Cities Legislate Employee Rights in Response to COVID-19

Since COVID-19 first reared its ugly head in the U.S. earlier this year, cities across America have played a significant role in responding to the public health crisis. Among other things, city governments have issued stay-at-home orders and implemented protective face-covering requirements. Beyond triggering these measures directed at the general public, COVID-19 is also leading to municipal legislation in the employment context. While some changes may be temporary, others will not. The impact of the crisis on employee rights could be substantial. 

Mandatory Scheduling Ordinances

Even before COVID-19 struck, a number of municipalities were taking steps to enact fair scheduling ordinances to give employees some certainty about their work schedules. In general, these measures require covered employers to give covered employees a certain amount of advance notice about when they are scheduled to work. In some cases, changes to a schedule after the notice period has expired will result in affected employees being awarded “predictability pay,” a premium designed to compensate them for an untimely schedule change.

These fair scheduling ordinances are likely to gain more traction in light of the pandemic. One consequence of COVID-19 is that it has magnified how difficult it is to juggle work and family when childcare options are limited. This has already brought into the spotlight issues that hourly employees face when their schedules change with little notice and, among other things, they struggle to find childcare. For this reason, even more local governments are expected to enact scheduling ordinances in the future. 

On the other hand, while in the midst of the crisis, some municipal governments have actually taken temporary steps to relax their fair scheduling ordinances. For example, the City of Philadelphia has put “on hold” the requirement of premium pay under the Philadelphia Fair Workweek Law if a shift is cancelled due to COVID-19.¹ Likewise, the Chicago Business Affairs and Consumer Protection Department (the “CBACPD”) recently clarified that scheduling changes made because of the COVID-19 pandemic need not comply with the requirements outlined in Chicago’s Fair Workweek Ordinance (the “Chicago FWO”).² While this may seem a welcome development, employers are cautioned about relying on this exemption, which only applies when the schedule change is required because the pandemic has caused the employer to “materially change its operating hours, operating plan, or the goods or services provided ….”

The current public health crisis has also resulted in a reprieve for employers with respect to private employee lawsuits under the Chicago FWO. With the July 1 deadline looming and most businesses still closed or operating at a reduced capacity, the City Council amended the ordinance to delay the filing of private employee lawsuits until January 1, 2021. However, the amendment did not otherwise change the effective date of the ordinance, meaning that the City’s Office of Labor Standards within the CBACPD will begin enforcement as planned on July 1.³  

Unfortunately, while employers might applaud this temporary reprieve from employee lawsuits, the proposed amendment does nothing to delay the ordinance’s most exacting requirements. This is an ordinance with teeth. As of July 1st, the CBACPD will have the power to investigate violations of the Chicago FWO and levy fines of between $300 and $500 per day, per employee. Thus, a covered employer who fails to provide appropriate scheduling notice for ten of its employees for a single workweek (Monday-Friday) could be subject to a fine of up to $25,000.⁴

Anti-Retaliation/Paid Sick Leave Ordinances

Employers should also expect to see municipalities take steps to enact or expand paid sick leave requirements and prohibit retaliation against employees because they take time off as a result of COVID-19. At an emergency meeting in late March 2020, the Los Angeles City Council approved an ordinance that required employers in LA with over 500 employees to provide the emergency paid sick leave and expanded family medical leave that was required of smaller employers under the Families First Coronavirus Response Act. The ordinance was later supplanted by an Executive Order⁵ issued by Mayor Eric Garcetti that – while expanding paid sick leave – attempted to strike a balance between the need to protect employees and the need to ensure that the businesses who employ them are able to function. Other municipalities, including the City of San Jose, have passed ordinances similar to that passed by the LA City Council.⁶

Chicago likewise has amended its Paid Sick Leave Ordinance (“PSLO”), expanding it to cover some individuals who were removed from coverage under a previous amendment passed in December of 2019. Attributing the need for the changes to a “scrivener’s error,” the more recent amendment – which was passed on May 20, 2020 and will take effect on June 1 – extends paid sick leave to those who work as outside sales representatives, members of religious corporations or organizations, and student-workers of accredited colleges and universities in Chicago.

