Franczek P.C.

Last night, an updated version of the Chicago Fair Workweek Ordinance was introduced in the Chicago City Council. Prior versions of this ordinance were proposed in 2017 and 2018, but failed to gain traction.  Like its predecessors, the ordinance would require many Chicago employers to publish employees’ schedules and limit their ability to change employees’ schedules or impose mandatory overtime. If enacted in its current form, the ordinance would take effect on April 1, 2020. The City Council could vote on the ordinance as early as June 12.

Coverage
The proposed ordinance would apply to employers in the following industries: day and temporary labor service agencies, hotels, restaurants, building services, healthcare facilities or programs, manufacturers, airports, warehouses, retail, and child care. Employers in those industries would be covered only if they maintain a business facility within the City of Chicago, have 30 locations globally, or are subject to City licensing requirements. Additionally, the ordinance does not apply to employers with fewer than 100 employees, or to restaurants or nonprofit organizations with fewer than 250 employees. The ordinance also includes other narrower exemptions, such as one for franchisees that operate three or fewer locations.

The requirements of the ordinance would apply to all hourly employees of covered employers, as well as salaried employees earning less than the 40th percentile of salaried workers in the Midwest Census Region as determined by the Department of Labor (currently estimated at about $51,600 per year).  The ordinance would not apply to employees who work in Chicago sports stadiums.

Coverage for Union Employees
The ordinance would not require any changes to the terms of any collective bargaining agreements in effect on the effective date of the ordinance. However, it would apply to employees covered by collective bargaining agreements that become effective after the effective date of the ordinance unless the agreement includes a clear and unambiguous waiver of the requirements of the ordinance. The ordinance does not apply to union employees who work in the construction industry or for public utilities, telecommunications carriers or their affiliates who require specialized and ongoing technical training, or for an employer that competes with the U.S. Postal Service in providing warehouse services.  

Advance Notification of Schedules
Under the ordinance, employers would have to give a good faith estimate of a new employee’s work schedule prior to their employment. Thereafter, employers would initially be required to notify employees of their work schedules at least 10 days in advance. Beginning April 1, 2022, the notice period would increase to 14 days. Work schedules would have to be both posted at the workplace and transmitted to employees electronically. If the employer fails to provide adequate notice of work schedules, employees have the right to decline those hours.  

Extra Pay for Schedule Changes
If the employer changes a worker’s schedule within the notice period, the employer would have to give the worker one hour of “predictability pay” at the employee’s regular rate. If the employer cancels or reduces hours with less than 24 hours’ notice, the employer would have to pay the worker half their regular rate of pay per hour for any hours not worked as a result.

These requirements do not apply under certain circumstances, such as if there is an act of nature that prevents operations from continuing, if there are unforeseen circumstances, or if employees mutually agree to trade shifts. The employer can also avoid “predictability pay” when an employee agrees to a proposed schedule change in writing.

Hiring Restrictions
Before hiring new employees or adding temporary workers, the ordinance also requires employers to first offer additional hours to existing employees who are qualified to do the work. The ordinance expressly prohibits employers from distributing hours in a manner intended to avoid application of the Patient Protection and Affordable Care Act. However, the ordinance does not require employers to offer additional hours to employees when doing so would make the employees eligible for overtime pay.

Rest Time
The proposed ordinance also includes a “right to rest” provision that allows employees to decline hours that occur within 10 hours of a prior shift. Additionally, unless the employee consents to work those hours in writing, the employer must pay the employee one-and-a-half times their regular rate for any hours worked less than 10 hours following the end of their previous shift.

Recordkeeping
All schedule changes and employer communications regarding schedule changes must be in writing.  Employers are required to keep all records including payment records, schedules, written offers to change schedules, consent to work forms, and employee written responses for 3 years. The employer must provide employees with a copy of their records upon reasonable request. Employers will also be required to post a notice of employees’ rights under the ordinance, and to distribute the notice to employees.

Potential Penalties for Violations
The City may investigate any possible violations and will have the authority to inspect workplaces. Employee’s will also maintain the right to bring a private action within 3 years from the date of the alleged violation. If an employer is not compliant with the ordinance, that business may be ineligible for city transactions or be issued an administrative fine: $1,000 for each employee that was retaliated against, and a fine of $300 per employee whose rights were violated for each day that a violation occurred. If an employee pursues civil action and prevails, he or she will be entitled to reasonable attorneys’ fees and costs.  

The ordinance also prohibits employers from retaliating against employees for exercising their rights under the ordinance. 

Moving Forward
Employers should closely track progress of this ordinance in the City Council. Employers who wish to provide feedback regarding the ordinance to Council members should do so as soon as possible, as the Council may vote on the ordinance in the very near future.

If the ordinance is passed, employers will need to begin planning in very short order to ensure that they are in compliance before the April 2020 effective date. For example, employers with unionized workforces should plan to negotiate a waiver or otherwise address the requirements of the ordinance in any upcoming contract negotiations that may conclude after April 1, 2020. All Chicago employers should determine whether they may be covered by the ordinance and, if so, determine what practices they may need to implement or change in order to comply. We will continue to monitor progress of the ordinance and provide updates as new information becomes available.

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