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Chicago Passes a New Paid Leave Ordinance 

On November 9, 2023, the Chicago City Council passed the new Chicago Paid Leave and Paid Sick and Safe Leave Ordinance (the “Ordinance”). The amendments take effect on December 31, 2023. While the city already had a paid sick leave law, the new ordinance now guarantees two banks of leave, one for paid sick leave, and one for paid leave that may be used for any reason of the employee’s choosing. This means that covered Chicago employees are entitled to take up to 40 hours of paid sick leave per year and another 40 hours of paid leave to use for any reason. 

Key provisions of the Ordinance include: 

  • Eligible Employees: All employees who work at least two hours per week in Chicago (regardless of where the employer is located) will be eligible for paid sick leave and paid leave. For accrued paid sick leave, employees are eligible to use paid leave 30 days after their hire date, and for the use of accrued paid leave for any reason, employees are eligible to use leave after 90 days of employment. 
  • Leave Accrual: Both paid sick leave and paid leave for any reason will accrue at a rate of one hour for every 35 hours worked, up to a maximum of 40 hours each year.  
  • Reasons for Paid Sick Leave: Paid sick leave can be used for the following reasons: 
    • Illness or injury of the employee or their family member (which includes a child, legal guardian or ward, spouse, domestic partner, parent, spouse or domestic partner’s parent, sibling, grandparent, grandchild, or any other individual related by blood or whose close association with the covered employee is the equivalent of a family relationship); 
    • Medical appointments for the employee or their family member; 
    • Domestic violence, sexual assault, or stalking; 
    • Care for a new child; 
    • Bereavement leave; and 
    • Due to a public health emergency. 
  • Reason for Paid Leave: Paid leave can be used for any reason, such as illness, family care, vacation, or personal days.
  • Carryover of Leave: 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. 
  • Notice requirements: Employers must post a notice of employees’ paid leave and paid sick leave rights in a conspicuous place at each facility within the city limits where a covered employee works. Employers must also: 
    • Notify employees of their rights with their first paycheck and annually; 
    • Provide written notice of an employee’s amount of available paid leave and paid sick leave each time wages are paid; and 
    • Provide employees with written notice of the employer’s paid time off policy at the start of employment and within five calendar days of making any changes to the policy. 
  • Payout: Employers are required to pay for unused paid leave and paid sick and safe leave upon termination of employment based upon employer size. 
  • Interaction With Existing Policies, Agreements, and Collective Bargaining Agreements (CBAs): If an employee accrued paid sick leave before the effective date, under an existing policy that does not meet the ordinance’s requirements, the employee is entitled to roll this sick time over to paid sick leave that complies with the new ordinance. 

Employers who immediately provide unlimited paid time off (PTO) on the employee’s date of hire and at the beginning of each subsequent 12-month accrual period, need not track any carryover of unused time. However, employers may not require preapproval for paid time off offered under an unlimited policy. Additionally, employers who provide unlimited PTO must pay employees the monetary equivalent of 40 hours of PTO 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. 

Employers who are covered by existing CBAs are exempt from the ordinance’s requirements so long as there is an explicit waiver of rights included in the CBA. All other agreements may not waive the ordinance’s requirements. 

As we previously reported, in early 2023, the State of Illinois also passed the Paid Leave for All Workers Act, which takes effect on January 1, 2024. However, that law exempts employees covered by a municipal paid leave ordinance in effect before the state law. Because the Chicago ordinance takes effect on December 31, 2023, Chicago employees will be covered exclusively by the city Ordinance and not by state law. 

Next Steps 

Employers should begin preparing for the Ordinance by updating their policies and procedures to comply with the new law, including providing the applicable notice, adjusting their payroll systems, and updating their employee handbooks. At the time of this post, the model notice had not yet been made available; however, it is expected that it will be located here

HR Works, headquartered in Upstate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States for over thirty years. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.