Chicago's Fair Workweek Ordinance and Minimum Wage Increases Are Here – Are You Ready?
Illinois and Chicago employers navigating reopening during a pandemic now have something else to deal with: new laws taking effect on July 1, 2020. The changes bring not only new state and local minimum wages but also the new Chicago Fair Workweek Ordinance.
These are the new minimum wages taking effect for the State of Illinois, Cook County and City of Chicago:
- The Illinois rate increases to $10 per hour.
- The Cook County rate increases to $13 per hour, and the base wage for tipped employees increases to $5.30 per hour.
- The City of Chicago rate increases vary depending on the size of the employer:
- For employers with four to 20 workers, the minimum wage increases to $13.50 per hour, while the base wage for tipped workers increases to $8.10 per hour.
- For employers with 21 or more workers, the minimum wage increases to $14 per hour, while the base wage for tipped workers increases to $8.40 per hour.
- A tipped worker's wages plus tips need to equal at least the full minimum wage, or else the employer must make up the difference.
July 1 also ushers in Chicago's Fair Workweek Ordinance (the Ordinance) which takes effect after unsuccessful efforts to delay implementation in light of the COVID-19 crisis. The Ordinance requires certain employers in the building services, health care, hotel, manufacturing, restaurant, retail, and warehouse services industries to, among other things, provide covered employees with their work schedules for each calendar week at least 10 days in advance of the start of that calendar week. (Starting July 1, 2022, this notice period increases to 14 days.)
To be a "covered employer" in one of the foregoing industries (each of which has its own definition), an employer must have at least 100 employees globally (250 employees if a nonprofit), at least 50 of whom are "covered employees" who earn $26 per hour or less (if paid hourly) or $50,000 annually or less (if paid on a salaried basis), and are primarily engaged in the above-listed industries. Restaurants receive some relief and are a covered employer under the Ordinance only if they globally have at least 30 locations and 250 employees in the aggregate, and certain small, local franchises of larger chains are also exempted.
Once a workweek schedule is provided to employees, the Ordinance limits how an employer can change the schedule without incurring monetary penalties, which primarily take the form of requiring the employer to pay additional wages to the employees who have their schedules affected. Aside from the scheduling requirements and penalties, the Ordinance also requires employers to fill vacant shifts by offering open shifts to employees in a certain order. And, notably, because exempt employees can be a covered employee under the Ordinance, the Ordinance will require employers to give schedules to employees who may not normally work under a set work schedule.
In response to COVID-19, the City of Chicago did provide limited relief to employers subject to the Ordinance. If the current pandemic causes an employer to materially change its operating hours or plans, or its goods or services, then an employer may change the schedule for the week in question and the immediately following week without penalty.
A copy of the Ordinance's required poster can be found online.
Please reach out to your Much attorneys for any assistance in understanding or implementing these changes.