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Plan Ahead or Pay the Price: Chicago Enacts Fair Workweek Ordinance

Labor & Employment Alert Brian A. Hartstein

The city of Chicago will soon join New York City, Philadelphia, Seattle, San Francisco, Washington D.C. and the state of Oregon on the ever growing list of localities enacting laws that protect worker schedules and limit employer flexibility.

Effective July 1, 2020, the Chicago Fair Workweek Ordinance requires employers in any "Covered Industry," including building services, healthcare, hotels, manufacturing, retail, or warehouse services with more than 100 employees globally (250 in the case of non-profits) with at least 50 covered employees, to provide certain protection around the scheduling of an employee's shifts. For restaurants, the law is applicable for a business with 30 locations globally and at least 250 employees. The ordinance applies to all covered employees in those industries who make less than $26 per hour or receive a salary of under $50,000 per year.

Advance Notice of Schedules

The heart of the ordinance is a 10-day, advanced notice requirement (growing to 14 days on July 1, 2022) for all covered employee shifts. The written employee schedule must include both scheduled shifts and any on-call status. Employers who make changes to employee schedules after the deadline must pay additional compensation, referred to as Predictability Pay, or may have employees decline a new shift requirement.

If, after the notice deadline, an employer adds hours of work, changes the date or time of a shift (even without a loss of hours) or cancels or subtracts hours after the deadline with more than 24 hours' notice, employees are entitled to an extra hour of Predictability Pay at their regular hourly rate. If an employer reduces hours from a regular or on-call shift (or cancels the same) with less than 24 hours' notice, including while the employee is working on a shift, there is an even greater cost as the employee is entitled to 50% of the regular rate of pay for the time they were otherwise scheduled to work.

In addition, the act provides a right of employees to decline hours that were not listed by the scheduling deadline provided in the law. It also specifically provides employees the right to decline any shift that starts less than 10 hours after the end of the previous day's shift and requires a pay premium of 1.25x the regular rate for work performed on such a shift.

The advance work schedule requirement does not apply to otherwise covered employers who allow their employees to self-schedule (or those who regularly host ticketed events). In addition, Predictability Pay is not applicable to a string of exceptions outside the employer's control like severe weather, threats of violence, or other special circumstances. Predictability Pay does not apply to mutually agreed upon shift changes (confirmed in writing), employee requested time off or shift trades between employees. There are also special carve outs for industry specific issues in the hotel, manufacturing and healthcare industries. For covered employers with collective bargaining agreements in place, the ordinance will not impact your current agreements, but must be unambiguously waived in future agreements.

Pre-Employment Guidance

The ordinance also establishes a pre-employment requirement for employers to communicate their expectations. These include a requirement that prior to the commencement of employment, the employer provide a good faith estimate, in writing, of the projected days and hours of work, including average number of work hours per week, days and shifts the employee would be expected to work, days the employee would not be expected to work, as well as any on-call expectations. The ordinance also provides a formal process by which an employee may request modification to these pre-employment projections and a duty for employers to respond to those requests in writing within three days.

Additional Scheduling Rights

Additionally, the ordinance also creates rules around filling additional shifts of work, requiring that those shifts be offered to existing employees first (with a preference for part-time employees when practicable). The requirement does not require an employer to provide this preference in a way that would make it subject to overtime pay premiums.

Further, the ordinance creates a specific right for employees to request modifications to their work schedule and creates an affirmative duty for employers to respond to such requests in writing. Finally, the law has standard record retention and posting requirements.

Enforcement

The ordinance creates a private right of action for employees to enforce their rights and employers who violate the ordinance will be subject to penalties of $300 - $500 per offense. The procedures around these actions are expected to be fleshed out in greater detail through the administrative rulemaking process.

The ordinance, which recently passed the Chicago city council, is expected to be signed shortly by Mayor Lightfoot.

Recommendations

As Chicago employers prepare to comply with these new rules, here are a few items to consider:

  • Review whether your business will be covered by the act;
  • Consider changes to scheduling practices and related software that may be needed to comply with the law;
  • Update employee handbooks and policies to comply with the new law, including procedures around requests for schedule changes;
  • Update employee offer letters to reflect the pre-employment guidance requirements; and
  • Stay tuned for additional administrative guidance expected prior to the July 1, 2020 effective date.

For more information on how Chicago's Fair Workweek Ordinance will impact your business, please contact your local Quarles & Brady attorney or: