs. "They didn't pull anyone from our side [to discuss it]." 

Six weeks later, on February 16, there was a seven-hour House Business Affairs & Labor Committee hearing where more than 70 restaurant owners and employees testified in opposition, explaining how this bill would essentially destroy their workplaces and/or businesses. By the end of the hearing, the bill was "laid over for action only," meaning no further community comments will be heard. While it's not yet an actual law, it's closer to becoming one. 

Currently similar scheduling laws are in effect in major cities including New York, Seattle, and San Francisco, as well as the state of Oregon, where the Fair Work Week Act  was signed into law in June of 2017. While the Colorado bill takes language from those existing laws, it's far more restrictive than any of its predecessors because it applies to all restaurants with 250 or more employees, and it identifies a chain restaurant as any concept with two or more locations.

By contrast, the scheduling mandates in Oregon and Seattle only apply to companies with 500 or more employees. The New York and San Francisco regulations identify chains as concepts with 30 or more locations, and small franchisees that don’t hit the 500-employee threshold are excluded.

"There's no way for us to really predict how it will effect Colorado businesses, because we have never seen something this restrictive," said Riggs, who added that the CRA knows that one goal of this bill is to further spread legislation like it nationally. "I will tell you, if it passes it will be devastating to the restaurant industry."

Like the rest of the country, the dining scene in Colorado has not fully recovered from the challenges of the past three years. Restaurant owners still struggle with pandemic-related debt, inflation, worker shortages, and supply-chain issues. According to a February survey of almost 200 Colorado restaurants by the CRA, if HB-1118 becomes law, 97% of businesses will raise menu prices to offset compliance costs, 95% will stop hiring individuals who require flexible schedules, and around 92% are likely to trim employee hours. Restaurants estimate that compliance could cost an average of $70,000 per year per location.

Ramirez said if this happens his whole business model could change. Right now he is working on opening the group's first fast-casual dining spot, which in general takes fewer people and doesn't necessarily require the same hospitality skill set that his other, full-service restaurants do. 

"This whole counter service thing, we will have to see how it goes, especially if the bill passes," he said over the phone. "The bill is taking hospitality out … when you go to the counter-service model, it's more what does the restaurant look like and is it Instagram friendly, instead of the employee and customer relationships." 

So far HB-1118 hasn't passed the state House Business Committee, but the CRA predicts it will hear something on it soon, possibly this week. There's hope that major amendments are made, or the bill gets tabled until the committee can rewrite a more balanced one. 

"Hopefully it fails and it opens the doors to conversation on what can be done to help instead," Storie said. "I don't think they have thought all the way through in the writing of this bill. They think, 'Oh it's great, someone will make extra money,' but we will just run short staffed if we have to, in order to survive and open our doors."