Phillip M. Schreiber is a Partner in Holland & Knight's Chicago office
Jennifer J. Froehlich is a Senior Counsel in Holland & Knight's Chicago office
The Chicago City Council recently passed the Fair Workweek Ordinance (SO2019-3928), and Mayor Lori Lightfoot is expected to sign the Ordinance. The Ordinance becomes effective July 1, 2020. Predictive workweek laws are a small but growing trend at the local and state level.
Seven industries are covered by the Ordinance: building services, healthcare, hotels, manufacturing, restaurants, retail and warehouse services. The ordinance includes specific definitions for each covered industry. For example, not all restaurants fall within the Ordinance's coverage.
An employer in a covered industry is subject to the Ordinance if it a) employs globally 100 or more full-time or part-time employees and b) employs 50 "Covered Employees." A Covered Employee is an employee who primarily works in the City of Chicago and earns either a salary of $50,000 or less or an hourly wage of $26 or less. Covered Employees include full-time and part-time employees.
Advance Notice of Work Schedules
1. Initial Estimate on Hire
Prior to a newly hired Covered Employee's commencement of employment, a Covered Employer must provide the employee with a good faith estimate in writing of the employee's projected days and hours of work for the first 90 days of employment. This estimate must include the following: a) the average number of weekly hours the employee can expect each week; b) whether the employee can expect to work on-call shifts; and c) the subset of days and times or shifts that the employee can expect to work or the days of the week and times or shifts that the employee will not be scheduled to work. The required estimate of hours does not create a contractual obligation by the Covered Employer to the employee; that is, the Covered Employer is not contractually obligated to guarantee the employee the estimated work schedule. However, it would be prudent for a Covered Employer to clearly indicate that the projected hours are merely an estimate and not a guarantee.
A Covered Employee may request, prior to commencing employment, that the Covered Employer modify the estimated work schedule. Although the Covered Employer is obligated under the ordinance to consider all such requests, it retains the sole discretion to accept or reject a request. The Covered Employer must notify the employee of its decision on the employee's request for modification within three days of receiving the employee's request.
2. Schedule Posting
A Covered Employer is required to post the work schedule for its Covered Employees no later than 10 days before the first day of any new schedule. Effective July 1, 2022, the schedule must be posted 14 days in advance. The schedule must either be posted in a conspicuous location visible to all Covered Employees or otherwise communicated in the manner the Covered Employer usually communicates with its Covered Employees. The schedule must include the shifts and on-call status of all current Covered Employees. If requested by a Covered Employee, the Covered Employer must transmit the schedule to that employee via electronic means.
A Covered Employee who is the victim of domestic or sexual violence (or a household member of such a victim) has the right to require the Covered Employer not to post his/her name on the work schedule.
The Covered Employer can change the work schedule prior to the 10-day deadline (14 days as of July 1, 2022) without consequence.
3. Employee Rights and Employer Penalties for Changing the Work Schedule
The ordinance provides Covered Employees with certain rights and penalizes the Covered Employer if Covered Employees' schedules are changed by the Covered Employer without 10 days' notice (14 days' notice as of July 1, 2022).
Right to Decline Shifts. From July 1, 2020, through June 30, 2022, an employee has the right to decline any added hours to an employee's work schedule for which the employee was not provided at least 10 days' notice. As of July 1, 2022, an employee has the right to decline any added hours to an employee's work schedule for which the employee was not provided at least 14 days' notice.
Predictability Pay Penalty. If the Covered Employer alters a Covered Employee's schedule with less than 10 days' notice (14 days' notice after July 1, 2022), it must pay the employee one hour of "Predictability Pay" for each shift that the Covered Employer a) adds hours of work; b) changes the date or time of a work shift, even with no loss of hours; or c) with more than 24 hours' notice, cancels or reduces hours from a regular or on-call shift. "Predictability Pay" is based on the employee's regular rate of pay. (Salaried employees are converted to an hourly rate.)
Enhanced Penalty for Last-Minute Reductions in Hours. If the Covered Employer reduces a Covered Employee's scheduled hours with less than 24 hours' notice to the employee, the Covered Employer must pay the employee 50 percent of the employee's regular rate of pay for all of the cut hours. This includes situations where the employee is sent home early. It also includes cut on-call hours.
Notice of Schedule Changes
Regardless of how far in advance the Covered Employer changes an employee's schedule, all schedule changes must be posted and transmitted to the affected employee within 24 hours of the change.
Right of Rest
A Covered Employee has the right to decline scheduled hours that are less than 10 hours after the end of the employee's previous shift.
The ordinance provides for several exceptions where the penalties and other employer obligations are not applicable. Exceptions of general applicability include the following:
- schedule changes attributable to events outside of the Covered Employer's control; namely a) threats to the Covered Employer, its property or the Covered Employees when civil authorities recommend closure; b) loss of public utility service (water, gas, electric, sewer system); c) acts of nature (e.g., earthquake, flood, tornado, blizzard); and d) war, civil unrest, strikes, threats to public safety and pandemics
- work schedule changes resulting from mutually agreed upon changes between the Covered Employees; it is recommended that such changes should be confirmed by the employees in writing
- a work schedule change that is mutually agreed upon between the Covered Employer and the Covered Employee, confirmed in writing
- a Covered Employee's request for a shift change, confirmed in writing, including but not limited to the use of sick or vacation time off, or other time off provided by the Covered Employer
- a reduction in hours imposed by the Covered Employer for disciplinary reasons under a just cause standard, provided the incident leading up to the reduction in hours is documented in writing
There are other exemptions related to specific covered industries.
Staffing for Additional Work Hours
If the Covered Employer determines that it needs to fill additional shifts of work, it first must offer the additional shifts to existing Covered Employees if the Covered Employees are qualified to do the additional work (as determined by the Covered Employer). Where practicable, the additional work should first be offered to part-time Covered Employees.
Importantly, additional work need not be offered to a Covered Employee that would result in overtime pay premiums to that Covered Employee.
If an insufficient number of Covered Employees accept the offer of additional work, the Covered Employer must offer the additional work to temporary and seasonal employees who have worked on behalf of the Covered Employer for two or more weeks. The ordinance does not specify how far back in time the Covered Employer must look for temporary or seasonal workers or how this applies to workers supplied by a staffing agency.
Notice to Employees of the Ordinance
There will be a poster for the Covered Employer to place with its other required posters. In addition, a notice needs to be provided to Covered Employees with their first paycheck on a form that will be provided by the City.
Regulations to Follow
The Ordinance calls for regulations to supplement the statutory text. The regulations likely will provide further guidance to employers on how to implement the Ordinance's requirements.
Guidance for Employers
The Fair Workweek Ordinance will affect many employers in Chicago. Employers should ascertain whether they are covered by the Ordinance and, if so, which of their employees are entitled to the benefits of the Ordinance. Covered employers may wish to begin the process of rolling out work schedules at least two weeks in advance now. This will allow refinements to the process for predicting labor needs in advance as well as handling last-minute changes to the schedule.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.