City of Chicago Amends and Delays Expansive Paid Leave Ordinance

On December 13, 2023, the City of Chicago City Council voted to delay the effective date of the Paid Leave and Paid Sick and Safe Leave Ordinance (the “Ordinance”) until July 1, 2024. As discussed in our prior post here, on November 9, 2023, the Chicago City Council passed the Ordinance, providing up to 10 days of paid leave for any reason (“PLAR”) and paid sick leave (“PSL”) to Chicago workers. The Ordinance was also amended to include other significant changes.

Starting on July 1, 2024, the amended ordinance allows employees to accrue one hour of PSL plus one hour of PLAR for every 35 hours worked, with a maximum of 40 hours of PSL plus a maximum of 40 hours of PLAR earned per year. The accrual rate of one hour for every 40 hours worked for PSL will continue through June 30, 2024. Any employee who works at least 80 hours within any 120-day period while being physically present in Chicago is covered by this ordinance, raising the threshold from the original version of the Ordinance.

Under the Ordinance, employees will be allowed to carry over up to 16 hours of accrued, unused PLAR and 80 hours of accrued, unused PSL to the following benefit year. Employers can elect to “front-load” 40 hours of PSL plus 40 hours of PLAR at the beginning of each benefit year, which relieves employers of any carry over obligations.

As discussed in our prior post here, PLAR may be used for any purpose, without any requirement that employees disclose the reason for which PLAR is being used, subject to reasonable notice and use policies.

Upon separation of employment or transfer, the amount of payout of PLAR depends on the size of the employer. Small employers, defined as those with 50 or fewer employees, will not be required to pay out unused PLAR. Medium-sized employers, defined as those with between 51 and 100 employees, will be required to pay out at least 16 hours of any unused PLAR at termination through June 30, 2025. Starting July 1, 2025, medium-sized employers must pay out all earned PLAR upon separation of employment or transfer. Employers with more than 100 employees will be required to pay out all unused PLAR upon termination of employment starting July 1, 2024.

The recent amendments also change the requirements for filing a lawsuit.  Notably, for PLAR violations, employees must wait until after the employer’s next regular payroll period or 16 days, whichever is shorter, before filing a private lawsuit. The amendments also requires written notification of the employer’s policy in the employees’ primary language and broad record keeping requirements.

Covered employers should prepare to update their leave policies to comply with the Ordinance and continue complying with paid sick leave obligations under the Ordinance.

Contact the authors of this blog or your relationship Member at Dykema with any questions.