Chicago Paid Leave Changes: Is Your Business Ready?

Last week, the City of Chicago passed the “Paid Leave and Paid Sick and Safe Leave Ordinance” (“Ordinance”).

Summarize it for me.  

The Ordinance requires employers, with employees working in the City of Chicago, to provide up to 40 hours of paid leave for any purpose AND 40 hours of paid sick leave per year.  That’s a total of up to 80 hours.

How long do I have to prepare?

This Ordinance goes into effect on January 1, 2024, which means business owners need to review and update their current policies to meet these new requirements. The Ordinance does provide an exemption for employers that have a policy currently granting paid leave that meets or exceeds the requirements of the new Ordinance.

Who is covered and how do I calculate the hours I need to provide?

  • “Covered Employer” is a person who “gainfully employs at least one Employee.”
  • “Covered Employees” is an Employee who “performs at least two hours of work while physically present in the City of Chicago” during any 2-week period.
  • Covered Employees accrue 1 hour of Paid Leave and 1 hour of Paid Sick Leave for every 35 hours worked, for a maximum of 40 hours of Paid Leave and 40 hours of Paid Sick Leave.
  • Covered Employees are permitted to carry over up to 16 hours of accrued but unused Paid Leave and up to 80 hours of accrued but unused Paid Sick Leave from one year to the next.
  • Paid Sick Leave may be used for those reasons specified in the Ordinance, including the illness or injury of the Covered Employee or a family member.
  • Paid Leave can be used by the Covered Employee for any reason, and the Covered Employer cannot require the Covered Employee to provide a reason for using Paid Leave. However, the Covered Employer can establish reasonable policies for the use of Paid Leave, such as reasonable notice requirements.

How is unused leave handled upon departure?

Except for Covered Employees of Small Employers (1-50 Covered Employees), Covered Employers are required to pay all accrued but unused Paid Leave upon the Covered Employee’s termination, resignation, retirement, or other separation of employment.

This payment is graduated for Medium Employers (51-100 Covered Employees) who are only required to pay up to a maximum of 16 hours of accrued and unused Paid Leave in year 2024, going to the maximum of all accrued but unused Paid Leave starting on January 1, 2025. No similar payout is required for accrued but unused Paid Sick Leave.

This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

C. Douglas Moran | Employment, Complex Commercial Litigation, Real Estate Litigation and Bankruptcy Litigation

Doug concentrates his practice in representing employers, corporations and banks in litigation, including complex litigation. Doug has represented employers, banks and companies ranging from single member LLCs and closely-held corporations up to Fortune 500 companies, contact Doug.