REI gives its employees a paid day off on Black Friday, but hourly workers say that it's a 'marketing move' and that the company has strayed from its co-op roots

• REI has closed its stores on Black Friday and paid employees for the day off since 2015 in an initiative called "Opt Outside."
• But retail employees at the co-op say the paid day off is a "marketing move" that doesn't match their experience working there the other 364 days of the year.
• Business Insider spoke to five former and current REI store employees who detailed how the co-op routinely reduces hours so employees can't qualify for holiday pay.
• Some also said REI's wages and benefits had become less competitive with other retailers over the past few years, despite what REI promised them during recruitment.

On October 27, 2015, REI announced a policy that would become the gold standard of ethical Black Friday shopping: Not shopping at all.

In an era where Black Friday sales had stealthily turned into Thanksgiving Day doorbusters, the outdoor retailer would close all its locations, its headquarters, and its distribution centers on the biggest shopping day of the year. The co-op wouldn't process any online transactions and would pay all its employees for the day off.

"Instead of reporting to work, the co-op is paying its 12,000 employees so they can do what they love most – be outside," REI said in a press release. Signs that read "We're closed today. Join us outside" were posted on REI storefronts along with the hashtag #OptOutside.

"It was a big deal," Brian Smith, an REI store employee who works in Portland, Oregon, told Business Insider in an interview. "I remember members and shoppers being very excited about it. We were excited about it."

REI's co-op model, which was started in 1938, means the company is member-owned. The benefits of a $20 lifetime membership include discounts and deals and, for many members, the feel-good experience of shopping their values.

The Opt Outside campaign has similarly helped consumers feel good about shopping with REI. Since 2015, the closures have been an annual tradition for the company — as well as a major marketing point. "Opt Outside" is now a mantra, emblazoned on REI pins and bumper stickers.

But REI employees like Smith say Opt Outside shows only one side of the retailer.

"The reality of working there doesn't match the rhetoric that comes from corporate and that goes out to members," Smith said.

Current and former REI retail staffers told Business Insider that during holiday weeks, managers routinely schedule employees for fewer hours so they cannot qualify for holiday pay. Some said they were frustrated that REI's Opt Outside initiative helped the company remain reputable with shoppers while doing little to retain the respect of employees.

When asked whether REI cuts back employees' hours during holiday weeks, a representative said: "Our holiday scheduling policy has always been about maintaining the highest standard of service for our customers. Practically, we create staffing schedules based on a number of considerations — anticipated customer visits to the store, employee availability, and employee performance. Managers are expected to have regular scheduling conversations with employees about shared expectations."

"They basically used their employees to make a big marketing move," said Carlos Babcock, who worked for 20 years at the REI store in Saratoga, California, but was laid off during the pandemic.

This year, for the first time in a long time, Walmart and Target are joining the major retailers by closing on Thanksgiving Day, which has become an unofficial start to Black Friday. Many said the closures were a way to thank employees, though Thanksgiving doorbusters aren't a major strategy for retailers this year because of the coronavirus pandemic.

Walmart is not paying employees for the holiday, and Target said its hourly employees' eligibility for holiday pay is "based on average hours worked and the length of time a team member has been employed at Target."

Workers say REI adjusts retail employees' schedules to prevent them from qualifying for holiday pay

Employees that Business Insider spoke to at various REI locations across the country said they were familiar with the way the company adjusts employees' schedules during holiday weeks so that they are unable to qualify for paid holidays.

At REI, part-time employees have to work at least 24 hours during a holiday week to qualify for six hours of holiday pay. Full-time employees have to work at least 32 hours during a holiday week to qualify for eight hours of holiday pay. REI recognizes eight paid holidays a year.

That means that during Thanksgiving week, while retail employees do receive pay for Black Friday as a part of the Opt Outside initiative, they often end up with a paycheck that's smaller than usual because their hours were strategically reduced. For some workers, the reduction of their hours means they don't qualify for a paid day off on Thanksgiving.

"REI does a good job of making sure that they schedule people below the threshold to qualify for the holiday pay," Smith said.

A current REI sales lead in the Bay Area who asked to remain anonymous said she had witnessed the practice. "I've been there while managers are writing schedules and talking about it," she said. "The goal for holiday weeks is to pay as little as possible."

A current REI sales manager who also asked to remain anonymous said that managers were asked to schedule people this way, though she added that the way schedules are written varies depending on management teams.

"Usually people have their holiday hours — I don't want to say cut, but very carefully adjusted," she said. "Going over a certain number of hours gets you overtime; if you get scheduled 32 hours or more in a week, you get paid for 40 anyway without working 40. This is expensive on payroll, so REI might schedule you, like, 31 hours just so that doesn't happen. When I was a staff person, I did not appreciate being scheduled 31 1/2 hours when 32 hours would have gotten me paid for 40."

The sales manager added that the scheduling practice wasn't just bad for staff but frustrated her, as someone who is held accountable for customer satisfaction, because it doesn't set the store up for success on potentially busy days.

"As a schedule-writing manager, I don't appreciate it. During a holiday weekend, I need more staff, not fewer, and I need my best people. And I need my most expensive people. And I need them for 40 full hours during Memorial Day weekend, Labor Day weekend, the week of Thanksgiving, the week of Christmas," she said.

