The proposed Chicago Fair Workweek Ordinance, introduced in the City Council on May 29, 2019, would require certain Chicago employers to publish employees’ schedules two weeks in advance and limit their ability to change employees’ schedules or impose mandatory overtime and impose new record-keeping requirements. If enacted in its current form, the ordinance would take effect on April 1, 2020.
Who is covered?
- Employers that maintain a business facility within the city of Chicago, or have 30 locations globally, or are subject to City licensing requirements, in the following industries: day and temporary labor service agencies, hotels, restaurants, building services,[1] healthcare facilities or programs, manufacturers, airports, warehouses, retail, and child care. Employers in those industries would be covered only if they have 100 or more employees, or restaurants or nonprofit organizations with 250 or more employees. There are other narrower exemptions, such as one for franchisees that operate three or fewer locations.
- All hourly employees of covered employers, as well as salaried employees earning less than about the 40th percentile of salaried workers in the Midwest Census Region (in the $51,000-54,000 per year range). The ordinance would not apply to employees who work in Chicago sports stadiums.
What is the impact on collective bargaining agreements?
- The ordinance would not require any changes to the terms of any collective bargaining agreements in effect on the effective date of the ordinance [projected as April 1, 2020]. However, it would apply to CBAs that become effective after [April 1, 2020], unless the CBA 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.
What notice of schedules is required?
- Employers must 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 posted at the workplace and transmitted to employees electronically. If the employer fails to provide adequate notice of changed work schedules, employees have the right to decline those hours.
What is the cost of a “last-minute” change to the schedule?
- If the employer changes a worker’s schedule within the notice period (less than 10 days), the employer would have to give the worker one hour of “predictability pay” at the employee’s regular rate for each shift that is changed.
- 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 “exceptions,” 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.
Do employers have to offer hours to existing employees before hiring new staff to cover?
- Before hiring new employees or adding temporary workers, the ordinance 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.
Is premium pay required if the new hours are close to the existing work hours?
- 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.
- 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.
What records must an employer keep?
- 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.
What are the penalties for violations?
- The City may investigate violations and will have the authority to inspect workplaces. Employees can bring a private action within 3 years from the date of the alleged violation. If an employee prevails, he or she will be entitled to reasonable attorneys’ fees and costs.
- 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.
How should an employer prepare?
- Contact your alderman to express opinions and/or concerns about the proposed ordinance soon, because the City Council could vote as early as June 2019.
- If the ordinance is passed, start planning 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 which of its employees are covered by the ordinance so that notice and communication plans can be put in place.
[1] “Building services” means janitorial services, building maintenance services, security services or other services in or around a covered location to maintain the security, repair, cleanliness, and overall quality of any residential or commercial property.