On July 24, 2019, the Chicago City Council passed an expansive fair workweek ordinance, effective July 1, 2020. The onerous ordinance has many significant impacts for larger employers, and as with minimum wage, paid sick leave, and even cannabis regulation, may also foreshadow expansion to smaller employers in the city, Cook County, and throughout Illinois.
Coverage
A Covered Employee must (a) be (i) an employee (not a bona fide independent contractor), or (ii) a temp worker on assignment to an employer for 420 hours in an 18-month period; and (b) spend the majority of his/her time at work for that employer while physically within Chicago; and (c) perform the majority of his/her work in a Covered Industry for that employer; and (d) from that employer earn less than or equal to (i) $50,000/year as a salaried employee, or (ii) $26.00/hour as an hourly employee, (these amounts increase annually). An employee that does not meet all of these elements is not a Covered Employee. The ordinance does not define the time frame for which “majority” of time is measured or re-measured – e.g., beginning on Day 1, average of the last 6 months.
A Covered Employer employs at least 100 employees globally (250 for a not-for-profit), of which at least 50 are Covered Employees in a Covered Industry. Covered Industries, broadly defined, are: Hotels, Restaurants (with at least 30 locations globally and 250 employees in aggregate – but not businesses with three (3) or fewer locations in the city owned by one employer and operating under a sole franchise), Building Services (e.g., janitorial services and security), Healthcare, Manufacturing, Warehouse Services (including pick’n’pack services), and Retail. Given the broad definitions and remedial nature of the ordinance, employers should carefully evaluate their business before concluding they are outside the covered industries and thus exempt from the ordinance.
The ordinance does not affect the validity of an in-force collective bargaining agreement, and future CBAs may explicitly waive coverage.
Scheduling & Compensation
Prior to or at commencement of employment, an employer must provide a written good faith estimate of the employee’s projected days and hours of work, including on-call shifts, for the first 90 days of employment; the employer must respond in writing within three days to any request to change the shifts. Thereafter, employers must also provide at least ten (10) days’ advance written notice of schedules and changes (increasing to 14 days on July 1, 2022). The schedule may be posted and/or electronically distributed; a victim of domestic or sexual violence may request that his/her schedule not be posted. Employees may decline hours scheduled without sufficient notice. Employers must post and provide notice of the law; forms are not yet available.
Employers must pay, in addition to regular wages, one hour of “Predictability Pay” for each shift that the employer (a) adds hours of work, (b) changes the date or time of a shift without loss of hours, or (c) with 24-hours’ notice cancels or reduces the number of hours in a shift. Additional shifts are to be offered first to existing employees if so qualified, unless doing so would result in premium rates. If an employer cancels or reduces the shift with less-than 24-hours’ notice, the employee is entitled to 50% of the regular wages for the scheduled shift. So, if a restaurant cuts staff on a slow night, they still get 50% of the hourly wages they would have received; conversely, if the restaurant is slammed (or another employee fails to report for his/her shift) and employees work beyond their scheduled shifts, they are entitled to a bonus hour of pay! There are limited exceptions, such as: threats to the employer; public utility failures; acts of nature; mutually agreed schedule changes confirmed in writing; employees mutually agreeing to trade or cover shifts; an employee’s request to use mandated (e.g., paid sick) or other leave; documented “just cause” disciplinary suspensions; a manufacturing customer requesting or receipt of raw material causing a production delay; or employees who self-schedule without employer preapproval of shifts.
Employees have the right to rest and so may decline a shift that begins less than ten hours after the end of the previous day’s shift. But, if the employee accepts, the employee is entitled to a shift premium of 1.25 times the regular rate!
Employers must maintain records for three years of employees’ names, hours worked, pay rate, work schedules, initial posted schedule and subsequent changes.
Violations
Fines include $300-$500 per offense (per employee per day), and $1,000 for retaliation. As with other wage and hour violations, Employees and employers may not privately settle offenses. Following investigation and closure by the Chicago Department of Business Affairs and Consumer Protection (BACP), the employee may pursue a civil action within two years of the alleged offense, with remedies including damages, and the employee’s litigation costs, and attorney and expert fees. Employers enjoy no similar prevailing party right.
What Employers Must Do to Prepare:
While Chicago’s ordinance impacts large employers, all employers must keep fair workweek laws on their radar of developing national trends, which can expand to additional industries, smaller employers, and new cities, counties, and states. The key issue in these laws is that companies must know their staffing needs, plan effectively, and communicate accurately to employees. Evaluating schedules and understanding employees’ willingness to work extra or last-minute hours or trade shifts will be important for minimizing exposure.
In Chicago specifically, Covered Employers must ensure that job offer letters comply with the ordinance as well as other laws, such as the Illinois Wage Payment & Collection Act.
Naturally, the ordinance requires a review and refresh of policies and procedures. Missing from this “fair” workweek ordinance is any repercussion when an employee is a no-call-no-show or is late, and the employer must scramble for coverage. Employers should carefully review their policies and procedures related to attendance, work schedules and coverage, overtime, on-call, discipline, and otherwise implicated by this law. But, also recordkeeping procedures must be modified to ensure that records are maintained as required.
Of course, employers should not be left holding the bag. Experienced employment counsel can assist with policy formation and compliance.
