CATA News

The Chicago City Council has passed the new Chicago Paid Leave and Paid Sick and Safe Leave Ordinance (the “Ordinance”).

Covered Employers and Employees

The Ordinance applies to all employers with employees in Illinois. The Ordinance covers employees who, in any two-week period, perform at least two hours of work while physically present within the geographic boundaries of Chicago.

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 January 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. Employees working in the construction industry who are covered by a bona fide CBA are exempt from the Ordinance.

Accrual, Carryover, and Frontloading

On January 1, 2024, or when employment begins – whichever is later – covered employees will accrue one hour of Paid Sick Leave and one hour of Paid Leave for every 35 hours worked. Time will be accrued in whole-hour increments and not in fractions of an hour. However, employers with more generous policies can maintain a monthly accrual. Exempt employees are presumed to work 40 hours per workweek for the purposes of accrual unless their regular workweek is less than 40 hours, in which case paid leave accrues based on that regular workweek.

Employees are entitled to accrue up to 40 hours of Paid Sick Leave and 40 hours of Paid Leave in a 12-month accrual period. Employees may carry over up to 80 hours of Paid Sick Leave and up to 16 hours of Paid Leave from one 12-month accrual period to the next.

In lieu of accruing time, employers may frontload 40 hours of Paid Sick Leave and 40 hours of Paid Leave on the first day of the 12-month accrual period. If the full 40 hours of Paid Leave are frontloaded at the beginning of the 12-month accrual period, unused time does not carry over from one 12-month period to the next. The unused time can be forfeited unless the employer denies access to the time in a manner that prevents the employee from having meaningful access to their paid time off, in which case the employee must be permitted to carry over the denied hours. Importantly, frontloading 40 hours of Paid Sick Leave does not eliminate an employer’s obligation to carry over up to 80 hours of unused Paid Sick Leave from one 12-month accrual period to the next.

To summarize, because the Ordinance does not impose usage caps, if an employer selects an accrual method, an employee could be entitled to use up to 56 hours of Paid Leave and 120 hours of Paid Sick Leave by the employee’s third 12-month accrual period. If an employer instead selects the frontload method, an employee would still be entitled to use up to 120 hours of Paid Sick Leave by the employee’s third 12-month accrual period, but they would not have more than 40 hours of Paid Leave to use in a single 12-month accrual period.

Using Leave

Employees may not use their Paid Sick Leave until they have completed 30 days of employment, and they may not use their Paid Leave until they have completed 90 days of employment.

Employers may set a reasonable minimum increment of use for Paid Sick Leave and Paid Leave. The minimum increment for Paid Sick Leave may not exceed two hours and the minimum increment for Paid Leave may not exceed four hours. If an employee’s shift length is less than the minimum increment of use, the minimum increment of use will be the length of the employee’s scheduled shift.

Employees may choose to use Paid Sick Leave or Paid Leave prior to using any other leave provided by the employer or by the city, state, or federal law.

Reasons for Use

Paid Leave may be used for any reason. Paid Sick Leave may continue to be used for the same reasons employees can take leave under the current Chicago Paid Sick Leave Ordinance, namely:

Requesting and Documenting Leave

Employers may require up to seven days’ advance notice of a foreseeable need for Paid Leave or Paid Sick Leave. If the need for Paid Sick Leave is unforeseeable, employers may require notice as soon as practicable on the day the employee intends to use the Paid Sick Leave. The Paid Sick Leave notice requirement will be waived in the event the employee is unable to give notice because the employee is unconscious or otherwise medically incapacitated.

Employers may not require documentation for the use of Paid Leave. However, as with the current Chicago Paid Sick Leave Ordinance, an employer may require certification that Paid Sick Leave was used for a permissible reason for absences of more than three consecutive workdays. Reasonable documentation may include the following:

The employee may choose which document to submit and may not be required to provide more than one document per incident of violence or perpetrator of violence. The employer may not delay commencement of Paid Sick Leave or delay wages because the employer has not received certification.

Using Existing Leave Policies

Employers may use their existing paid leave policies for compliance. If an employer has a policy that grants Paid Leave or Paid Sick Leave in an amount and manner that meets or exceeds the requirements of the Ordinance, the employer is not required to provide additional Paid Leave or Paid Sick Leave. However, the existing policy will need to be modified to comply with all other aspects of the Ordinance. If an employer’s current Chicago paid sick leave policy does not comply with the requirements of the new Ordinance, any Paid Sick Leave the employee is entitled to roll over from one 12-month accrual period to the next must be transferred to Paid Sick Leave under the new Ordinance.

Unlimited PTO Policies

The Ordinance explicitly addresses the intersection with so-called “unlimited paid time off” policies. If employers immediately provide unlimited paid time off on the employee’s first date of employment and the beginning of each subsequent 12-month accrual period, the employer need not track any carryover of unused time. Employers may not require preapproval for paid time off offered under an unlimited policy.

