Quick Hits

• By delaying the effective date of the Chicago Paid Leave and Paid Sick Leave Ordinance, the Chicago City Council extended the existing Chicago Paid Leave and Paid Sick and Safe Leave Ordinance until July 1, 2024.
• Key amendments to the ordinance include a narrower definition for eligible employees, modified notice and recordkeeping requirements, and additional requirements for a private right of action until July 1, 2026.
• As the Chicago City Council continues to release additional guidance, employers have additional time to ensure their PTO policies are compliant.

Announced just over one month ago, the ordinance requires covered employers to provide covered employees the ability to earn forty hours of paid leave and forty hours of paid sick and safe leave within a twelve-month period. In addition to the delay, the amended ordinance also comes with some notable changes for employers to keep an eye on.

Impact of the Delay

The ordinance’s delay not only amended the effective date, but it also impacts the following:

• Paid leave and paid sick and safe leave provided under the ordinance will begin to accrue on July 1, 2024.
• Employers are not required to change the terms of bona fide collective bargaining agreements effective before July 1, 2024. Effective July 1, 2024, paid leave and paid sick and safe leave requirements under the ordinance may only be waived through “clear and unambiguous terms.”
• For medium employers, or employers with fifty-one to one hundred covered employees, the payout of unused paid leave upon termination, resignation, retirement, or other separation from employment is now limited to sixteen hours through June 2025. Effective July 1, 2025, medium employers will be required to payout all unused leave as required under the ordinance.

Additional Amendments

In addition to amending the ordinance’s effective date, the Chicago City Council voted to implement the following changes:

• The definition of covered employee now reflects the definition in the current ordinance, or an employee who works at least eighty hours for an employer within any 120-day period while physically present in the city. The amended ordinance notes that once this requirement is reached, the employee will remain a covered employee for the remainder of the employee’s employment.
• For covered employees to bring a private right of action for an employer’s violation of the paid leave requirements of the ordinance, the employee must wait until “(A) an alleged violation occurs; and (2) the payday for the next regular payroll period or 16 days after the alleged violation occurred passes, whichever is the shorter period.” These requirements are only effective until July 1, 2026.
• When complying with the ordinance’s notice requirements, employers are now required to provide written notices in the employee’s primary language.
• Employers are now required to comply with the record retention requirements of the ordinance for both covered and noncovered employees.

Key Takeaways

Employers with eligible employees may want to review their existing leave policies before July 1, 2024, to ensure employees are, at a minimum, accruing one hour of paid leave and paid sick leave every thirty-five hours worked and ensure their policies comply with the other requirements of the ordinance. In addition, employers can continue to monitor further developments in this area as the Chicago City Council continues to release additional guidance, such as the proposed rules and regulations.