Chicago Passes New Paid Leave Ordinance
By Allison Sues, Senior Employment Law Counsel
Published November 14, 2023
The Chicago City Council approved a new Paid Leave Ordinance for all Chicago employers on November 9, 2023. Effective January 1, 2024, Chicago employees will now earn to up to ten days of paid leave each year.
Here are the key points that we currently know about this new development:
Q: Who is covered by the Ordinance?
The Ordinance provides paid leave to any employee who performs at least two hours of work within city limits in a two-week period, except for unionized employees who have paid leave provided for in their collective bargaining agreements.
Q: How much paid leave does the Ordinance require employers to provide?
The Ordinance requires that employers provide up to 10 days of paid leave each year. It also distinguishes between “Paid Sick Leave” and “Paid Leave,” the latter of which can be taken for any reason. The Ordinance requires that employers provide one hour of Paid Sick Leave and one hour of Paid Leave to be earned for every 35 hours worked, up to five days each of Paid Sick Leave and Paid Leave for each 12-month period.
Q: Can employers choose between providing the leave under an accrual or front-load method?
Yes, an employer may use either an accrual or frontload method. If you choose an accrual method, you must allow up to two days of unused Paid Leave and up to ten days of unused Paid Sick Leave to roll over to the next year. Employers who provide the paid leave to employees through the frontload method can provide the entirety of paid leave that an employee will earn throughout the year at the beginning of the year and avoid needing to allow any carryover of paid leave from year to year.
Q: Does the Ordinance require employers to pay out earned paid leave upon separation of employment?
Yes. The Ordinance provides the following schedule as to an employer’s obligation to pay out Paid Leave upon an employee’s separation of employment:
- Employers with more than 100 employees must pay out up to seven days of unused paid leave.
- Employers with between 50-100 employees must pay out up to two days of paid leave in 2024 and then begin paying out up to seven days of paid leave beginning in 2025.
- Employers with less than 50 employees do not need to pay out any unused paid leave.
Q: How does this Ordinance relate to Illinois’ Paid Leave for All Workers Act?
The Chicago Paid Leave Ordinance likely seeks to provide leave for any reason to Chicago employees who were exempt from Illinois’ Paid Leave for All Workers Act, also going into effect January 1, 2024. The Chicago Ordinance’s provisions on Paid Leave for any reason are very similar to the Illinois law. Both allow employees to take up to five days of leave for any reason without providing any explanation or documentation to their employer. Both also clarify that employers may require employees to use usual leave policies such as providing certain notice or receiving pre-approval when practicable.
Q: What are the penalties for non-compliance?
Employees will be entitled to penalties for non-compliance. The Ordinance includes a one-year grace period that delays when an employee may sue their employer for non-compliance under this law. In the new year, the Council will consider an amendment to the Ordinance to allow for a 30-day “cure period” whereby an employer may remedy a violation of the Ordinance prior to the employee being able to file a lawsuit.
HR Source will follow developments in this new law and provide additional guidance as it becomes available.