Even though accruals are untracked under an unlimited paid time off policy, employers must pay employees the monetary equivalent of 40 hours of paid time off minus the hours of paid time off used in the 12-month accrual period upon an employee’s termination, resignation, retirement, separation, or transfer outside of the geographic limits of the City, unless otherwise provided in a CBA. If the employee used more than 40 hours of paid time off in the 12-month accrual period prior to separation or transfer, the employee would not owe the employer compensation.

Rate of Pay

Employees must receive their regular rate of pay when using Paid Sick Leave and Paid Leave, which includes continuing health care benefits if the employee receives health care benefits from their employer. The regular rate of pay for nonexempt employees will be calculated by dividing the employee’s total wages by total hours worked in full pay periods of the prior 90 days of employment. Wages do not include overtime pay, premium pay, tips or gratuities, or commissions. However, an employee’s hourly rate of pay for leave under the Ordinance cannot drop below the employee’s base hourly wage or the applicable minimum wage.

End of Employment, Rehire, and Transfer

If an employee is transferred to a separate division, entity, or location but remains employed by the same employer, the employee is entitled to all Paid Sick Leave and Paid Leave accrued at the prior division, entity, or location and is entitled to use the accrued leave at the new division, entity, or location.

Upon an employee’s termination, resignation, retirement, other separation, or transfer outside of the geographic limits of the City, certain employers are required to pay the employee the monetary equivalent of all unused accrued Paid Leave, dependent on the number of covered employees. Employees working outside Chicago or in other states are not counted toward these thresholds. Small employers (1-50 covered employees) are not required to pay out unused Paid Leave upon separation or transfer. Medium employers (51-100 covered employees) are required to pay out up to 16 hours of Paid Leave on separation or transfer through December 31, 2024. On or after January 1, 2025, medium employers will be required to pay out all unused Paid Leave on separation or transfer. Large employers (>100 covered employees) must pay out all unused Paid Leave upon separation or transfer effective January 1, 2024.

If an employee has not been offered a work assignment for at least 60 days, the employer must notify the employee in writing that the employee may request a payout of their accrued Paid Leave.

Employers are not required to pay out Paid Sick Leave upon termination, resignation, retirement, separation, or transfer outside of the geographic limits of the City.

Overlap with State Law

Chicago employees will be covered by the Ordinance only, not the Illinois Paid Leave for All Workers Act.

Contact your HR and employment law partner and have your handbook reviewed and updated by our consulting and legal team. For assistance, contact us at 423-764-4127 or by email at sesco@sescomgt.com.

Sellers of clean vehicles should register their dealerships immediately on the Energy Credits Online tool, if they want to be in a position to receive advance payments starting Jan. 1, 2024.

Energy Credits Online or IRS ECO, is a free electronic service that is secure, accurate and requires no special software. Clean vehicle sellers should begin the online enrollment process immediately. The IRS encourages any dealer or seller to register using Energy Credits Online by Dec. 1, 2023, to share in its benefits and ensure that by Jan. 1, 2024, dealers and sellers are ready to submit time-of-sale reports and receive advance payments. The tool will generate a time-of-sale report the taxpayer will use when filing their federal tax return to claim or report the credit.

Beginning in 2024, clean vehicle sellers and licensed dealers must use the tool for their customers to successfully claim or transfer the new or previously owned clean vehicle credit for vehicles placed in service Jan.1, 2024, or later.

To participate and take advantage of the new and used clean vehicle credits available to taxpayers, a dealer must register through the IRS Energy Credits Online tool.  

Initially, only one individual representative of the dealer or seller can complete the registration through IRS Energy Credits Online: That representative must be currently authorized to legally bind the dealer or seller. Future enhancements of the tool will allow dealers and sellers to authorize more than one employee to submit time-of-sale reports and advance payment requests. Authorizing additional employees is an easy update for registered dealers.

More information about clean vehicle credits and tax benefits from the Inflation Reduction Act is available on IRS.gov.

Seeing no action in the Veto Session that ended yesterday, the warranty reimbursement provisions of the Motor Vehicle Franchise Act remain in place. These provisions ensure that both dealers and their technicians are fairly compensated for repairing vehicles covered under manufacturer warranty.

Thank you for your support in contacting local and state legislators to help head off any potential legislative action. The CATA will continue to monitor the situation in an effort to ensure that this legislation is not altered.

A decision has now been reached by the hearing officer in the Illinois protest of Ford’s Model e program. The protesting dealers prevailed on every count and the hearing officer suggested the Illinois Motor Vehicle Review Board (MVRB) award attorneys’ fees and costs to the dealers. Additionally, the hearing officer determined that the Model e program constituted a modification of the franchise agreement, as defined by Illinois law. The hearing officer further found that the dealers' participation in the Model e program was not voluntary but rather coercive, with Ford implicated for acting in bad faith. Furthermore, the hearing officer made a clear distinction between this proposed decision and the prior adverse ruling in South Dakota.

The proposed decision now goes to the MVRB for review in mid-November.

Raymond Chevrolet in Antioch was featured on the National Automobile Dealers Association's (NADA) website, after winning a nationwide photo contest. The winning image, showcasing the dealership's staff dressed in pink in honor of Breast Cancer Awareness Month, will grace NADA's homepage for two weeks.

