December 7, 2023
Changes to Chicago’s Paid Leave Ordinance
In November 2023, the City of Chicago expanded employer requirements to provide paid leave to employees. Beginning January 1, 2024, employees working in the geographic boundaries of the city will be entitled to additional time off from their employers.
The City’s new paid leave ordinance requires all Chicago employers to provide employees working in the city with 10 paid leave days. The new ordinance alters the existing sick leave requirement by creating two separate categories of mandated paid time away from work—paid leave days and paid sick days. Beginning January 1, employers will be required to offer employees 5 days of paid leave in addition to 5 days of paid sick days. Initial eligibility, minimum usage, rollover, and payout requirements are different for each type of leave.
Under the new ordinance both leave types will accrue at the rate of 1 hour for every 35 hours worked. Employees are capped to accruing 40 hours of both paid leave and paid sick time during a 12-month beginning from the start of accrual. At the end of the 12-month period, an employee is allowed to carry over into the following year a maximum of 16 hours of paid leave and 80 hours of paid sick leave. Rather than follow the accrual method, an employer may choose to grant an employee 40 hours of paid leave and 40 hours of paid sick time at the beginning of employment or the beginning of the 12-month accrual period. Under a front-loading method, an employer is not required to carryover an employee’s unused time into the subsequent 12-month period.
Employers may set minimum use requirements not to exceed 4 hours of paid leave per day and 2 hours of paid sick leave per day. Employees must be able to use paid sick leave no later than the 30th day following the commencement of the employment. Employees must be able to use paid leave no later than the 90th day following the commencement of employment. If an employee uses sick time and it is foreseeable, employees may be required to provide up to 7 days’ notice or as soon as the employee becomes aware of the need for leave. If an employee uses three consecutive days of sick leave, an employer may require documentation from a doctor. Sick leave may be taken for any number of reasons under the ordinance including to recover from illness, care for a family member, address domestic violence, and in response to public health emergencies. An employee can use paid leave for any reason and may be required to give reasonable notice not to exceed 7 days. Employers are permitted to require employees receive reasonable pre-approval prior to using paid leave.
It is noteworthy that instead of the accrual method, the new ordinance provides that employers can choose to immediately grant employees, on the first day of employment or the beginning of the 12-month accrual period, unlimited paid time off that can be used for any reason. If an employer chooses to provide unlimited paid time off, the employer is not required to carry over unused paid time off to the subsequent 12-month period.
Like many similar ordinances, there are exemptions from the requirement of both types of leave for employers covered by existing collective bargaining agreements, but those employers will need to obtain clear and unambiguous waiver of rights under this ordinance in future CBA’s to avoid being subject to the law. The law includes other exclusions to certain requirements if also set forth in a CBA, such as forfeiture of time at the end of employment. Not surprisingly, the new law has notice and posting requirements. The ordinance also sets forth payout required for unused paid leave based on business size. Unused paid sick leave does not need to be paid out, regardless of business size. The ordinance also requires payout when an employee no longer qualifies as a covered employee under the law.
In sum, for employers with Chicago based employees, a review of current paid sick leave and paid time off leave is imperative to ensure compliance with the new Chicago ordinance and all of the nuisances it contains. Employers should also be mindful and prepared for the Illinois Paid Leave for all Workers Act that also takes effect in January 2024 for those workers that are not Chicago based.
