You've seen the news stories every year around the holidays, highlighting the brisk pace required to pick all those e-commerce orders, particularly in Amazon warehouses. Some reports have alleged that workers are skipping meal and restroom breaks to meet their targets.

Well, among the piles of stories about supply chain disruptions you may have missed a piece of legislation that was passed in California a couple of weeks ago. Assembly Bill 701, which is waiting on the Governor to sign it into law, outlines the following:

  • Productivity quotas may not come at the expense of health and safety standards for workers
  • Current and former workers will have more legal recourses to challenge any action taken by employers on the basis of worker productivity
  • Companies who operate warehouses and distribution centers must provide individual performance data and productivity targets to state and local enforcement entities

Amazon has received the most publicized criticism of its safety record that is more than twice the industry average, depending on the source. As other companies look to keep up, there is logical concern that productivity targets tied to compensation may lead to less safe work environments.

During this time of unprecedented demand, rising costs, and half a million open warehousing jobs, being able to track and manage productivity is a critical requirement to ensure service levels are being met without negatively impacting margins. It's becoming increasingly important that these programs are not only in place, but are designed, implemented, and continuously refreshed to ensure health, safety, while also leading to desired results.

This California law may open the door to similar legislation in other states or municipalities with distribution hubs. Companies therefore need to be prepared to adapt in several ways:

  • Shore up existing productivity and incentive programs, ensuring justification is sound
  • Ensure training programs and employment documents clearly outline expectations, calculations, and conditions of any productivity measurement program
  • Look for opportunities to add automation to existing and new operations, lessening dependency on manual labor and associated health and safety challenges