New Chicago Fair Workweek Ordinance Imposes Expansive Scheduling Requirements on Employers

Summary

The Chicago Fair Workweek Ordinance (the “Ordinance”) is slated to take effect on July 1, 2020, almost three full years after it was originally introduced before the Chicago City Council. The Ordinance imposes a number of restrictions on covered Chicago employers, including but not limited to providing new employees with written estimates of their hours for the first 90 days, publishing employee schedules at least 10 days in advance, mandating premium pay for employee schedule changes after such time, a right of first refusal to existing qualified employees to work available shifts and required rest time of 10 hours between shifts.  The Ordinance is also expansive with respect to the types of industries it covers, which include retailers, restaurants, hotels, health care, manufacturing, building services and warehouse services.  In passing the Ordinance, Chicago has joined a growing number of cities that have also enacted predictive scheduling laws.

Who is Covered?

Chicago employers primarily operating in the covered industries listed above are subject to the Ordinance if they employ more than 100 employees globally (or 250 in the case of non-profit organizations), of whom at least 50 are “covered employees”.  Restaurants are generally covered so long as they have both operations in at least 30 locations and more than 250 employees globally.

The Ordinance is broad in that it covers hourly and salaried employees (subject to the wage requirements below).  Covered hourly employees must earn $26 per hour or less and covered salaried employees must earn $50,000 per year or less.  The Ordinance also covers employees of staffing agencies who are contracted to work at a covered employer for 420 hours within an 18-month period.

What Actions Must Employers Take?

The Ordinance imposes the following requirements on covered Chicago employers:

• Publish employee schedules for covered employees at least 10 days in advance (or 14 days starting July 1, 2022) of the first working day of any new schedule, beginning July 1, 2020.  The schedule must be published in a conspicuous place that is readily accessible and visible to all covered employees or provided through the employer’s “usual methods of communication,” or both.  The schedule must include the days or shifts and on-call status of all covered employees at the worksite.
• In the event of a change with less than 10 days’ notice, provide a covered employee with “predictability pay” in the amount of one hour of pay at the employee’s “regular rate” for each shift that the employer adds or subtracts hours, changes the date or time or cancels altogether.  If the change to an employee’s schedule is made within 24 hours of the scheduled shift, the employee must be provided at least 50% of the employee’s regular rate for every scheduled hour the employee loses because of the change.  Any schedule change with less than 10 days’ notice must be submitted in writing to the employee within 24 hours of the change being made.  The Ordinance does not exempt employers from paying overtime, where applicable, pursuant to the Fair Labor Standards Act.
• Provide covered employees at least 10 hours off in between shifts.  An employee who is required to work a shift that begins less than 10 hours after the end of his or her last shift, must be paid at a rate of 1.25 times the employee’s regular rate for that shift.
• Provide available shifts first to covered employees who are qualified in the employer’s sole discretion to perform the work.  If the offered shift is not accepted, then it may be offered to temporary or seasonal workers who have worked for the employer for at least two weeks. 
• Provide a written response to employees who request a flexible working arrangement.
• Provide new covered employees with a written estimate of anticipated days and hours of work for the first 90 days of employment.  The estimate should include an average number of hours per week, days per week and times or shifts per week that an employee can expect to work and must also indicate whether on-call shifts will be expected of the employee.  Such estimate may be in physical or electronic form sent by text message, email or other computer system.  While the estimate is not contractually binding, it should be made in good faith with the information known to the employer at the time.

Are There Any Exemptions?

The Ordinance lists a few situations in which schedule change requirements do not apply.  Some of the more notable exemptions include: (i) acts of nature, war, civil unrest, strikes, threats to public safety or pandemics (ii) mutually agreed upon shift trades between covered employees; (iii) mutually agreed upon changes between the employee and employer in writing; (iv) changes that an employee requests and confirms in writing; (v) change in hours due to disciplinary reasons; (vi) circumstances outside the control of a manufacturer result in a decreased need for employees; and (vii) self-scheduling by employees pursuant to a mutually acceptable agreement with the employer.

Recommendations for Employers

While the Ordinance lists “threats to public safety” and “pandemics” as exemptions to its requirements, there has been no indication that enforcement of the Ordinance will be postponed due to COVID-19.  The only update since the Ordinance was passed one year ago has been a delay on employees’ ability to bring a private cause of action against their employers until January 1, 2021.  It remains to be seen whether employers will be able to successfully invoke the aforementioned exemptions in defense of any employee claims. 

In the meantime, covered employers should revise their attendance and wage and hour policies, train their managers on the new policies and begin making arrangements for publishing employee schedules.  Employers are also required to post a notice of employee rights in a conspicuous place for all covered employees and also provide a notice to new employees with their first paycheck.  The Commissioner of Business Affairs and Consumer Protection is expected to make available model notices which will be compliant with the above requirement.  It is expected that regulations and other guidance will be issued in the near future.  We will keep you updated as such information is made available.

If you have questions related to coverage or implementation of the Ordinance’s requirements, please contact Naureen Amjad, a Partner and the Leader of Pedersen & Houpt's Employment Law Practice Group, at 312.261.2273 or at namjad@pedersenhoupt.com.