The City of Chicago passed a new ordinance requiring paid leave for its residents. The Chicago Paid Leave and Paid Sick and Safe Leave Ordinance, which is effective December 31, 2023, requires Chicago employers to grant its employees who reside within the city 40 hours of paid leave and 40 hours of paid sick leave per a 12-month period. For every 35 hours worked the employee will accrue at least one hour of paid leave and one hour of paid sick leave. The ordinance applies to every employee who in any two-week period performs at least two hours of work while physically present within the geographic boundaries of the city and any employer who gainfully employs at least one employee.

An employee is allowed to use paid leave for any purpose but the ordinance lists specific circumstances where an employee is allowed to use paid sick leave. An employee is allowed to use paid sick leave for the following: (a) personal health treatment; (b) to care for a sick or injured family member or to care for a family member who is subject to the Illinois Domestic Violence Act; (c) if the employer is closed due to a public health emergency; (d) if the employee needs to care for a family member whose school or place of care is closed due to a public health emergency; and (e) if the employee is obeying a public order to stay at home due to a public health emergency.

The ordinance allows employers to request reasonable notice of the employee’s intention to take leave. An employer can require seven days’ notice for leave that is reasonably foreseeable and if an employee takes paid sick leave for more than three days the employer can require documentation, but not more than one piece of documentation per incident. An employer may not require any employee to provide documentation for paid leave. 

Employers are allowed to set leave policies with minimum increments in which employees can take leave. Employers can set a minimum increment for leave of four hours per day for paid leave and two hours per day for paid sick leave. 

Employers must allow paid leave and paid sick leave to accrue on January 1, 2024, or on the first day of employment. Employers must also allow for employees to carry over 16 hours of paid leave and 80 hours of paid sick leave. An employer is not required to pay an employee for any unused time that cannot be carried over; however if an employer interferes with the employee’s right to use the accrued time, the employer must increase the covered employee’s permissible carryover to include the denied time. Additionally, if an employer front loads an employee’s paid leave, the employer is not required to carry over unused paid leave time. Regardless of whether an employer front loads or uses the accrual method of paid sick leave, the employee is allowed to carry over up to 80 hours. 

Upon termination of employment (voluntary or involuntary) or an employee's relocation outside the City of Chicago, the employer may be required to pay the monetary equivalent of all unused accrued paid leave. The ordinance requires large employers (100 or more employees) to pay unused paid leave. Medium employers (51 to 100 employees) are required to pay up to 16 hours of unused time until January 1, 2025. Beginning January 1, 2025, medium employers are required to pay the monetary equivalent of all unused paid leave upon termination of employment. Small employers (50 or less employees) are not required to pay for unused paid leave. 

With the approaching deadline to implement these changes, it is important that employers contact an attorney to update their employee paid leave policies.