Illinois's New Happy Hour Law is Here. Proceed With Caution.
On July 15, 2015, Governor Rauner signed SB 398 into law, repealing the restrictions on happy hours that have been law since 1989.
While the new law allows some forms of happy hour, restaurants and bars have to now worry about a whole new set of laws. In short: all bets are NOT off. If you want to have a happy hour, you will have to avoid some major pitfalls.
Although it is no substitute for reading the actual statute, and although your particular situation may fall under an exception, here's the basics of new law in plain English:
- Retailers must maintain a list of regular drink prices.
- No 2-for-1 specials allowed (or 3-for-1, 4-for-1, etc.)
- No all-you-can-drink specials (with certain exceptions)
- If you increase the size of a drink, the price must increase proportionately. In other words, retailers can't skirt the 2-for-1 prohibition by increasing drink size and keeping the price the same.
- Licensees can not "encourage or permit" drinking games or give alcohol away as a prize for a contest.
- You can't advertise any of the above.
Those rules imply that the only promotion allowed is a discount on certain drinks for a fixed period of time. BUT, a licensee is only allowed to do that kind of happy hour in certain ways. This is what is permitted:
- Certain party packages
- Certain meal packages
- Certain hotel packages
- Discounts on drinks during a set period if:
- the price of a drink doesn't change during that time period. This would imply that everyone has to be eligible for the promotion: no ladies nights or similar promotions.
- the Happy Hour does not exceed 4 hours per day and 15 hours per week.
- the Happy Hour ends at 10 P.M.
- notice of the discount is posted on the licensed premises or on the licensee's publicly available website at least 7 days prior to the specified time. So plan ahead and keep records.
While we've entered a new era of happy hours, retailers need to make sure that they are operating within the new law. There are too many instances where a licensee can get tripped up.
As always, if you want to discuss your particular situation, don't hesitate to call. We're here to help.
BTW: When the new law was announced, a few mainstream publications and websites unbelievably linked to an FAQ about the OLD law! Watch out!
by Daniel Rubinow, Principal Attorney
License Law Group