United States: Chicago Passes Ordinance Requiring Employers To Provide Predictive Scheduling For Certain Industries

In the most expansive predictive scheduling law in the country to date, Chicago City officials passed the “Fair Workweek Ordinance” on July 24, 2019, and Mayor Lori Lightfoot has indicated she would quickly sign the Ordinance. The Ordinance provides extensive protection for certain employees with regard to advance scheduling of work. Although employers have some time to get used to the idea, by July 1, 2020, they will need to have a firm plan in place to address this new Ordinance.

Covered Industries: The Ordinance includes the following industries:

• Building Services (such as janitorial services, building maintenance services, and security services)
• Health Care (including health care services or long-term care services that require licensure under various medical care laws)
• Hotels (includes inns, hotels, motels, and other locations where sleeping or rooming accommodations are furnished for hire and for rent, with seven or more sleeping rooms)
• Manufacturing (business involved in the production of tangible goods)
• Restaurants (any business licensed to serve food in Chicago, which also has globally at least 30 locations and at least 350 employees in the aggregate; “Restaurants” does not include businesses limited to three or fewer locations in Chicago that are owned by one employer and operating under a sole franchise)
• Retail (businesses that sell to end users tangible products that are primarily for personal, household, or family purposes, such as appliances, clothing, electronics, groceries, and household items)
• Warehouse Services (storage of goods, wares, or commodities for hire or compensation, which may include the loading, packing, sorting, stacking, wrapping, distribution, and delivery of those goods)

Covered Employers:  The Ordinance covers businesses with 100 or more employees, at least 50 of which are “covered employees,” and nonprofit employers with 250 or more employees.

Covered Employees: Those who are hourly workers earning less than $26.00 per hour and salaried workers earning less than $50,000.00 annually, who perform the majority of their work for a covered employer while physically present within the City of Chicago.

Basic Requirements: The Ordinance requires covered employers to publish work schedules at least 10 days in advance beginning July 1, 2020 and at least 14 days in advance beginning July 1, 2022. A covered employee has the right to decline any previously unscheduled hours that an employer adds to the covered employee’s schedule after the required notice period above unless the change in work schedule is due to: 1) threats to employers, covered employees, or property, or when civil authorities recommend that work not begin or continue; 2) utility outages; 3) acts of nature such as floods, earthquakes, tornados, or blizzards; or 4) war, civil unrest, strikes, threats to public safety, or pandemics. 

If none of these exceptions apply and an employer makes a schedule change after the 10 or 14 day period noted above, in addition to the employee’s regular rate of pay, the employee is entitled to one hour of “Predictability Pay” for each shift in which the employer adds work, changes the date or time of work with no loss of hours, or with more than 24 hours’ notice, cancels or subtracts hours from a regular or on-call shift. If an employer cancels or reduces the number of hours for an employee’s shift with less than 24 hours’ notice, the employee is entitled to Predictability Pay in an amount no less than 50% of his regular pay rate for the scheduled hours. (For instance, if an employee was scheduled to work eight hours at $15 per hour and the employer cuts the employee’s hours to four less than 24 hours prior to the shift, the employee would be entitled to $7.50 for the four cut hours, or $30 extra). No penalty applies if the change in schedule terms are agreeable to the employee.

Although not a fully exhaustive list, the Ordinance also contains the following provisions:

• Union represented employees are able to negotiate terms that exceed the protections provided by the Ordinance, and the requirements of the Ordinance can also be waived in a Collective Bargaining Agreement if the waiver is clear and unambiguous;
• A “right to rest” provision grants covered employees the right to decline work schedule hours that are less than 10 hours after the end of the previous day’s shift and when a covered employee does work a shift that begins less than 10 hours after the end of the previous day’s shift, the employee must be paid 1.25 times his regular rate of pay for that shift;
• Covered employees have the right to request a modified work schedule, additional shifts or hours, changes in days or work, changes in shift start and end times, permission to exchange shifts with other employees (subject to any existing employer policy), reduction in hours, or part time employment. (The Ordinance is silent on whether employers must accept these requests.)
• Employers may subtract hours from a work schedule for disciplinary reasons for just cause, provided the employers document the incident in writing.
• When an employer needs to fill additional shifts, the employer is first required to offer the work to covered employees qualified to do the work. If the offered shift is not accepted by such an employee, the shifts must be offered to temporary or seasonal workers who have worked for two or more weeks. The employer’s distribution of additional shifts cannot discriminate against employees based on legally protected characteristics, and whenever practicable, the employer must first offer the hours to part-time covered employees. The requirements for distribution of additional shifts are not to be construed to require an employer to schedule work hours required to be paid at a premium rate.
• Employers are prohibited from retaliating against employees for exercising their rights under this Ordinance, and acts of retaliation will result in a fine of $1,000.00.

Penalties for Violation: Violations of the Ordinance or its rules can subject an employer to a fine of not less than $300.00 or more than $500.00 for each offense. Each covered employee whose rights are affected constitutes a separate and distinct offense to which a separate fine will apply. The Ordinance also provides for a private cause of action (with a two-year statute of limitations) by any covered employee for his employer’s violation of the Ordinance and the employee may recover compensation for any Predictability Pay wrongfully withheld, litigation costs, expert witness fees, as well as reasonable attorney’s fees. 

Takeaway for Covered Employers: Employers should begin planning for the effective date of this Ordinance by ensuring that scheduling practices will be in compliance, taking steps to ensure the necessary number of employees are hired, and planning from a budgetary perspective to pay the additional wages likely to arise from last minute schedule changes. Employers will also need to create forms that allow them to confirm schedule changes that do not require Predictability Pay (i.e. when the change is either requested by or agreeable to the employee), as such changes must be acknowledged in writing. While the Ordinance will be beneficial for employees and their planning purposes, there will certainly be additional costs associated with compliance, which may ultimately be passed on to Chicago consumers.

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.