Certain Chicago employees will soon enjoy more control over their work schedules. On July 24, 2019, the Chicago City Council passed the Fair Workweek Ordinance (the Ordinance), a type of “predictable scheduling” law, which requires employers to pay employees for making late changes to employees’ work schedules. Several other jurisdictions have similar laws. Chicago’s Fair Workweek Ordinance, however, covers more employers and provides for stiffer penalties than most other jurisdictions. The Ordinance becomes effective on July 1, 2020.

Coverage

Employees. The Ordinance covers “hourly employees” who earn up to $26.00 per hour and “salaried employees” who earn up to $50,000 annually. Because the Ordinance does not exclude coverage of employees classified as exempt under the Fair Labor Standards Act, exempt employees earning less than the amounts specified under the Ordinance presumably will be covered by the Ordinance. Given the potentially serious scheduling problems this may pose for employers, the city’s subsequent rules implementing the Ordinance hopefully will clarify the extent to which it covers exempt employees.

The wage levels specified in the Ordinance may increase annually based on annual increases in the Consumer Price Index. 

Covered employees must also spend “the majority” of their time working for their employer while physically present within the city and work in one of these industries:

• Building services;
• Healthcare;
• Hotels;
• Manufacturing;
• Restaurants;
• Retail; and
• Warehouse services.

Employers. An employer is covered under the Ordinance if it mainly operates in any of the above industries and has 100 or more employees globally—50 of whom must be covered employees as described above. However, an employer in the restaurant industry is covered only if it has 250 or more employees and 30 or more locations globally. Likewise, a nonprofit employer is covered only if it has 250 or more employees.

General Requirements

The Ordinance provides employees several rights related to their work schedule, including:

• Right to decline additional hours scheduled within 10 days (14 days starting on July 1, 2022) of the first day of a new schedule;
• Compensation for certain changes made to their work schedules;
• Right to decline additional hours within 10 hours after a previous shift; and
• Right to request a modified work schedule, such as changes in days or times of work, total work hours, job-sharing, and status as full or part-time. Employers are not required to grant such requests. However, adverse action cannot be taken against requesting employees.

Employers must abide by several major requirements in the Ordinance, such as:

• Before employment, provide new employees an initial estimate of their work schedule for the employees’ first 90 days, including good faith estimates of average weekly hours, days, and shifts – and employers must respond in writing within three days to employees’ requests to modify the projected days and hours of work;
• Provide employees advance, written notice of their work schedule no later than 10 days (14 days starting on July 1, 2022) before the first day of any new schedule;
• Compensate employees, as described below, for alterations made to work schedules after the Ordinance’s deadline to post the schedule;
• Offer additional work hours to existing, qualified employees before filling additional shifts with temporary or seasonal workers;
• Posting a notice in the workplace, and including a notice with employees’ first paycheck, about employees’ rights under the Ordinance; and
• Keeping records for at least three years demonstrating compliance with all provisions of the Ordinance.

Mandated Compensation for Alterations to an Employee’s Work Schedule

For any changes to an employee’s work schedule after the Ordinance’s posting deadline but more than 24 hours before the changed shift, the employer must pay the employee one hour of “predictability pay” per shift modified. Predictability pay is one hour of pay at the employee’s regular rate. But if the employer cancels or subtracts hours from an employee’s schedule with less than 24 hours’ notice, the employer must pay the employee for those canceled or reduced hours at 50% of the employee’s regular rate. Moreover, if an employee works a shift that starts less than 10 hours after the previous day’s shift, the employee is entitled to a rate of 1.25 times the regular rate for that shift.       

The Ordinance provides for some exceptions to the compensation requirement for schedule changes, such as if public utilities fail, an act of nature, or threats to the employer. An employer and employee may also agree to a schedule change if confirmed in writing. And an employer may subtract hours from an employee’s work schedule for disciplinary reasons based on “just cause,” if the employer documents the incident. The Ordinance contains other important exceptions as well, some of which are particular to certain industries.

Employers with Unions

The Ordinance provides that employers with collective bargaining agreements (CBAs) may include in the CBAs: (i) provisions “in excess of the applicable minimum standards” of the Ordinance; and (ii) waiver of the Ordinance’s requirements “in clear and unambiguous terms.” Under certain circumstances, applicable precedents under the National Fair Labor Standards Act may preclude enforcement of the CBA “waiver” provision of the Ordinance.   

Enforcement and Remedies

The Department of Business Affairs and Consumer Protection (the Department) is empowered to adopt rules to enforce and administer the Ordinance. An employee may file a civil action but only after submitting a complaint to the Department and after the Department notifies the employee that it considers the matter closed. A claim must be filed within two years of the alleged violation. 

The Ordinance provides for penalties of between $300 and $500 per employee for each violation. Each day that a violation occurs will lead to a separate fine. Retaliation is prohibited and can result in a $1,000 fine. And damages, including costs and attorney’s fees, are also available to employees prevailing in a civil action.

Employer Takeaways

Employers with Chicago employees in the covered industries should: (1) determine whether they are covered employers under the Ordinance; (2) identify covered employees; and (3) examine their current scheduling practices to determine necessary changes before the Ordinance takes effect. Employers should also update their record retention practices and employee handbook to apply their reporting requirements related to retaliation prohibition and other requirements under the Ordinance. 

The Ordinance is a considerable change in the law, and covered employers need to be prepared to minimize last-minute scheduling changes and resulting claims by employees. 

Taft’s Employment and Labor Relations practice group is ready to help existing and future clients navigate these legal issues and follow best practices. Feel free to call us with any questions about the Chicago Fair Workweek Ordinance, or other specific state and local laws, and how they impact your business practices.