Chicago Paid Leave and Paid Sick and Safe Leave Ordinance – Things Employers Need to Know!

For purposes of Chicago’s Paid Leave and Paid Sick Leave Ordinance (the “Ordinance”), there are several critical definitions: 

“Covered Employee” is one who, in any two-week period, performs at least two hours of work for an Employer while physically present within the city's geographic boundaries. 

“Employer” encompasses a person or entity who gainfully employs at least one Covered Employee. 

“Small Employer” means an Employer with 50 or fewer Covered Employees. 

“Medium Employer” means an Employer with between 51 and 100 Covered Employees. 

General

Under the Ordinance, Covered Employees working for an Employer are entitled to Paid Leave and Paid Sick Leave, compensated at the same rate as their regular wages. The minimum hourly pay should not be less than the highest applicable wage among Federal, Illinois, or Chicago minimum wages. For employees that are not exempt from overtime requirements, Paid Leave and Paid Sick Leave are calculated based on the average wage divided by total hours worked in previous pay periods.

Employers must pay for Paid Leave and Paid Sick Leave by the next regular payday after the leave is taken. They are prohibited from interfering with, denying, or altering workdays or hours to avoid providing these benefits. Absence-control policies cannot use paid time off as a basis for disciplinary actions. Any Paid Sick Leave accrued before July 1, 2024, that does not meet new requirements must be transferred to comply with current rules. Employers cannot require employees to find replacement workers for Paid Sick Leave or Paid Leave.

Accepted Uses

Covered Employees can use Paid Leave for any purpose without needing to provide a reason or documentation. Paid Sick Leave can be used for personal illness, family member illness, domestic violence situations, public health emergencies, or compliance with quarantine or isolation orders. Employers can establish policies requiring up to seven days' notice and reasonable pre-approval, but must comply with rules set by the Office of Labor Standards. 

Accrual 

Employers can choose between accrual or frontloading methods for Paid Leave and Paid Sick Leave. If not frontloaded, paid and sick leave each accrue at one hour for every 35 hours worked. Employers may set an annual cap of 40 hours for both types of leave, but up to 80 hours of Paid Sick Leave and 16 hours of Paid Leave can carry over each year. Frontloaded leave does not need to carry over if the Employer opts for this method.

Termination

Upon termination, resignation, retirement, or any other separation, Employers must pay out unused accrued Paid Leave at the employee’s final pay rate, except for Small Employers who are not required to make this payout. Medium Employers must pay up to 16 hours of unused Paid Leave until June 30, 2025. From July 1, 2025, they must follow the same payout requirements as other Employers.

Notice

Employers must post a notice about Paid Leave and Paid Sick Leave rights in a visible location at each facility and provide written notice with the first paycheck and annually within 30 days of July 1. They must also inform employees of their accrued leave and accrual rates, using reasonable methods like online systems or reflecting leave time on paycheck stubs.

Violations

Violations of the Ordinance can result in fines ranging from $1,000 to $3,000 for each offense, with notice-related violations starting at $500. Employers are also liable for damages equivalent to three times the denied or lost leave amount, plus interest and reasonable attorney fees. Covered Employees can pursue legal action for violations, seeking damages, interest, and attorney fees. 

Records

Employers must retain records of employee leave and payment details for at least five years or the duration of any pending claims, whichever is longer. 

Contact Us!

Employers should be aware of and prepare for these changes that went into effect on July 1, 2024. Violations of these rules can create liability for an Employer, including the payment of fines, excess Paid Leave benefits, and civil action damages. This article is not all encompassing and if you have questions regarding the Ordinance, contact Lance Ziebell at 847-705-7555 or lziebell@lavellelaw.com to schedule a consultation.