Though not an official policy, the practice of reducing hours during holiday weeks is part of a trend at the co-op of unstable hours, fewer benefits, and worse pay, five current and former REI employees — all of whom have worked at REI for years — told Business Insider.

REI stood out as a great employer — now it's accused of providing the same unstable hours and low pay as other retailers

Retail work is known for low pay, scant benefits, and irregular hours. While major corporations like Amazon and Walmart have been called out for their treatment of workers, REI prides itself on standing for values that appeal to both consumers and employees, like the Opt Outside initiative or the company's environmental pledges.

REI employees told Business Insider that the co-op pitched itself to them as a company that offered its retail workers great benefits and flexible schedules and encouraged outdoor adventures — things that appealed to them.

"My impression of REI when I first started working there was that it was a company that valued outdoor expertise and work-life balance," the Bay Area sales lead said. "I wanted to work somewhere with like-minded people who have similar interests to me."

The sales lead said that while initially the job at REI was a lot better than past retail jobs she'd worked, as the minimum wage and the cost of living increased in the Bay Area, REI's wages fell short. She said entry-level sales specialists at the store were given a raise to $16 an hour this past year; as of July, the minimum wage in the city and county of San Francisco was $16.07.

"It just shows how out of touch corporate is with what it takes to live in America right now," she said. "Now I would say I've had other jobs that paid better. Why work there when I could work anywhere else that's retail?"

The sales manager told a similar story. When she was first interviewing with REI for a sales-floor job in 2010, she told the interviewer that she was going to work for the company that offered her the best hours and benefits. At the time, she was working at an Urban Outfitters store. "REI was like, 'Oh, no problem. We're going to easily win this competition,'" she said. "And they did, at that time. REI had better pay and more flexibility for a retail company in comparison to others."

But over the next 10 years, as the employee climbed up the ladder at REI from the sales floor to a sales manager, she saw the job and the company change. "That's really not true anymore," she said. "The pay is comparable at best. We hire people at minimum wage, which is not the case when I was hired. It's hard for people."

In those 10 years, REI opened 56 new stores. In 2020, REI has opened six new stores and two used-gear pop-up stores while laying off 400 retail employees because of the pandemic. REI now has 167 stores across the US.

REI told Business Insider: "Our pay philosophy is to target base pay above most retailers in all of our markets, and we take a market-based approach because economic pressures aren't the same in every part of the country. Over the past few years, we've made substantial investments in retail pay and work to ensure this policy is effectively implemented at every location. And, pay is just one part of the picture. We offer some of the best benefits available to retail employees. All employees are eligible for bonuses, and anyone who works over 20 hours a week has healthcare, retirement, and other benefits."

Irregular schedules create instability for workers and high turnover for employers

Opt Outside is a rare worker benefit in the retail industry. It gives every single REI employee at least six hours of paid time off — eight if they're full time.

But it's also a single day. The bigger problems that retail employees like those at REI face — such as the strategic reduction of hours — affect the other 364 days of the year.

Daniel Schneider, a creator alongside Kristen Harknett of The Shift Project — which studied the effects of shift work on nearly 100,000 employees at 150 companies across retail, fast-food and fast-casual chains, grocery stores, delivery and fulfillment, and hospitality — told Business Insider that workers with more unstable hours have reported that they "sleep less well at night, that they're more stressed out, that they're less happy."

Across the food-service and retail sectors, The Shift Project found, about two-thirds of workers said they got less than two weeks' notice of their schedule. Retail companies often tout their scheduling practices as offering flexibility to workers, but Schneider said the flexibility benefits the company, not the workers.

"It's instability for workers. It's flexibility for employers, which gives them the flexibility to trim payroll to meet customer demands," he said. "It's a shift of that risk from company payrolls to household balance sheets. That's what this is."

Brian Brown, a current REI store employee in Pittsburgh, said he had worked two jobs during the four years he's worked at the co-op because he couldn't make ends meet working at REI alone.

"The company prides itself on all the benefits of being an employee — you get insurance, you get to opt outside, you have a flexible schedule," Brown said. "But you cannot make a living at the stores."

This is a problem not just for the workers but for the companies that employ these shift-work models — especially in the case of specialized retail stores like REI, where salespeople are expected to have a strong command of technical product knowledge.

"This has been a huge problem for REI," the sales lead in California said. "You bring in these amazing, extremely knowledgeable, talented people, and you don't treat them very well, and you don't give them any hours, and they leave for a better-paying job that pays a living wage because REI does not."

Schneider said that flexible shift scheduling is seen as a benefit to companies because it allows them to keep their payrolls trim. But he said he thinks more stable scheduling would enable them to retain workers and offer better customer service.

Despite REI's growth over the years, the co-op model makes it feel more like a mom-and-pop shop than a major corporation, helping it to retain its reputation. Employees like Brown suggested that even co-op members — those who buy the $20 lifetime membership — are not privy to the reality of the company.

"When it gets close to the Opt Outside date, they do it all. They promote it like hell for weeks," he said. "So the public don't really know what REI actually does. They don't really know what REI is. And the members don't really know the working conditions."