2020 Illinois, Indiana, and Michigan Labor & Employment Law Year-End Review
Chicago, Ill (January 13, 2021) - In contrast to years past, the COVID-19 pandemic has resulted in fewer changes to employment laws in Illinois, Indiana, and Michigan. The alert contains a summary of the major employment law developments of the past year in those three states.
Increase to Illinois Minimum Wage
Effective January 1, 2021, the minimum wage payable to employees in Illinois increased to $11 per hour. This amount is scheduled to increase on an annual basis until January 1, 2025, at which time the minimum wage will become $15 per hour.
Implementation of Sexual Harassment Training Requirements
A previous amendment to the Illinois Human Rights Act (IHRA) mandated that Illinois employers with one or more employees provide sexual harassment training to their workforces by December 31, 2020. Beginning in 2021, Illinois employers are mandated to provide this training annually. Employers may either develop their own sexual harassment prevention training program or use the model provided by the Illinois Department of Human Rights. If employers develop their own program, it must (1) be consistent with the IHRA and explain what sexual harassment is, (2) provide examples of prohibited conduct, (3) explain federal and state sexual harassment prevention laws, including remedies, and (4) assert the employer’s responsibility to prevent, investigate, and correct sexual harassment. Companies that fail to comply with these measures are subject to civil penalties. For more information, see our previous alert on this topic.
Expansion of Illinois’ Human Rights Act and Reporting Requirements
Effective July 1, 2020, Illinois amended the IHRA so that employers with just one employee may be subject to state discrimination claims. This is a sizable reduction from the prior threshold of 15 employees. Additionally, by July 2021, and before July 1 of each subsequent year, employers must file reports with the Illinois Department of Human Rights noting any final, adverse judgments or administrative rulings entered against them in discrimination or sexual harassment matters for the preceding calendar year.
Illinois Supreme Court Rejects Federal Successor Liability under the IHRA
In a significant decision for employers, issued in September 2020, the Illinois Supreme Court rejected the federal successor liability doctrine for cases in Illinois courts arising under the IHRA.
In People ex rel. Dep’t of Human Rights v. Oakridge Healthcare Center, the Court held that the state’s long reliance on the common law successor nonliability rule precluded adoption of the federal successor liability doctrine for such cases. The common-law rule provides that a corporate successor is not subject for any debts or obligations incurred by the entity that previously operated the business. The principle is known as the “rule of successor corporate nonliability.” It was “developed as a response to the need to protect bona fide purchasers from unassumed liability and was designed to maximize the fluidity of corporate assets.” In its holding, the Court declined to adopt the federal successor liability doctrine, which could have conferred liability on a successor entity if a variety of factors were met.
School Activities Leave Amended
On August 1, 2020, the School Visitation Rights Act was amended by Illinois Public Act 101-0486 to prevent employers from terminating employees for taking time off of work for attendance at a school conference, behavioral meeting, or academic meeting.
Chicago Fair Workweek Ordinance: Predictive Scheduling
The Chicago Fair Workweek Ordinance went into effect on July 1, 2020. Employees are covered by the ordinance if they work in one of seven “covered” industries (Building Services, Healthcare, Hotels, Manufacturing, Restaurants, Retail, and Warehouse Services), make less than $26/hour or $50,000/year, and work for an employer that has at least 100 employees globally (250 employees and 30 locations for restaurants, or 250 employees for non-profits). Covered employees must be given:
- Ten days advance notice of work schedule;
- Right to decline previously unscheduled hours;
- One hour of Predictability Pay for any shift change within 10 days unless an exception applies;
- Right to rest by declining work hours less than 10 hours after the end of previous day’s shift, or payment of 1.25 times the employee’s regular rate for all hours in the second shift if worked; and
- 50% pay for hours removed from the schedule with less than 24 hours’ notice.
A COVID-19-related emergency rule of the Chicago Department of Business Affairs and Consumer Protection (BACP) that went into effect on July 1, 2020 creates an exception to the obligation to pay predictability pay if the work schedule change is caused by certain circumstances, including a “pandemic.” The Rule confirms that the ongoing COVID-19 emergency is a qualifying pandemic. However, the BACP noted that a work schedule change would only be considered “because” of COVID-19 “only when the pandemic causes the Employer to materially change its operating hours, operating plan, or the goods or services provided by the Employer, which results in the Work Schedule change.” Further, the exception will apply only to the work schedule change caused by the event (i.e., the employer’s material change because of the pandemic) and the “work schedule immediately following.”
As of January 1, 2021, employees may initiate a private lawsuit against their employer for violations of the Ordinance.
Chicago Substitute Ordinance 2020-2343: Predictive scheduling COVID-19 Relief
As of July 1, 2020, employees are protected from adverse employment action taken due to COVID-19. The ordinance also revises Chicago’s Paid Sick Leave Ordinance by reversing some amendments previously enacted in December 2019 that were set to take effect on July 1, 2020. The revisions essentially redefine employee coverage.
