Chicago Enacts Sweeping New Paid Leave Ordinance

​On Nov. 9, Chicago passed an ordinance repealing its long-standing paid sick leave ordinance, replacing it with the new Chicago Paid Leave and Paid Sick and Safe Leave ordinance, effective Dec. 31. While the old ordinance allowed employees to accrue one hour of paid sick leave for every 40 hours worked, with a maximum of 40 hours earned per year, the new ordinance allows employees to accrue one hour of paid sick leave plus one hour of paid leave for every 35 hours worked, with a maximum of 40 hours of paid sick leave plus 40 hours of paid leave earned per year.

Additionally, employees can carry over 16 hours of accrued, unused paid leave and 80 hours of accrued, unused sick leave to the next benefit year. Alternatively, employers can front-load 40 hours of paid sick leave plus 40 hours of paid leave at the beginning of each benefit year, and the front-loading method relieves the employer of the requirement to allow paid leave hours (though seemingly not paid sick leave hours) to roll over to the next benefit year.

The ordinance specifies that an employer can satisfy the legal requirements by offering an unlimited paid-time-off policy, provided the policy meets certain other requirements under the ordinance.

Similar to the statewide Paid Leave for All Workers Act that will go into effect on Jan. 1, 2024, paid leave under the Chicago ordinance may used for any purpose, and an employer may not require employees to disclose the purpose for which they are using paid leave. Paid sick leave is only available for specified purposes, which are similar to those under the earlier paid sick leave ordinance.

Unlike the old ordinance, the new ordinance also requires that accrued, unused leave be paid to employees at the termination of employment or when the employees cease to be covered by the ordinance (e.g., if they transfer to a work location outside Chicago) – though this requirement is phased, depending on the employer's size. Accrued, unused leave that exceeds the annual carryover limitations is forfeited and does not need to be paid at the end of the benefit year.

New employees become eligible to start using paid sick leave on the 30th calendar day following commencement of their employment and paid leave on the 90th calendar day following commencement of their employment. Unless otherwise required by law, employees can choose whether to use the leave provided by this ordinance before using other leave provided by the employer.

Employers are required to comply with a variety of notice and posting requirements in relation to the new city ordinance, including giving employees written notice of the employer's paid-time-off policy at the commencement of employment and within five calendar days before any change to the paid-time-off policy. Employers must provide employees with a 14-day written notice of changes to the employer's paid-time-off policies that affect the employees' right to final compensation for such leave.

Information about leave accrual and usage must be provided to employees each time wages are paid. Employers must provide employees with written notice of their rights under the ordinance along with their first paycheck and annually with a paycheck issued in July.

The law provides for both private enforcement and enforcement by the Department of Business Affairs and Consumer Protection.

Employers that have employees who work in Chicago should review their current sick leave and paid leave policies carefully to assess whether they comply with the requirements of this new law. This is particularly important in light of the fact that the new Chicago ordinance has significant differences from both the earlier paid sick leave ordinance and the new statewide Paid Leave for All Workers Act that is set to go into effect on Jan. 1, 2024.

Bonnie Keane DelGobbo is an attorney with Baker & Hostetler in Chicago. © 2023 Baker Hostetler. All rights reserved. Reprinted with permission via Lexology.