NOTE TO CHICAGO EMPLOYERS: New Chicago Paid-Leave Law Takes Effect 7.1.24


Chicago Paid Leave Ordinance

Employers physically located within the City of Chicago need to be ready as of July 1 to implement the new Chicago Paid Leave and Paid Sick and Safe Leave Ordinance, which stipulates that covered employees can earn up to 40 hours of paid sick leave and 40 hours of other paid leave usable for any reasons per 12-month accrual period.

Covered employees are those who work at least 80 hours within a 120 day period. Immigration status is irrelevant. The benefit year can be defined the same for all employees or entirely individually, and can be tied to the calendar year, fiscal year, tax year, contract year or anniversary date of employment.

Employees paid fully or partly on commission must be compensated at their base hourly rate, or whichever is higher out of the federal, Illinois or Chicago minimum wage. Those who receive gratuities must receive paid leave at the highest of the city, state or federal minimum wage.

Employers are allowed to require that employees give up to 7 days’ notice, using such methods as written or verbal notification to their immediate supervisor, calling a certain phone number to leave a message, sending an e-mail to a certain address, or submitting a request in the employer’s scheduling system. If paid sick leave continues for more than three consecutive workdays, an employer can ask for certification—but they cannot prevent the employee from using sick time, nor delay paying them, if such a certification is not produced.

Employers can deny leave requests if they can demonstrate that an employee’s leave would significantly impact business operations, if the employer’s service has critical impact on city residents’ health and safety, if they have treated employees of similar position the same way in making previous determinations, and if the employee has had a “reasonable ability” to use all of their accrued leave during the designated 12-month period. Such denials must be issued in writing and state a policy rationale.

Employers are allowed to immediately grant paid leave or paid sick leave (or both) frontloaded from the date of employment if they so choose. If they do not, they must allow employees to carry over up to 16 hours of accrued, unused paid leave into the next calendar year. Either way, employers must allow employees to carry over up to 80 hours of accrued, unused paid sick leave. And for either type of leave, employers must not ask to compensate the employee for unused leave time in exchange for waiving it.

If employers do not frontload paid leave, they must allow employees to use paid leave by the 90th day and paid sick leave by the 30th day; if an employer chooses to lump together paid leave and paid sick leave into one 80-hour allotment, this must be allowed by the 30th day. Either type of leave must be compensated by the next regular payroll period after the leave was used.

Employers are required to post a notice publicizing the ordinance’s final rules in usual channels such as breakrooms, lunchrooms, bulletin boards and internal channels of communication—unless the employer does not have a physical business location in the city, or is a household employing domestic workers, in which case that requirement is waived.

Employers must provide this notice in tandem with an employee’s first paycheck after July 1, either on the check stub, online, or via a handwritten record that notates available time. And they must keep records for covered employees for at least five years that contain hire date, date eligible to use leave, the number of hours accrued by or awarded to the employee, and the dates and number of hours each employee used either or both kinds of leave.

Employees who think their employer has violated any of these requirements must file a complaint with the Chicago Department of Business Affairs and Consumer Protection within three years of the alleged violation, unless there is evidence that the employer hid the violation or misled employee about their rights, in which case the three-year clock starts when this circumstance came to light.

The department can choose to use conference, voluntary mediation, conciliation or persuasion to resolve a complaint, considering factors such as whether the employer appears to have made good-faith efforts to address violations, and/or whether the complaint is more technical and would not have materially harmed the employee, in deciding whether and how much to fine the accused business.

To avoid that outcome, read the ordinance in full and perhaps consult with your business attorney.  We are also encouraging our clients to review their employee policy manuals.   If your business does not have a employee policy manual, you should serioiusly consider adopting one.