Chicago became the latest city to adopt a “predictive scheduling” ordinance: the Chicago Fair Workweek Ordinance.
Effective July 1, 2020, employers subject to the Ordinance must provide advance notice of work schedules to covered employees. If changes are made to the posted schedule, employers must pay additional wages, “predictability pay,” as a penalty. This penalty applies to both increases and reductions of shifts.
The Ordinance is similar to ordinances in other major cities such as New York, Philadelphia, San Francisco and Seattle. The stated goal of the new regulation is to provide predictability and stability to Chicago workers. It requires careful review as the regulation is rife with exceptions and exclusions.
“Employer” is defined as any foreign or domestic individual, agency, or entity that “employs or exercises control over the wages, hours or working conditions of one or more Employees.”
To qualify, the individual, group or entity must either:
- Maintain a business facility within the geographic boundaries of the City, or
- Be subject to one or more of the license requirements in Title 4 of the Municipal Code, and
- Employ 50 or more individuals in the aggregate within a dwelling unit, residence, or any other location.
The definition includes:
- Businesses that globally employ over 100 employees and are primarily engaged in the building service, health care, hotel, manufacturing, restaurant, retail or warehouse services industries;
- Not-for-profit corporations in such industries if they employ 250 or more employees;
- Restaurants with 30 locations and 250 employees globally;
- Franchises with 4 or more Chicago locations.
- Employers subject to the Railway Labor Act;
- Employers with an extant collective bargaining agreement;
- Employers engaged in the construction industry; and
- Warehouse operators that compete with the US Postal Service for last mile delivery.
- Perform the majority of their work within the City of Chicago;
- Perform the majority of their work in a “covered industry”; and
- Earn less than $50,000 a year, for salaried employees, or less than $26 an hour, for hourly employees.
* While the ordinance does not cover contractors, it does cover temporary workers, so long as the workers are on assignment with an employer for 420 hours in an 18-month period, and they meet the three criteria outlined above. The minimum salary/ hourly wage requirements are set to increase annually based on the increase in the Consumer Price Index.
What does the Ordinance require?
Advance Posting of Schedule. The Ordinance requires employers to post work schedules in advance and pay covered employees for schedule changes that occur after the posting deadline.
- Similar to many other predictive scheduling laws, when the law goes into effect on July 1, 2020, covered employers must publish schedules for covered employee at least 10 days before the first working day of any new schedule. This requirement will increase to 14 days starting July 1, 2022.
- The posted schedule must include the shifts and on-call status of all covered employees at the worksite.
- Upon written request of a covered employee, the employer must transmit the schedule to employees electronically.
- Employers also must post amended work schedules and transmit said schedule to covered employees within 24 hours of a schedule change.
Predictability Pay. When an employer changes the schedule after the posting deadline, then the employer must provide the employee with “predictability pay.”
- Predictability pay is one hour of pay at the employee’s regular rate of pay. However, if a change is made within 24 hours of a shift, the employee is entitled to at least 50% of their regular rate for any scheduled hours they would have worked, but did not work, due to the change.
- There are exceptions.
- These obligations do not apply when schedule changes result from workplace threats or civil authority recommendations not to work; when public utilities fail to supply electricity, water, gas of sewer services; or other acts of nature, war, civil unrest, strikes, threats to public safety or pandemics.
- And employees are not entitled to predictability pay when they mutually agree to trade shifts, or mutually agree in writing to accept additional shifts offered by their employer, or when they voluntarily request changes.
Additional Requirements. The Ordinance addresses more than just schedule changes.
- The Ordinance dictates that if a shift becomes available, the shift must first be offered to covered, qualified employees. Only if shifts are not accepted, can they then be offered to temporary or seasonal workers who have worked for the employer for two or more weeks. This means a covered employer cannot hire new workers to cover missed shifts (a provision which seems designed to make more employees eligible for coverage under the Affordable Care Act).
- The Ordinance penalizes employers who fail to provide employees with at least 10 hours off in between shifts.
- Covered employers must provide new employees covered by the law with a written estimate of the employees’ schedule. This estimate should include their projected days and hours of work, 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.
Enforcement and Fines. The Chicago Department of Business Affairs and Consumer Protection enforces and administers the Ordinance. It is expected to adopt administrative rules before the Ordinance’s effective date.
- Employers who violate the Ordinance are subject to a $300 to $500 fine. The Ordinance also provides for a $1,000 fine for retaliation. Violations for each employee are considered a separate offense, and each day of violation constitutes a separate offense. The possible penalties for non-compliance with the Ordinance can increase rapidly.
- Employees can file an administrative complaint within two years of a violation. The Ordinance also provides for a private right of action against an employer that fails to successfully contest or remedy a violation and eliminate the basis for any future similar complaints. An employee who prevails is entitled to an award of any lost compensation, the unpaid predictability pay, and litigation costs and attorneys’ fees for any violation.
- The Ordinance is likely to face several preemption arguments. For example, hospitals are already subject to state laws re scheduling of nurses and may mount a successful preemption argument. The ban on new hires may be preempted by the Employee Retirement Income Security Act (ERISA).
With predictive scheduling laws growing in number and complexity, employers should:
- Conduct audits of their current scheduling policies;
- Prepare for implementing new policies or revising existing policies to satisfy the Ordinance; and
- Roll out policies and practices before the July 2020 effective date.
For more information, please contact your Baker & McKenzie attorney.