New City of Chicago Paid Leave Law Goes into Effect July 1

Beginning July 1, 2024, the City of Chicago will begin implementing the changes to its new paid leave Ordinance (formerly, paid sick leave Ordinance) that will require that most private employers provide 10-days of paid leave (or a combination of paid sick and paid leave) to its Chicago employees. The new “Chicago Paid Leave and Paid Sick and Safe Leave” Ordinance, along with the related trailer legislation, passed City Council in November 2023—with a related trailer Ordinance passing in December of 2023.

The Chicagoland Chamber led a broad coalition of business group opposition to what is now considered one of the most expansive and complicated forms of mandated paid leave policies in the country. Although the Chamber ultimately had to oppose the final version of the legislation that passed the City Council, we helped secure numerous business-friendly concessions that will help make the implementation of this new law easier to comply with and protect against burdensome legal penalties.

As a general disclaimer, while we provide details and references to the new Paid Leave Ordinance, this overview is merely for educational and informational purposes and does not constitute legal advice. We strongly urge every employer to consult all relevant legal documents supplied by the City of Chicago, including the Ordinance language and associated Rules, and seek legal counsel, if necessary, to ensure proper compliance with the new law.

Overview

Below we highlight several significant provisions of the new paid leave Ordinance. For a detailed comparison to the recently enacted State of Illinois 5-day Paid Leave for All Workers Act, and Cook County’s 5-day Paid Leave Ordinance, you can refer to a table breaking down the main differences here. 

City Ordinance Summary (effective 7/1/24)

• Private employers that employ workers that work at least 80 hours for an Employer within any 120-day period in Chicago must begin complying with the new Paid Leave Ordinance. Limited exemptions apply to railroad workers, construction workers, and CBA workforces.
• Workers are entitled to at least 10 days of paid leave, or 5 days of paid sick leave (PSL) and 5 days of paid leave (PL).
• Any employer leave policy MUST allow for the following:
  • Leave to accrue 1 hour per 35 hours worked;
  • Utilization of unused and accrued PSL after 30 days and PL after 90 days of employment;
  • Use PSL in as little as 2-hour increments and 4-hour increments for PL;
  • For PSL, only require notice after 7-days or foreseeable leave or after three consecutive days of PSL; for PL, employer may establish a limited pre-approval policy on the notice/documentation of PL.
  • Allows up to 10 days of rollover of PSL, however, only 2 days of PL are required to be eligible to rollover if an employer does not front-load the PL—there is no rollover requirement for employers that front-load PL.
  • No payout is required for any mandated PSL; however, depending on the size of the employer, 0-7 days of paid leave will be required.
  • Fines for violations of the Ordinance will range from $1,000-$3,000, with lesser $500-$1,000 fines for not meeting notice and posting requirements.
  • Private right of actions, with limited cure and grace periods, may be commenced for violations of PL or PSL provisions.

City Final Rules Overview (Effective 7/1/24)

The Final Rules that BACP released earlier this year contain several additional provisions that attempt to add clarity to the Ordinance. The Chicagoland Chamber of Commerce submitted extensive comments to the BACP asking for more clarity, transparency, and, at times, fixes to vague provisions in the Ordinance (accessiblehere). While the Department accepted several of our recommended changes to the Draft Rules, the Final Rules did not address all the concerns we asked to be addressed.

Below is a list of major provisions in the Final Rules.

• Makes clear that employers that have existing policies need only demonstrate compliance with the following minimum standards: (i) accrual, (ii) carryover, and (ii) usage requirements. Employers with existing policies should review their policies to ensure that these minimum requirements are met.
• Made clarifications related to employee-required notices to employers taking PL or PSL.
• Adds language allowing for policies that offer 10-days of PL, instead of a 5-day PL and 5-PSL policy, to be in compliance.
• Adds provisions requiring complaints submitted to OLS state factually what the alleged violation is and includes the factual bases for the complaint.

Again, while the Chamber tried to make sure the Final Rules improved and clarified provisions for employers to more easily be able to comply with the new Ordinance, there may still be several vague or overly broad provisions that may impact businesses on a case-by-case basis.

City Resources

We encourage all employers to carefully review resources that the Department of Business Affairs and Consumer Protection (BACP) and the Office of Labor Standards (OLS) has provided. Below are a few helpful resources to consult as you and your company look to comply with the new Ordinance.

Ordinance Language: https://www.chicago.gov/content/dam/city/depts/bacp/OSL/O20230002980PTO11092023.pdf

Trailer Ordinance (which contains several corrections and improvements to the initial Ordinance): https://www.chicago.gov/content/dam/city/depts/bacp/OSL/O20230005883PTOAmendment12132023.pdf

FAQ Prepared by OLS: https://www.chicago.gov/content/dam/city/depts/bacp/OSL/FAQ%20Paid%20Leave%20and%20Paid%20Sick%20and%20Safe%20Leave_v2.pdf

BACP Final Rules: https://www.chicago.gov/content/dam/city/depts/bacp/OSL/bacpolspaidleaveandpaidsickleaverules07012024.pdf

Sample Informational Flyer: https://www.chicago.gov/content/dam/city/depts/bacp/OSL/PLPS%20One%20Pager.pdf