By: Jerry Redmond, Esq., Associate General Counsel & Senior Consultant
Last November, Chicago expanded its existing Paid Sick and Safe Ordinance (the Ordinance) to require employers to provide Chicago employees with up to 40 hours of earned paid leave to be used for any reason, and 40 hours of earned paid sick leave every 12 months with an effective date of December 31, 2023.
In December, the city passed a Substitute Ordinance (S.O.) which delayed the effective date of the Ordinance to July 1, 2024. The S.O. also made several modifications and amendments including changes to the definition of “Eligible Employee,” changes to the accrual and carryover requirements, alterations to the payout timeline for medium sized employers, expansion of recordkeeping requirements, and the addition of a requirement for employers to distribute employee handbooks and policies to Chicago employees in an employee’s primary language.
Definition of “Eligible Employee”
The S.O. states that paid leave and paid sick leave requirements now apply to any employee that works at least 80 hours for an employer within any 120-day period, while physically present within the geographic boundaries of the city, consistent with the Ordinance. Once the 80-hour threshold is reached, an employee will remain an Eligible Employee for the remainder of the time that the employee works for the employer. The S.O. does not specify whether the ordinance continues to apply for employees that remain employed, but no longer work in the Chicago area.
Employees of employers with three (3) or fewer employees are not considered Eligible Employees after the July 1, 2024, effective date. However, prior to the deadline, employers must continue to comply with Chicago Paid Sick Leave Ordinance that took effect in 2020.
Accruals
The new paid sick leave accrual rate of one hour for every 35 hours worked will take effect July 1, 2024; while the current accrual rate of one hour for every 40 hours worked will remain in effect through June 30, 2024. Accruals for paid leave will now begin July 1, 2024, rather than January 1, 2024, as originally contemplated.
Unused Leave Payout Timeline Adjusted
Employers are not required to payout paid sick leave. However, the requirement to compensate employees for unused paid leave upon an employee’s discharge, resignation, retirement, other separation, or transfer outside of the geographic boundary depends on employer size. “Small employers” (employers with 50 or less Chicago employees) are not required to payout unused leave. Due to the delayed effective date, “Medium employers” (employers with 51-100 Chicago employees) are required to pay out up to 16 hours of unused paid leave for any reason until July 1, 2025, when they must begin paying out all unused paid leave (previously January 1, 2025). “Large employers” (employers with 101+ Chicago Employees) must pay out all unused paid leave beginning July 1, 2024 (previously January 1, 2024).
Policy Language Requirements Expanded
The S.O. amends the general provisions of Chicago’s Municipal Code, effective December 31, 2023, to require employers to provide their employment policies (including the leave policy, when developed) to employees in the primary language of each employee.
Recordkeeping Requirements Expanded
Under the prior ordinance, employers must retain records documenting hours worked, pay rate, paid leave accrued and taken, and remaining paid leave balances for each Eligible Employee for at least five (5) years (and for the duration of any pending claim). Employers must now collect and maintain these records for any employee that regularly works in the boundaries of Chicago for five (5) years, even if this employee would not be considered an Eligible Employee.
Prerequisites for Paid Leave Private Right of Action
The amendments require that an employee may only initiate a private civil action after both: (a) an alleged violation occurs; and (b) the payday for the next regular payroll period or 16 days after the alleged violation occurred passes, whichever is the shorter period. However, this prerequisite to filing a paid leave private civil action will sunset on July 1, 2026. The prerequisite does not apply to paid sick leave violations.
Cook County Paid Leave Ordinance
In addition to Chicago’s Paid Leave Ordnance, in December Cook County passed the Cook County Paid Leave Ordinance (the Ordinance), providing employees in Cook County with a minimum of 40 hours of paid leave to be used for any reason, effective January 1, 2024. The Ordinance largely mirrors the requirements of the Illinois Paid Leave for all Workers Act (the Act); however, employees that are covered under the Ordinance are not subject to the Act.
Specifically, effective January 1, 2024, all employees in Illinois except for those located in Cook County became subject to the Act. Cook County employees, including those in Chicago, are now covered by the Ordinance. On July 1, 2024, employees in Chicago will be subject to the Chicago Paid Leave Ordinance. Nothing exempts employees in Chicago from also being subject to the Ordinance, but the requirements of the Chicago Paid Leave Ordinance meet or exceed the requirements of the Ordinance, as discussed above.
Recommend Employer Action
Employers with Chicago employees should prepare to comply with the ordinance before the July 1, 2024, leave requirements effective date and the December 31, 2023, “primary language” policy requirement. Employers may want to do the following in preparation:
- Determine whether to provide leave entitlements on an accrual basis or by frontloading the requisite hours. If providing leave on an accrual basis, determine how to track accruals and how to provide employees with their accrual balances upon any request.
- Determine whether to require employees to provide reasonable notification of the need for leave, and if required, develop a policy for the notification process.
- Develop a plan to retain records that document hours worked, paid leave, and paid sick leave accrued and taken, and paid leave and paid sick leave balances for each employee that works within the geographic boundaries of Chicago for five (5) years or the duration of any pending claims.
- Plan to post the required notice at worksites and distribute it with employee paychecks upon hire and annually (after release of the notice).
- Develop a method to determine employee’s primary language and develop a method to provide employment policies to employees in that language.
- For more information, download FAQs provided by the Chicago Office of Labor Standards.
Employers with employees in Cook County may want to do the following in preparation:
- Determine whether to provide leave entitlements on an accrual basis or by frontloading the requisite hours. If providing leave on an accrual basis, determine how to track accruals and how to provide employees with their accrual balances upon any request.
- Determine whether to require employees to provide reasonable notification of the need for leave, and if required, develop a policy for the notification process.
- Develop a plan to retain records that document hours worked, paid leave accrued and taken, and paid leave balances for each employee.
- Plan to post the required notice at worksites and distribute the notice to employees upon hire. Posters are available from Cook County’s Commission on Human Rights in English, Spanish and Polish.
If you are an employer with additional questions on this topic or any other HR topics, we are here to assist you and your organization. Feel free to call our HR Helpline at 855-873-0374.
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