Chicago has also adopted an anti-retaliation provision that protects employees against retaliation for taking time off in response to COVID-19. The ordinance provides that an employer may not take adverse action against a covered employee for obeying orders requiring them to stay at home in order to: (1) minimize the transmission of COVID-19; (2) recuperate from symptoms of the virus or the virus itself; (3) obey a quarantine order issued to the covered employee; (4) comply with an isolation order issued to the covered employee; and (5) obey an order issued by the Commissioner of Health regarding the duties of hospitals or other congregate facilities.⁷

For purposes of the ordinance, the employee is protected if he or she is complying with orders from the Mayor of Chicago, the State of Illinois, the Chicago Department of Public Health or – in the case of subparagraphs (2) through (4) – the employee’s treating physician. In addition, an employer cannot take an adverse action against a covered employee because he or she is caring for an individual subject to subparagraphs (1) through (3).

Penalties for violating the ordinance are steep and – like the enforcement provisions of the Chicago FWO – include both agency action and private rights of action by affected employees. In a private civil action, employees can obtain reinstatement to the same or an equivalent position, damages equal to three times the wages lost as a result of the retaliatory action, other actual damages, and attorneys’ fees and costs. 

Right of Recall Ordinances

In anticipation of businesses eventually reopening, some municipalities are passing ordinances that provide laid-off employees with a right of recall. For example, on April 29, 2020, LA passed a recall ordinance (signed by Mayor Garcetti) that applies to a limited group of businesses, including airports, commercial property employers who employ 25 or more janitorial, maintenance, or security employees, event centers, and hotels who have 50 or more guestrooms or gross receipts exceeding $5 million in 2019, as well as their on-site restaurant facilities.⁸

The ordinance gives recall rights to certain laid-off workers, meaning a person who in a particular week performs at least two hours of work within the city’s geographical boundaries, worked for the employer in question for six months or more, and who was most recently separated from active employment on or after March 4, 2020 because of a reduction in work force, lack of business, or some other non-disciplinary reason. The ordinance provides a rebuttable presumption that any termination after that date was due to a non-disciplinary reason. It does not require recall of managers, supervisors, confidential employees or persons whose primary duty is sponsorship sales for an event center.

Employers must recall “Laid Off Worker[s]” who are “qualified” when positions become available in the order of priority set forth in the ordinance. An employee is qualified if he or she “held the same or similar position” at the time of his or her most recent separation or “is or can be qualified for the position with the same training that would be provided to a new worker hired into that position.” If more than one worker is entitled to preference for a position, the employer is required to offer it to the employee with the greatest length of service, with length of service at the particular employment site being the tiebreaker.

If the employer fails to comply, the employee may – after providing notice and an opportunity to cure the violation – commence a civil suit. In addition to reinstatement, the employee may seek to recover the greater of his or her actual damages or $1,000. Punitive damages are also available. A prevailing employee can recover his or her attorneys’ fees, as can a prevailing employer who persuades the Court that the employee’s lawsuit was frivolous. 

Employers Must Monitor and Adapt to Greater Municipal Regulation

The COVID-19 pandemic brought into sharp relief the vulnerability of businesses that serve the public and the employees who earn their paychecks providing that service. State and local governments played a significant role in shelter-in-place or stay-at-home orders, which led to millions of employees being furloughed or laid off. Now, as the stay-at-home orders begin to ease, local governments are creating significant new employee rights. The impact of more regulation creates additional challenges for businesses as they strive to call back employees and resume customer services. Only time will tell if the local government action in this area will help or hinder businesses attempting to return to pre-COVID levels of activity and employment.

Either way, employers must stay abreast of developments at the municipal level as city governments take a greater entrée into labor and employment issues. The following actions are recommended:

• Pay special attention to existing scheduling practices, as well as employee communications about schedule changes. Develop a system of planning, notifying, and documenting. Mandatory scheduling laws in the era of COVID-19 pose unique challenges that need to be identified before they result in lawsuits or government investigations.

• Engage in direct discussions with any employee who is seeking time off or an accommodation due to specific impacts of COVID-19. Anti-retaliation laws such as the new Chicago ordinance raise the stakes if an employer is found to have unlawfully disciplined or discharged an employee who took leave for valid reasons related to COVID-19.
• Make decisions about layoffs, furloughs and return-to-work offers with an eye toward  federal, state, and now, more than ever, local laws that impact recall and hiring decisions. 
• Consult with experienced labor and employment lawyers when considering how to respond to an employee policy violation to reduce the risk of violating a local ordinance and exposing the business to significant monetary damages.

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This article first appeared in Law360. It is reprinted with permission.

Julie Trester (https://www.cozen.com/people/bios/trester-julie) and Jeremy Glenn (https://www.cozen.com/people/bios/glenn-jeremy) are members of Cozen O’Connor’s national labor and employment law practice. Both of the authors work from the firm’s Chicago office and have significant experience in counseling and representing companies with respect to laws impacting the employer-employee relationship.