Brief Summary: Effective December 31, 2023, employers with one or more employees working in the city of Chicago will be required to provide up to 40 hours of paid sick leave and an additional 40 hours of paid leave (for any reason) per year. This new Chicago city ordinance replaces its current paid sick leave ordinance.
Read on for more information.
On November 9, 2023, the Chicago City Council passed the “Chicago Paid Leave and Paid Sick and Safe Leave Ordinance,” heralding it as the “most progressive paid time off legislation at the municipal level in the United States.”
This new Chicago paid leave ordinance (hereinafter referred to as the “Ordinance”) requires employers with employees working in Chicago to provide 40 hours of paid sick leave and an additional 40 hours of paid leave for any reason per year. The Ordinance replaces the current Chicago paid sick leave ordinance and goes into effect on December 31, 2023.
Covered Employers & Employees
Employers subject to the Ordinance include nearly all employers with one or more employees.
Employees covered under the Ordinance include all employees, including part-time and temporary employees, who work at least two hours for an employer in any two-week period while physically present within the geographic boundaries of the city of Chicago. Time spent traveling in the city of Chicago that is compensated time, including deliveries and sales calls, will count as work performed in the city of Chicago for these purposes.
Additionally, the following employees are also exempt from the Ordinance requirements:
- Employees as defined under the federal Railroad Unemployment Insurance Act or the Railway Labor Act
- Employees covered under a bona fide collective bargaining agreement (CBA) working in the construction industry.
- Employees covered under a bona fide CBA in effect on January 1, 2024.
- Employees covered under a bona fide CBA in effect after January 1, 2024 that clearly and unambiguously waives the Ordinance requirements.
Ordinance Paid Sick Leave & Paid Leave Highlights
The table below highlights the significant requirements (and any applicable differences) between the Ordinance’s requirements for paid sick leave and paid leave for any reason:
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Ordinance Requirement
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Paid Sick Leave
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Paid Leave For Any Reason
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Accrual Per 12-month Period
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One hour for every 35 hours worked in hourly increments (not fractional)
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One hour for every 35 hours worked in hourly increments (not fractional)
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Accrual Limit Per 12-month Period
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40 hours unless employer sets a higher limit
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40 hours unless employer sets a higher limit
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Waiting Period to Use Leave
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30 calendar days after employee’s date of hire
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90 calendar days after employee’s date of hire
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Minimum Increment for Use of Leave
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Not to exceed 2 hours
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Not to exceed 4 hours
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Carryover
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80 hours
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16 hours
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Frontloading 40 hours (instead of accrual system)
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Permitted
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Permitted and accrued, unused paid leave time does not carry over to the next 12-month period.
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Covered Reasons for Use of Leave
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See Ordinance Paid Sick Leave covered reasons section below.
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Any reason, similar to the Illinois Paid Leave requirement in 2024.
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Unlimited Paid Time Off Policies
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If granted upon hire or the first day of the 12-month accrual period, then employers are not required to carryover accrued, unused time into the next 12-month period.
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If granted upon hire or the first day of the 12-month accrual period, then employers are not required to carryover accrued, unused time into the next 12-month period.
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Payout Upon Termination of Employment or Transfer Outside of Chicago
*Employers are advised to consult with their employment and labor law counsel to determine how this Ordinance pay-out provision interacts with the Illinois Wage Payment and Collection Act.
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Accrued, unused paid sick leave time not required to be paid out, unless a CBA provides otherwise.
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Accrued, unused paid leave time must be paid out.
- “Large Employers” (over 100 covered employees): required to pay out all accrued, unused paid leave time.
- “Medium Employers” (51-100 covered employees): must pay out 16 hours until December 31, 2024.
On or after January 1, 2025: all accrued, unused paid leave must be paid out.
- “Small Employers” (1- 50 covered employees): not required to pay out accrued, unused paid leave time.
**Employees working outside of Chicago are not counted for purposes of payout upon termination.
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Requesting Leave
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Employers may require employees to provide notice of up to 7 days in advance of taking paid sick leave when the need for leave is reasonably foreseeable, including for prescheduled health care appointments and for domestic violence case court dates.
If the need for paid sick leave is not reasonably foreseeable, employers may require employees to provide notice as soon as practicable.
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Employers may require employees to:
- provide reasonable notice of their need to take paid leave, not to exceed seven days in advance
- obtain advance approval from employer prior to taking leave to maintain employer operations
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Documentation of Leave
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Employers may require documentation that paid sick leave was used for a permitted reason for absences of more than 3 consecutive workdays. Documentation may include a health care provider note, police report, and court document, amongst others.
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None required.
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Ordinance Paid Sick Leave Covered Reasons for Use:
- A covered employee is ill or injured, or receiving medical care, including preventive care, diagnosis, or treatment, including for mental, behavioral, or substance abuse disorders;
- A covered employee’s family member is ill or injured, or ordered to quarantine, or receiving medical care, including preventive care, diagnosis, or treatment, including for mental, behavioral, or substance abuse disorders;
- A covered employee or their family member is the victim of domestic violence, a sex offense, or trafficking;
- A covered employee’s place of business is closed due to a public health emergency or needs to care for a family member whose school, class, or place of care has been closed.