The photo contest, organized monthly by NADA, invites dealerships across the United States to submit images of their team at their dealership. The goal is to showcase a dealership's unique personality and culture. Raymond Chevrolet's entry not only reflected their dedication to giving back but also celebrated Breast Cancer Awareness Month in a uniquely heartwarming way.

And the significance of the winning photo goes beyond recognition; it also represents Raymond Chevrolet's continued commitment to supporting vital causes. In alignment with their commitment to Breast Cancer Awareness Month, the dealership pledged to donate a portion of their proceeds for every test drive taken in October to the Susan G. Komen Foundation, a leading nonprofit organization dedicated to fighting breast cancer.

Through its Driving a Cleaner Illinois program, the Illinois EPA announced the Driving a Cleaner Illinois – Climate and Equitable Jobs Act (CEJA) EV Charging Notice of Funding Opportunity (NOFO) for the purchase and installation of new Direct Current Fast Charging (DCFC) light-duty electric vehicle charging stations at publicly accessible locations. This $27 million opportunity is being made available through Governor Pritzker’s bipartisan Rebuild Illinois capital plan for electric vehicle projects authorized under CEJA. The NOFO and related documents have been posted to the Illinois EPA website. Applications must be submitted to EPA.EVCharging@Illinois.gov by 5:00 pm CT on December 22, 2023.

Forecast summary: pent-up demand will provide momentum for the new vehicle market over the next 15 months, while the negative factors will place a ceiling on how high sales can go.

Read all about it and much, much more in the CATA's 2023 Q3 Auto Outlook.

Former CATA Chairman Michael Ettleson has been nominated for 2024 TIME Dealer of the Year award. Ettleson is one of a select group of 49 dealer nominees from across the country who will be honored at the 107th annual National Automobile Dealers Association (NADA) Show in Las Vegas, Nevada, on February 3, 2024.

The TIME Dealer of the Year award is one of the automobile industry’s most prestigious and highly coveted honors. The award recognizes the nation’s most successful auto dealers who also demonstrate a long-standing commitment to community service. Ettleson was chosen to represent the Illinois Automobile Dealers Association in the national competition – one of only 49 auto dealers nominated for the 55th annual award from more than 16,000 nationwide.

“I have been fortunate to have good people support me in business, a loving wife of 42 years, and a wonderful family,” nominee Ettleson said. “An Ettleson dealership has been in the Chicago area since 1968, and I am proud to continue our family’s legacy of employee longevity, honesty in pricing, and outstanding service to our customers.”

An active member in his state and local dealer associations, Ettleson has served on the board of the Illinois Automobile Dealers Association since 2015 and was chair of the group in 2020. He has also provided his leadership to the Chicago Automobile Trade Association (CATA) as a member of the board, chair of the board, and chair of the Chicago Auto Show.

In 2023, he partnered with the CATA to raise money for local service people and their families through the Chicago Automobile Trade Association’s USO BBQ for the Troops. The dealership joined more than 80 Chicago stores to offer hot dogs and burgers to visitors and raise funds for the USO Illinois.

Of all Ettleson’s good works, he is most proud of his time working with Helping Hand, where he served on the board of directors from 1995 to 2010 and policy board from 2010 to 2018. The organization provides services to children and adults with developmental disabilities and offers employment opportunities, community living options, and day programs.

Dealers are nominated by the executives of state and metro dealer associations around the country. A panel of faculty members from the Tauber Institute for Global Operations at the University of Michigan will select one finalist from each of the four NADA regions and one national Dealer of the Year. Three finalists will receive $5,000 for their favorite charities and the winner will receive $10,000 to give to charity, donated by Ally.

Ettleson was jointly nominated for the TIME Dealer of the Year award by the Chicago Automobile Trade Association and the Illinois Automobile Dealers Association. He and his wife, Jeri, have four children.

The Federal Trade Commission (FTC) has announced a final rule amending the FTC Safeguards Rule that will require non-banking institutions, such as dealers, to report certain data breaches and other security events to the FTC.

The final rule requires financial institutions (including dealers) to report “notification events,” defined as the unauthorized acquisition of unencrypted customer information involving at least 500 customers, to the FTC. The FTC has stated that the rule and its notice requirement are specifically intended to facilitate enforcement of the FTC’s Safeguards Rule against entities that file reports.

The notice to the commission must be provided electronically through a form located on the FTC’s website and must include:

• The name and contact information of the reporting financial institution
• A description of the types of information that were involved in the notification event
• The date or date range of the notification event (if possible to determine)
• The number of consumers affected
• A general description of the notification event

Notices will be available in a public database. The final rule does not impose a consumer notice requirement.

This rule will become effective 180 days after it is published in the federal register, which is expected shortly. Dealers and their qualified individuals should review the final rule to understand its requirements and scope and should consult with their technology providers and counsel regarding the implications of the new rule.

Appraisals are one of the most important areas in the dealership and are now more complex than ever before. Dealers appraise trades at the dealership, online, at homes and offices, out of state and in the service center. These intricacies, along with volatile vehicle prices, have made appraisals more difficult. Missing damage or flaws can massively affect the cost to market and ruin opportunity for profit.

Click image to watch the webinar.