With the holidays right around the corner, and local governments grinding to a halt during the holiday season, the City of Evanston, Illinois recently announced that it will postpone enforcement of its Fair Workweek Ordinance (the “Ordinance”) from September 1, 2023 until January 1, 2024. Although directly affecting just a relatively small number of employers that have a presence in Chicago’s neighboring municipality, the Ordinance is complex and notable for a novel hazard pay mandate.
The Ordinance Untangled
In May of 2023, Evanston’s City Council approved legislation similar to the Fair Workweek Ordinance enacted in Chicago to require certain Evanston employers in the hospitality, food service, retail, warehouse, manufacturing, and building services industries with 100 or more employees globally to provide employees written notice of their work schedules 14 days in advance or else compensate the employees with extra pay. In addition, the Ordinance requires covered employers to provide new hires with a written “good faith estimate” that details the new employee’s projected days and hours of work for the first 90 days of employment, including average number of weekly hours, days, and times of anticipated scheduled duty, and whether or not any on-call shifts are expected.
Covered employers that change or cancel schedules with less than 14 days’ notice will owe workers “predictability pay”—mandatory compensation for schedule changes made by the employer that must be paid at the same rate as regular hourly wages. Covered employers must compensate employees with predictability pay if adjustments are made to an employee’s schedule as follows:
- For changes, including cancellations, with less than 14 days’ advance notice, but more than 24 hours of notice, the employee is entitled to one hour of predictability pay per modified shift.
- For changes and cancellations with less than 24 hours’ notice, the employer must either pay one hour of predictability pay per modified shift or, if a shift is reduced or cancelled, predictability pay of either four hours or the number of hours for which the employee was originally scheduled, whichever is less.
Certain exceptions apply to the predictability pay requirements. The employer is not required to provide predictability pay if schedule changes are due to (1) employee request, (2) just cause discipline, or (3) extenuating circumstances beyond the employer’s control, such as acts of nature, utility failures, or civil unrest. Shift changes induced by the employee must be in writing and acknowledged by the employee to satisfy the exception.
Importantly, if extenuating circumstances cause the employer to require additional hours by an employee, then the Ordinance sets forth further notice requirements that include an explanation to the employee as to why that employee is deemed essential to the employer’s continued operations and mandates that the employee receive an extra $2.00 per hour for the additional hours as hazard pay. The Ordinance makes clear that predictability pay and hazard pay are mutually exclusive, and employees cannot receive both.
Mandate to Prioritize Current Employees
The Ordinance limits covered employers from hiring new employees or contracting with temporary contractors without first posting or providing a written offer of additional available hours to qualified part-time employees. Covered employers are not required to make part-time employees full time, so covered employers need not make more than 35 hours per week available to employees under the Ordinance. If posted or offered, employees may decline the extra work, but if the extra work has an expected duration of over two weeks, covered employers must permit part-time employees 72 hours to consider before hiring new workers.
Under the Ordinance, employees have the right to decline previously unscheduled hours added to their schedule with less than 14 days of advance notice. In addition, similar to the Chicago Fair Workweek’s “right to rest” provision, employees have the right to decline work hours that begin within 11 hours of the end of a prior shift. If an employee agrees to such a shift (sometimes referred to as “clopening” for closing and opening), the employee must be compensated with overtime pay (1.5 the regular pay rate) for any hours worked that are less than 11 hours following the end of a previous shift.
Employees also have the right to request a flexible schedule, such as additional shifts or hours, changes in days of work or shift start and end times, permission to exchange shifts with other employees, limitations on availability, part-time employment, job sharing arrangements, reduction or change in work duties, or part-year employment. The Ordinance prohibits retaliation against workers who exercise their rights.
Furthermore, in connection with the Ordinance’s requirement that the employer provide a written good faith estimate of a new employee’s anticipated schedule prior to or upon commencement of employment, a new hire may request that the employer modify the projected days and hours of work provided, prior to or upon starting the job. Employers can accept or reject such requests at their sole discretion but must notify the employee of its determination within three days of the request.
No Retaliation and Enforcement
The Ordinance prohibits retaliation based on the employee’s exercise of any right granted by the Ordinance. Covered employers are subject to a fine of up to $1,000 per violation of this provision. The Ordinance also imposes a $300 to $500 fine for other offenses with increasing fines for subsequent offenses. Employers are also required to maintain records for at least three years or for the duration of any claim, civil action, or investigation under the Ordinance. The records must contain each employee’s name, hours worked, pay rate, and other records necessary to demonstrate compliance with the Ordinance such as estimates of work schedules, initial posted schedules, changes to schedules, and other consent documentation signed by employees. Covered employers should also be aware that the Ordinance affords a private right of action, subject to a two-year statute of limitations.
Takeaways for Employers in Evanston & Beyond
Any Evanston employer in the affected industry groups should ascertain whether it is covered by this sweeping new law and, if so, take steps now to comply with its requirements by the time it becomes fully enforceable on January 1, 2024. The City has published some limited guidance, which indicates that further materials are forthcoming.
All employers will want to pay attention to this law and whether its ideas – including mandatory hazard pay, limits on hiring new workers in favor of present employees, and other restrictions that are common in collectively bargained agreements at organized workplaces but uncommon in the context of at-will employment – take hold with lawmakers in other jurisdictions. We will be watching and sharing any developments if this ordinance becomes the seed of a new trend.
- Member of the Firm