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Chicago’s New Paid Leave and Paid Sick Leave Ordinance Delayed Six Months

Friday, December 22, 2023 9:00 AM | Anonymous member (Administrator)

Just over a month after passing the Chicago Paid Leave and Paid Sick Leave Ordinance (the Ordinance), which brought sweeping new paid leave and paid sick leave requirements to employers with Chicago employees, the city has amended the Ordinance to delay its effective date and limit the number of covered employees.

The delay to July 1, 2024, impacts the following provisions of the Ordinance:

  • Paid Sick Leave Accrual and Carryover: The new paid sick leave accrual rate of 1 hour for every 35 hours worked will take effect July 1, 2024; the current accrual rate of 1 hour for every 40 hours worked will remain in effect through June 30, 2024. Likewise, the changes to paid sick leave carryover provisions will now take effect July 1, 2024.
  • Paid Leave Accrual: Paid leave accrual will now begin July 1, 2024, and not January 1, 2024, as originally contemplated.
  • Collective Bargaining Agreements in Effect: The Ordinance does not affect the validity or change the terms of a sick leave or PTO policy in a valid collective bargaining agreement (CBA) in effect on July 1, 2024. Following that date, the requirements of the Ordinance may be waived in a bona fide CBA if the waiver is set forth explicitly in the agreement in clear and unambiguous terms.
  • Medium Employer Partial Payout Extended: Under the new Ordinance, certain employers are required to pay the employee the monetary equivalent of all unused accrued paid leave upon an employee’s termination, resignation, retirement, other separation, or transfer outside of the geographic limits of the City, dependent on the employer’s number of covered employees. Medium employers (51-100 covered employees) would have been required to pay out up to 16 hours of paid leave on separation or transfer through December 31, 2024, and all unused paid leave upon separation or transfer on or after January 1, 2025. That date has been postponed by six months until July 1, 2025.

The December 13th amending ordinance also modified the Ordinance as follows:

  • Definition of a Covered Employee: The amending ordinance defines a covered employee as an individual who works at least 80 hours for an employer within any 120-day period while physically present within the geographic boundaries of the City.
    • Previously, the threshold for coverage was performing at least two hours of work for an employer in any particular two-week period while physically present within the geographic boundaries of the City.
    • The amending ordinance also clarifies that once the 80-hour threshold is reached for coverage, the employee will remain a covered employee for the remainder of the time that the employee works for the employer.
  • Written Policy in Primary Language: The amending ordinance requires employers to provide their written paid time off policy to each of their covered employees in the employee’s primary language.
  • Recordkeeping for Non-Covered Employees: The amending ordinance requires that employers comply with the Ordinance’s recordkeeping requirements for employees whose regular work duties take place within the geographical boundaries of Chicago, even if those individuals do not meet the standard for a “covered employee” under the ordinance and consequently are not entitled to paid leave or paid sick leave.
  • Prerequisites for Paid Leave Private Right of Action: The amendments require that an employee may only initiate a private civil action after both: (a) an alleged violation occurs; and (b) the payday for the next regular payroll period or 16 days after the alleged violation occurred passes, whichever is the shorter period. However, this prerequisite to filing a paid leave private civil action will sunset on July 1, 2026. The prerequisite does not apply to paid sick leave violations.

Effective December 31, 2023, the amending ordinance also modified the general provisions of Chapter 6-100 of the Chicago Municipal Code as follows:

  • Employers must provide their employment policies to their workers whose regular work duties take place within the geographical boundaries of Chicago. The employment policies must be provided in the primary language of each worker.
  • Employers must provide workers with a 14-day notice of any changes to employment policies.

With the effective date of the Ordinance delayed until July 1, 2024, Chicago employers now have six more months to prepare for its new requirements. The City of Chicago Office of Labor Standards has published proposed rules on the new Ordinance and is expected to continue issuing informal guidance over the coming months.  In the meantime, the city’s current paid sick leave ordinance remains in effect, so for now that benefit is business as usual for Chicago employers.

Contact your HR and employment law partner if you have any questions. For assistance, contact us at 423-764-4127 or by email at sesco@sescomgt.com.

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