- A covered employee obeys an order issued by the Mayor, the Governor of Illinois, the Chicago Department of Public Health, or a treating healthcare provider, requiring the covered employee to:
- stay at home to minimize the transmission of a communicable disease;
- remain at home while experiencing symptoms or sick with a communicable disease;
- obey a quarantine and/or isolation order issued to the covered employee
Rate of Pay
Employees must be paid their regular hourly rate of pay when using time under the Ordinance. Employees who are typically paid gratuities must be paid the greater of their hourly rate or the applicable minimum wage.
The regular rate of pay for non-exempt employees under the Ordinance is calculated by dividing the employee’s total wages by their total hours worked in full pay periods of the prior 90 days of employment.
Exempt employees are deemed to work 40 hours per week unless their regular workweek is less than 40 hours, in which case time under the Ordinance accrues based on their regular workweek.
New Ordinance Paid Sick Leave vs. Current Chicago Paid Sick Leave Ordinance
The table below highlights the significant differences between the current Chicago paid sick leave ordinance and the new paid sick leave requirements under the new Ordinance, in effect on December 31, 2023. As a reminder, the paid sick leave requirements under the Ordinance replace the current Chicago paid sick leave ordinance on December 31, 2023.
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Requirement
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Current Chicago Paid Sick Leave Ordinance
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Ordinance Paid Sick Leave (12/31/2023)
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Accrual Per 12-month Period
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One hour for every 40 hours worked
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One hour for every 35 hours worked
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Eligibility
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Employees must work at least 80 hours for an employer within a 120-day period
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Not applicable
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Use of Leave
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180 calendar days after employee’s date of hire
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30 calendar days after employee’s date of hire
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Minimum Increment
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Not to exceed one hour
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Not to exceed 2 hours
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Carryover
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Up to 20 hours may be carried over between 12-month periods.
For FMLA purposes, up to 40 hours may be carried over between 12-month periods.
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80 hours
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Employer Responsibilities - Posting, Notice, Paystub & Recordkeeping
- Posting: Employers must post a notice advising employees of their rights under the Ordinance in a conspicuous place at each worksite in Chicago. If a significant portion of an employer’s workforce population cannot read or understand English, the employer must contact the Chicago Department of Business Affairs and Consumer Protection (Department) to request a notice in an appropriate language. Employers that do not maintain a business facility in the city of Chicago are exempt from this posting requirement.
- Notice & Paystub Reporting: Employers must provide a notice advising employees of their rights under the Ordinance with an employee’s first paycheck and annually in July. This notice will be issued by the Department. Additionally, employers are required to provide employees’ leave uses, balances, and accrual rates under the Ordinance each pay period, either on employees’ paychecks or within an online employee attendance system.
- Recordkeeping: Employers are required to maintain Ordinance-related records documenting hours worked, pay rate, Ordinance leave accrued and taken, and remaining leave balance for each covered employee for a period of five years or for the duration of a claim, action, or investigation, whichever is longer.
Existing Paid Leave Policies
Employers with existing paid leave policies providing leave time in an amount that meets or exceeds the Ordinance requirements (for both paid sick leave and paid leave for any reason) are not required to provide any additional paid leave time to their employees.
Enforcement
The Department is responsible for the administration and enforcement of the Ordinance. Employers in violation of the Ordinance will be subject to fines between $1,000 and $3,000 for each separate offense. Employers in violation of the notice or posting requirements outlined above will be subject to fines of $500 for the first violation and $1,000 for each subsequent violation.
Employees are provided with a private cause of action in civil court under the Ordinance and may recover damages equal to three times the full amount of any leave denied or lost by reason of employer violation, interest at the prevailing rate, as well as reasonable attorney’s fees.
The private cause of action for paid sick leave violations is available on December 31, 2023, while the private cause of action for paid leave for any reason violations will be available to employees on January 1, 2025.
Next Steps for Employers
The Ordinance arrives just as Illinois employers are preparing to comply with the new Illinois paid leave for any reason law, which goes into effect on January 1, 2024.
Prior to the Ordinance’s effective date of December 31, 2023,[1] employers with Chicago employees are advised to confer with their labor and employment counsel regarding the following items:
- Determining how this Chicago Ordinance interacts with the upcoming Illinois paid leave requirement, as well as the current Cook County Earned Sick Leave Ordinance;
- Addressing any applicable compliance gaps; and
- Updating existing paid leave policies and employee handbooks, as well as payroll/attendance systems, to comply with the Ordinance’s requirements.
Risk Strategies is closely following this new Chicago paid leave development and will provide updates when available. Contact us directly with any questions at benefits@risk-strategies.com.
[1] The Ordinance goes into effect for Chicago public school employees on July 1, 2024.
