August 26, 2019

Chicago's Fair Workweek Law Will Mandate Notice of Employee Schedules. Are Employers Ready?

Effective July 1, 2020 many Chicago employers will be required to give employees 10 days’ notice of their calendar workweek schedule (increasing to 14 days on July 1, 2022) or instead make a “Predictability Payment.” Here’s an overview of the new ordinance: 

What is a Covered Employer?

The new law applies to employers that operate primarily in a “Covered Industry,” and employ at least 100 employees globally (250 minimum for nonprofits), with a minimum of 50 “Covered Employees.”

What are the Covered Industries?

  • Building Services (janitorial, maintenance, security, etc.)
  • Healthcare
  • Hotels
  • Manufacturing
  • Restaurants (those licensed in Chicago with 30 global locations and 250 or more employees, unless the employer has three or less locations in Chicago under a single franchise);
  • Retail
  • Warehouse Services

What is a Covered Employer?

An individual who performs work for an employer:

  • As an employee or as a temporary worker on assignment for 420 hours within an 18-month period (not a “contractor” under IRS guidelines)
  • Does the majority of their work in a Covered Industry while physically present in Chicago
  • Earns an annual salary of $50,000 or less, or $26 or less per hour (annual increases pegged to the Consumer Price Index will be published in a bulletin every June 1)
    • For hotel employees, “set service fees” are included in the hourly rate, but
    • Employees who staff a catered “banquet event” at the hotel and receive a set gratuity are not Covered Employees for purposes of that event.

What Advance Notice Must Employers Give to Covered Employees?

Two types:

  • For the 90 days of employment, employers must provide a “good faith” written estimate of the average weekly days and hours of work, including any on-call shifts. The Covered Employee may request a change, which the employer may reject in writing
  • Thereafter, the employer must post the work schedule in a conspicuous place (and send electronically upon request) at least 10 days before any new schedule begins (14 days as of July 1, 2022). The work schedule includes the shifts and on-call status of all current Covered Employees, however:
    • Covered Employees who “self-schedule” by agreement with their employer, or who regularly work “ticketed events” (venues with a capacity of at least 5,000) are exempt; and
    • Covered Employees who are a victim of domestic violence or sexual violence (or a victim’s family or household members) may request that their work schedule not be posted or transmitted to other employees.

What if Schedule Changes are Made After the Advance Notice Deadlines?

There are a few scenarios here. First, the employer must post amended schedules within 24 hours of making changes to the schedule. The Covered Employee has the following rights:

  • Right to Decline: If notice of a scheduling change is made less than the applicable 10-day (14-day in 2021) time period, the Covered Employee may decline any additional hours that are added.
  • Right to “Predictability Pay” for Alterations: The Covered Employer must pay one hour of “Predictability Pay” (regular hourly rate) per shift for any schedule alteration that:
    • Changes the date or time with no loss of hours
    • Cancels or subtracts hours from a regular or on-call shift with more than 24 hours’ notice
  • Right to Additional Half-Time Pay: The employer must pay an additional 50 percent of the Covered Employee’s regular rate of pay for each hour that the employer, with less than 24 hours’ notice:
    • Subtracts hours from a regular or on-call shift; or
    • Cancels a regular or on-call shift

The new ordinance provides exceptions for things like mutual agreement for changes and outside events beyond the employer’s control.

What if Employer Needs to Fill Additional Shifts?

Any additional available shifts that are not accepted by regular Covered Employees should be offered to part-time Covered Employees first, and then to temporary or seasonal workers who have worked for more than two weeks.

How Soon Can Employers Have Covered Employees Begin Another Shift?

A Covered Employee is entitled to at least 10 hours between shifts. Otherwise, the employer must pay at a rate of 1.25 times the regular rate for that shift.

What if the Employer is Subject to a Collective Bargaining Agreement?

The new ordinance can be clearly waived in a collective bargaining agreement and does not affect the validity of any existing agreements.

Are There Any Posting Requirements?

Yes, the city’s Department of Business Affairs and Consumer Protection will issue a form notice that must be posted in a conspicuous place and provided with the first paycheck of any Covered Employee.

What are the Penalties for Non-Compliance?

Employers are subject to a fine of $300-$500 for each offense, per Covered Employee, per day, and Covered Employees may bring a civil action following certain administrative steps. Covered Employees who prevail are entitled to compensation plus litigation costs, including expert and attorney fees. In other words, employers face very serious liability for non-compliance, so now is the time to ensure that you are compliant.

For more information or to discuss the new ordinance, please contact any of the lawyers in Gould & Ratner’s Human Resources and Employment Practice.