Chicago Minimum Wage and Paid Sick Leave Rules Supporting Chapter 1-24 of the Municipal Code of Chicago
This ordinance went into effect on July 1, 2020. It revises paid sick leave rules, employer notice requirements, recordkeeping requirements for employers with tipped and non-tipped employees, and complaint-filing procedures.
Relevant Developments to Illinois’ Biometric Information Privacy Act
The law related to the Illinois’ Biometric Information Privacy Act (BIPA) in the employment setting continues to develop.
In McDonald v. Symphony Bronzeville, the Illinois Appellate Court for the First District held that the exclusivity provisions of the Illinois Workers Compensation Act (IWCA) did not bar a claim for statutory damages under BIPA where an employer was alleged to have violated an employee's statutory privacy rights during the course of employment. The issue is currently on appeal to the Illinois Supreme Court.
BIPA does not explicitly provide for a statute of limitations, and most courts that have addressed the issue have noted that BIPA has a five year statute of limitations based on Illinois’ “catch all” statute of limitations. However, the Illinois First District Appellate Court in Tims v. Black Horse Carriers, Inc. is scheduled to decide if a shorter one year statute will control. The Second and Third District Appellate Courts are also reviewing the proper statute of limitations for BIPA claims, presenting an opportunity for conflicting rulings, and consequently, ultimate examination of the issue by the Illinois Supreme Court.
Finally, on August 9, 2020, Judge John Tharp of the U.S. District Court for the Northern District of Illinois indicated that a “per scan” violation theory of BIPA may be viable in one of the first opinions to address this theory directly, observing that a violation of BIPA’s notice and consent provision occurs “when [a defendant] collects, captures, or otherwise obtains a person’s biometric information without prior informed consent” and that “[t]his is true the first time an entity scans a fingerprint … but it is no less true with each subsequent scan or collection.” (emphasis added). In other words, each time an employee touches the clock could be a violation. Judge Tharp also determined that a violation likewise occurs each time an entity discloses or disseminates biometric information in violation of Section 15(d) of the Act. In short, “each time an entity discloses or otherwise disseminates biometric information without consent, it violates the statute.” BIPA provides for a statutory penalty of $1,000 for each negligent violation or $5,000 for each reckless/intentional violation. White Castle has sought interlocutory appeal to the U.S. Court of Appeals for the Seventh Circuit.
Microchip Implantation Restriction
Effective July 1, 2020, the Indiana Department of Labor began prohibiting employers from requiring employees or candidates for employment to have a device implanted or otherwise incorporated into the candidate’s or employee’s body as a condition of employment in a particular position, or as a condition of receiving additional compensation or benefits.
Enforcement of Minor Work Permit Requirements
Effective September 8, 2020, the Indiana Department of Labor again began enforcing the requirement for employers to have on-file work permits for minor employees as required by Indiana law. Employers are not required to obtain work permits from minors who (1) have been legally emancipated, (2) have graduated from high school (or its equivalency), (3) attend homeschool, (4) are non-residents of Indiana, (5) are enrolled in a Career and Technical Education program, or (6) are working for a business that is solely-owned by a parent.
No Change to Minimum Wage in Michigan
Despite previous reports indicating that Michigan would implement annual incremental changes to the state minimum wage, in 2021, Michigan’s minimum wage will remain $9.65 per hour.
An Employer’s Ability to Secretly Record Conversations in Michigan
Until recently, employers and employees believed that secret recordings of each other in Michigan to be legal because Michigan was a “one party consent” state. As such, a participant who records a private conversation absent the consent of all other participants would not be liable for illegal activity under Michigan’s eavesdropping statute.
However, in 2019, in AFT Michigan v. Project Veritas, the U.S. District Court for the Eastern District of Michigan found that Michigan was a two-party consent state for recording purposes. The Court concluded that the Michigan Supreme Court would not permit a participant or “any person present” or not present during a conversation where there was a reasonable expectation of privacy, to willfully use any device to overhear, record, transmit, or amplify that conversation without the consent of “all parties thereto.” In its ruling, the district court stated that a prior holding by the Michigan Court of Appeals deeming Michigan a “one party consent” state, “contravenes the Legislature's intent made clear by the plain, unambiguous language of the statute.”
The U.S. Court of Appeals for the Sixth Circuit declined interlocutory appeal, and the Michigan Supreme Court has yet to opine as to whether Michigan is a one- or two-party consent state. The Michigan Attorney General has requested that the Michigan Supreme Court interpret Michigan’s eavesdropping statute and definitively determine whether Michigan is a one- or two-party consent state.
For more information on the laws and cases referenced herein, contact the authors or editors of this alert, or visit our Labor & Employment Practice page to find an attorney in your area.
Kenneth D. Walsh, Associate
Alishba N. Malik, Associate
Mary A. Smigielski, Partner
Thalia S. Rofos, Partner