Complete Guide: The Fair Workweek Ordinance for Retail

Who is considered a “covered” employer or employee?

Employers are considered ‘covered’ based on the amount of employees they have and amount of locations worldwide. For instance, in Chicago a covered employer is someone who has over 100 employees (250 or more in non-profit businesses) and 50 of those employees are covered. The following types of employees are considered covered under the Fair Workweek Ordinance:

• Employees who are entitled to overtime pay under State or Federal laws
• Retail front desk or front-of-house employees who greet and/or provide service to customers
• Employees who work in the direct provision of retail (this also includes floor managers)
• Persons involved in maintenance at a retail location (work has to involve occasional response to customer requests)
• Persons involved in security at a retail location (work has to involve occasional customer contact)
• Pharmacy and/or medical staff at a retail location
• Employees who complete sales (delivery drivers)

So, what does the Fair Workweek Law actually mean?

The retail Fair Workweek Ordinance is a wide piece of legislation that has implications for retail, hospitality, and food service employees that fall under the requirements. It is currently estimated that over 1.8 million employees are expected to be impacted by Fair Workweek’s requirements. As an employer, you are encouraged to consult with your own legal counsel to determine the appropriate procedures and policies to properly comply with the Ordinance.

This new Ordinance has two particularly important components for operators to be cognizant of. There is a distinction that exempts employers from paying predictability pay when “war, civil unrest, strikes, threats to public safety, or pandemics” leads to a schedule change. As we are in the midst of a global pandemic, this is a complication. It remains unclear if an exemption will be applied. 

Second, the Ordinance states that employers are not required to complete predictability pay when a schedule change is “mutually agreed upon” by the employer and employee, or if the covered employee requests a shift change that is confirmed in writing. If this information is not in writing or gets miscommunicated, it could mean a hefty fine.

Front-line managers and payroll personnel must be trained by employers to comply with new scheduling policies and requirements. Employers also should be getting into the habit of seeking employee agreement to shift modifications as much as possible. This is more favorable to require employees to work atypical shifts. It is also important to put in writing the agreed-upon shift changes made after the work schedule has been posted and have the employee sign it. As of now, employers are required to give employees 10 days notice of their schedules, but this will increase to 14 days in 2022.

According to the Ordinance, Employees will have the right to decline to work previously unscheduled hours and be paid for an additional hour of work if their schedule changes within the 10 days. They also have the “right to rest”, which means they can decline a new shift less than 10 hours after the end of their previous shift.

What is predictability pay?

Employers will be required to pay one hour of predictability pay any time they add to an employee’s work shift or change the date/time/location of a shift, with no loss in hours. This ‘predictability pay’ is a way for employees to cover themselves in the event of a loss in hours. There are a few exceptions to this, including:

• An employee voluntarily works additional hours due to another employee’s inability to work (has to be in response to a written communication offering the hours that makes it clear that the employee accepting hours is doing so voluntarily). 
• If an employee makes a written request to change his or her schedule.
• Any other voluntary trades in shifts.

What is a good faith estimate?

A good faith estimate is a document provided at the time of hire by a covered employer that articulates an estimate of what the employee’s work schedule will be. However, sometimes this estimate is not perfect. The requirements for a good faith estimate are as follows:

• The posted work schedule must include all employees’ shifts, whether they are scheduled to work (or be on call) that week or not.
• An employee’s work schedule has to be posted no later than 10 days before the start of a new schedule.
• A written notice of the work schedule must be in an accessible and clear location where the rest of the employee notices are posted. Electronic postings of the schedule should also be posted in locations typically viewed by employees.

How does this affect hiring new employees?

As we have seen, reopenings are calling for an increase in new employees. However, now there is complying with the Fair Workweek Ordinances on this to navigate. The rhetoric is that employers must offer any additional hours to current employees before they can hire new employees. This action protects the current employees of your establishment and ensures that the new person you hire will be able to work enough hours to make ends meet.