Update: Chicago Employers Must Provide Employees Notice of the New Minimum Wage Ordinance

Posted on June 29, 2015 by mboxerman

minimum wage, wage and hour laws, employment lawAs a follow up to our last blog entry, “Chicago’s New Minimum Wage Ordinance Takes Effect July 1st,” employers who maintain a business facility within the City of Chicago or are required to obtain a business license to operate in the City, must post the Notice of Minimum Wage Increases and Employees’ Rights in their business facilities.  Click here to get a copy of the Notice for your business.

Employers must also provide the Notice with each covered employee’s first paycheck after the wage increases go into effect, as well as in the first paycheck given to new employees hired after the minimum wage increase goes into effect.

For any questions, contact us at (312) 216-2720 or info@marcusboxerman.com

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Chicago’s New Minimum Wage Ordinance Takes Effect July 1st

Posted on June 10, 2015 by mboxerman

Chicago minimum wage, wage and hour laws, employment lawBeginning July 1, 2015, Chicago’s minimum wage increases to $10.00 per hour, an increase of $1.75 per hour. This increase represents the first of a series of incremental minimum wage increases scheduled through 2019 and beyond.  The new ordinance applies to any employer who (i) maintains a business facility within the geographic boundaries of the City or (ii) is subject to one or more of Chicago’s Municipal Code license requirements.  You can find out more by viewing and downloading the new ordinance here.

Employers must pay covered employees the new minimum wage for each hour worked while physically present within the geographic boundaries of the City, provided the employee works at least two hours within City limits over the course of any two-week period. Under the new ordinance, business activity that constitutes work while physically present in the City includes (but is not limited to) deliveries, sales calls and travel related to other business activity within the City. Non-compensable commuting time is not counted for purposes of determining whether an employee is covered by the ordinance.

Employers based outside of the City must be sure to monitor the time an employee spends within City limits to comply with the ordinance. An employer who violates the ordinance will be subject to a fine of between $500.00 and $1,000.00 for each offense. Each day the violation continues constitutes a new and separate offense. The ordinance provides that covered employees may institute a private cause of action for violations of the ordinance. The ordinance permits covered employees to recover up to three times the amount of any underpayment plus attorneys’ fees.

In addition, the minimum wage for employees who work in jobs where gratuities customarily and usually constitute part of compensation (currently $4.95 per hour) will increase to $5.45 per hour beginning July 1st, and $5.95 per hour beginning July 1, 2016.

It is critical that employers begin preparing for the new ordinance to make a seamless transition and to avoid being subjected to potential fines and civil lawsuits.

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Franchisors and Franchisees Possible Joint Employers

Posted on June 10, 2015 by mboxerman

joint employers, employer liability, joint employmentOn December 19, 2014, the National Labor Relations Board (including a regional office in Chicago)  filed 13 complaints against McDonald’s for alleged violations of federal labor laws by its franchisees. The complaints allege that the franchisees and the company punished workers for participating in fast food protests by reducing the workers’ hours or even firing them. Against 50 years of precedent, the NLRB ruled that McDonald’s is a joint employer of the employees of its franchisees, making McDonald’s potentially liable for employment laws broken by more than 3,000 U.S. franchises. The NLRB’s general counsel explained that McDonald’s “wields such extensive influence over the business operations of its franchisees that individual franchise operators have little autonomy in setting or controlling workplace conditions.”

Read the NLRB’s Press Release Here

The NLRB’s action is particularly noteworthy because McDonalds’ franchisees operate under contracts that explicitly relieve McDonald’s from any responsibility for hiring, firing and supervising restaurant employees. Currently, federal anti-discrimination statutes reject the joint employer status of franchisors like McDonald’s, but in wake of this recent NLRB action, other federal agencies may follow suit.

It is unclear whether the courts will accept the NLRB’s ruling, and assuming a settlement is not reached, the 13 cases will be brought before administrative law judges beginning March 30 in Chicago, Manhattan, and Los Angeles.

Impact on Franchise Law

Considering the NLRB’s controversial decision, franchising may be a less attractive business model for the franchisors, as they would become liable for personnel (and potentially other) decisions made by their franchisees, who are traditionally seen as independent business owners.

And franchisees may lose more independence over how they operate their business, while labor unions would be easier to form and could consequently subject more franchisees to the Affordable Care Act’s employer mandate. To read more about the employer mandate, click here.

To learn more about this decision and its implications, contact us at (312) 216-2720.

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