New Chicago Ordinance Expands Paid Time Off for All Workers | Saul Ewing LLP

What is the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance?

On November 9, 2023, the Chicago City Council passed the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance (the “Ordinance”), which goes into effect on December 31, 2023, and increases the required amount of paid time off for Chicago workers from five to ten days per year. The current City of Chicago Paid Sick Leave Ordinance (the “PSLO”) only guarantees five days of Paid Sick Leave, but under the new Ordinance, employers must provide five additional days of general Paid Leave.

Who Does the New Ordinance Affect?

The Ordinance applies to all employers, regardless of size, in Chicago. Likewise, it covers all employees who, in any two-week period, perform at least two hours of work while physically present within the City of Chicago.

In contrast, the current City of Chicago Paid Sick Leave Ordinance only applies to those employees who work at least 80 hours in Chicago within any 120-day period. Thus, the Ordinance greatly expands the existing coverage under the PSLO.

Accrual & Carryover of Paid Leave and Paid Sick Leave

Under the Ordinance, starting January 1, 2024, or on the first calendar day of employment, covered employees must accrue at least one hour of Paid Leave and one hour of Paid Sick Leave for every 35 hours worked. For every 12-month period, each covered employee’s Paid Leave and Paid Sick Leave are respectively capped at 40 hours, unless the employer sets a higher limit. This accrual scheme differs significantly from the PSLO, under which a Covered Employee accrues only one hour of Paid Sick Leave for every 40 hours worked.

In addition, under the Ordinance, covered employees are allowed to carryover up to 16 hours of Paid Leave and 80 hours of Paid Sick Leave from one 12-month accrual period to the next. The employer does not need to pay out unused time that does not qualify for carry over.

End-of-Year Payouts to Covered Employees

The Ordinance also requires employers to pay out any remaining Paid Leave time to a covered employee upon their separation (unless a collective bargaining agreement provides otherwise). However, employers with 50 or fewer employees are not subject to this requirement, and employers with 51-100 employees have until January 1, 2025 to comply with this payout provision.

Next Steps for Employers

Employers should be vigilant about reviewing the Ordinance requirements prior to December 31, 2023, because employers who violate its requirements will be subject to a fine between $500 and $3,000 for each offense. In addition, employees who are denied benefits under the Ordinance may recover damages in a civil action up to three times the amount of any leave denied or lost due to the employer’s violation, including interest, costs, and attorney’s fees.

Once the Ordinance goes into effect, employers with Chicago employees should take the following steps to ensure compliance:

  • Issue a written policy (or update their existing policy) providing for Paid Leave and Paid Sick Leave as required by the Ordinance and provide the policy to all new employees in Chicago at the commencement of employment;
  • Post in a conspicuous place, at each facility in Chicago, a notice advising employees of their right to paid time off under the Ordinance;
  • Provide a notice to each covered employee advising them of their right to paid time off under the Ordinance at the time of issuing the employee’s first paycheck, and annually thereafter within the month of July; and
  • Each time wages are paid, provide each covered employee with written notification stating an updated amount of Paid Leave and Paid Sick Leave available for their use and the accrual rates of each.

Please note that further negotiations are being conducted on the Ordinance, particularly in relation to employer penalties. Therefore, while employers should be on notice of the Ordinance requirements above and prepare accordingly, they should also keep in mind that the final Ordinance may differ come December 31, 2023. We will update this article if and when the Ordinance is updated and/or finalized.  

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