Chicago City Council unanimously passes Fair Workweek Ordinance, effective July 1, 2020

After trying for several years, and upon receiving the support of newly elected Mayor Lori Lightfoot, the Chicago City Council passed the Chicago Fair Workweek Ordinance on July 24, 2019. This law is designed to provide predictive scheduling to protect Chicago’s working people from scheduling practices that impede them from “attending to their families, health, education and other obligations.”

The ordinance does not cover all Chicago employees, just those who work for larger organizations in seven identified industries and who earn $50,000 or less annually as a salaried employee or $26 per hour or less as an hourly employee. The protections are effective on July 1, 2020, which gives impacted Chicago employers nearly a year to ready themselves for their new obligations.

Which employers are covered?

The ordinance applies to businesses in seven industries that employ 100 or more workers globally where at least 50 of those workers spend the majority of their working time in Chicago. For not for profits, the ordinance applies if they have 250 or more employees, 50 of whom spend most of their time working in Chicago.

Which industries are covered?

The seven covered industries are:

• Building services

Includes employers that provide for the care and maintenance of property, including janitorial services, building maintenance services and private security services.

• Healthcare

Includes state licensed hospitals, nursing homes, mental health rehabilitation facilities, assisted living and shared housing, life care facilities, ambulatory surgical treatment centers and free standing emergency centers.

• Hotels

Includes hotels, inns  and motels. It does not include bed and breakfasts, vacation rentals or shared housing units.

• Manufacturing

Includes employers that produce goods from raw or prepared materials. 

• Restaurants

Includes licensed food establishments with at least 30 global locations and at least 250 employees. It does not include businesses with less than three locations owned by one employer and operating under a sole franchise.

• Retail

Includes businesses for the sale of goods used primarily for personal, household or family purposes, including stores that sell groceries, clothing and appliances.

• Warehouse services

This includes businesses that store goods, wares or commodities for hire or compensation. 

Which employees receive these new protections?

The ordinance applies to “Covered Employees”. A Covered Employee is one who works the majority of their time in Chicago for an employer in a covered industry. They must be an employee, not an independent contractor, who earns $50,000 or less per year as a salaried employee or $26 per hour or less as an hourly employee.

Union employees may not be covered because unions and employers are permitted to explicitly waive the requirements of the ordinance in their future collective bargaining agreements.

What is required of employers?

    Advance Notice of Schedules

• Newly-hired Covered Employees must be provided a written good faith estimate of their projected work schedules for their first 90 days of employment.
• From July 1, 2020, to June 30, 2022, employers must give their Covered Employees at least 10 days’ written notice of their work schedules. After July 1, 2022, the advance notice period will be 14 days. 
• Before the 10th (or 14th) day, an employer may change the schedule without penalty. 
• Covered Employees may decline to work any additional hours that are scheduled with less than 10 (or 14) days’ advance notice. 
• The written schedules are to be posted (although there are exceptions for Covered Employees who are or have family or household members who are victims of domestic or sexual violence).  

    Offer additional work to existing Covered Employees

• Employers will be required to offer additional hours first to existing Covered Employees who are qualified to do the work (even if it triggers pay penalties under the ordinance for failing to provide advance notice). Employers are encouraged to offer the additional hours to part‑time Covered Employees. Employers will not be required to offer the additional hours to existing Covered Employees if it makes them eligible for overtime pay.  

    Post and provide notices

• Employers will be required to post a notice (a form to be prepared by the City) in all workplaces where Covered Employees work and to provide a notice detailing rights under the Ordinance to all new Covered Employees with their first paycheck.

    Respect Covered Employees’ right to rest

• Covered Employees may decline work hours that require them to start a new shift which is less than 10 hours after the end of the previous day’s shift. If a Covered Employees works a shift that begins less than 10 hours after the end of the previous day’s shift, the employer must pay the Covered Employee at a rate of 1.25 times the Covered Employee’s regular rate of pay for that shift.

    Recordkeeping

• Employers must keep payment records, schedules, written offers to change schedules, consents to work forms and employee written responses for three years. Employees may request a copy of their records.

    Anti-retaliation

• Employers are prohibited from retaliating against their employees for exercising their rights under the ordinance.

Penalties for changing a schedule after the notice period

If an employer intends to change the posted hours, it must give 24 hours’ written notice to the Covered Employee. 

If the employer subtracts or adds hours or changes the date or time of a work shift with no loss of hours, the employer will be required to pay the employee one hour of Predictability Pay, which is one hour of the Covered Employee’s regular rate of pay. 

In addition, the employer will be required to pay not less than 50% of the Covered Employee’s regular rate of pay for any scheduled hours that the employee does not work because the employer, with less than 24 hours’ notice subtracted hours from the employee’s regular shift.   

A work schedule can change without triggering penalties under the ordinance

Without penalty, including Predictability Pay, employers may change or modify employees’ schedules after the notice period in the following circumstances:  

• Covered Employees may mutually agree to swap or change shifts between themselves.
• Employees and employers may mutually agree in writing to changes in the schedule.
• Employees may make a written request for a shift change to use sick leave, vacation leave or other leave offered by an employer.
• An employer may subtract hours from an employee’s work schedule for disciplinary reasons.
• Work schedules may change due to threats to the employer, employees, or property, or if civil authorities recommend that work not begin or continue.
• Work schedules may change if public utilities fail to supply electricity, water or gas or the sewer systems fails to serve the work location.
• A work schedule may change, in manufacturing, because of events outside the control of the manufacturer including if a customer requests a delay in production or there is a delay in the receipt of raw materials or component parts.
• A work schedule may change, in healthcare, if there is a declared disaster or emergency, patient care requires specialized skills through the completion of a procedure, or there is an unexpected substantial increase in demand for health care due to large public events, severe weather, violence or other circumstances beyond the employer’s control.
• Work schedules may change for acts of nature, including flooding, tornados, blizzards, earthquakes.
• Work schedules may change because of war, civil unrest, strikes, and threats to public safety or pandemics.

Private right of action and penalties

Covered Employees have a right to initiate a civil action after they exhaust remedies with the Department of Business Affairs and Consumer Protection. Those actions must be filed within two years of the alleged violation of the ordinance. If an employee prevails, they may recover their unpaid predictability pay, litigation costs, expert witness fees and reasonable attorneys’ fees.

Employers that violate the ordinance shall be subject to fines of not less than $300 but no more than $500 per offense which will be calculated to include each employee and each day of a violation. 

This is a general summary of the provisions of the new ordinance. For more information, including whether it will apply to your business and what steps are required to ensure compliance, contact one of Chuhak & Tecson’s Employment law attorneys. 

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.

Client alert authored by: Jeralyn H. Baran, Principal