Expansive Law Aimed at Predictive Scheduling for Workers, Limiting Employers’ Ability to Unilaterally Change Work Hours

On July 24, 2019, the City of Chicago enacted the “Fair Work Week Ordinance,” requiring that many businesses provide workers with up to two-weeks advance notice of their work hours and schedules. The FWW Ordinance becomes effective on July 1, 2020, and will require employers from a broad spectrum of industries to set most employee schedules at least 10 days in advance.

Subject to some exceptions, if the employer changes the schedule after posting, then it must also provide the employee with “predictability pay” in the amount of one hour of pay. If a change is made within 24 hours of the shift, the employee would be entitled to at least 50 percent of the employee’s regular rate for any scheduled hours not worked due to the change. Employees will also have the right to decline hours which are scheduled within 10 hours after the end of the previous day’s shift. Thus, if an employee agrees to work a shift beginning less than 10 hours after the end of the employee’s last shift, for that shift the employee must be paid 1.25 times the employee’s otherwise regular rate of pay. The Ordinance is expected to have a significant impact on industries where “variable” schedules are most common, including the hospitality, retail, and food and beverage industries.

The FWW Ordinance will apply to businesses having at least 100 global employees, 50 of whom are eligible to be covered by the city’s scheduling rules. Nonprofits will be covered if they have more than 250 employees, 50 of whom primarily work in Chicago. Restaurants must have at least 250 workers and more than 30 locations globally to be covered by the Ordinance (excluding certain smaller restaurants operating under a single franchise). Workers who earn less than $26 per hour or $50,000 per year will be “Covered Workers” under the Ordinance, whereas covered employers will include those in the building services, healthcare, hotels, manufacturing, retail, and warehouse services.

Covered employers must also provide new employees covered by the law with a written estimate of the employee’s projected days and hours of work for the first 90 days of employment, including average hours per week, expected days and times or shifts that the employee can expect to work (or not work), and whether on-call shifts are expected.

The Ordinance includes some limited exceptions. For example, mutually agreed-upon work schedule changes and shift trades between covered employees will not ordinarily violate the Ordinance. The Ordinance also excludes scheduling changes for emergencies for manufacturing and health care employers, such as power outages and blizzards, and disciplinary actions against workers which result in a loss of hours. The Ordinance also carves out an exception for unionized workforces. The Ordinance provides that its requirements may be waived in a collective bargaining agreement if explicitly stated in clear and unambiguous terms.

The penalties for violating the Ordinance include fines of up to $500 for each violation. Although the Ordinance allows private lawsuits for enforcement, as well, an employee must exhaust of various administrative steps prior to doing so, including providing notice to the City of Chicago’s Department of Consumer Protection and Business Affairs, after which the employer has an opportunity to correct the issue before an employee can file a lawsuit.

Chicago becomes the latest of several municipalities with legislation of this type, including New York City, Philadelphia, San Francisco, and Oregon. However, Chicago’s Ordinance is arguably the most expansive of its kind. Employers operating in Chicago should act now to begin formulating a plan to ensure compliance with the Ordinance and minimize its impact, including reviewing existing scheduling policies and making any appropriate updates.