Chicago’s New Paid Leave and Paid Sick Leave Ordinance effective July 1, 2024
Under the city’s new Paid Leave and Paid Sick and Safe Leave Ordinance, which applies to employers of all sizes, employees will be entitled to accrue two separate types of leave: Paid Leave (PL) that can be used for any reason and Paid Sick and Safe Leave (PSSL) that can be used for the reasons allowed by Chicago’s previous paid sick leave law. Below are some highlights.
Accrual
Both types of leave begin to accrue on July 1, 2024 (or upon hire, if after that) at a rate of one hour for every 35 hours worked in Chicago. An employee who works 35 hours will have earned one hour of PL and one hour of PSSL. Employers can cap annual accrual at 40 hours for each type of leave.
Carryover
Employees can carry over up to 16 hours of PL from one benefit year to the next unless their employer frontloads PL, in which case no PL needs to carry over. Employees can carry over up to 80 hours of PSSL from one benefit year to the next, regardless of whether the employer frontloads.
Use
Employers can’t cap use of either type of leave (except up to the amount that an employee has accrued). Employers can deny PL requests if the denial is based on a rationale covered by their written policy—they must also provide employees with a written explanation for the denial. Employers can impose a 30-day waiting period on use of PSSL and a 90-day waiting period on use of PL from the time an employee begins to accrue.
Payout at Termination
Employers don’t have to pay out any unused PSSL but may need to pay out accrued but unused PL at termination, according to the following rules:
- Employers with 1–50 employees are exempt from PL payout
- Employers with 51–100 employees must pay out up to 16 hours of PL through June 30, 2025, and all unused, accrued PL after that date
- Employers with 101 or more employees must pay out all unused, accrued PL
Notice to Employees
Employees need to be given a notice about PL and PSSL with their first applicable paycheck—in July 2024, or after hire, whichever comes first—and annually thereafter in July. The notice also needs to be posted in the workplace. The notice, made by the city, is available in six languages.
Employers also need to give employees written notification of their available PL and PSSL, and their accrual rate, each time they’re paid. Employers can meet this obligation in several ways, including by putting the information on a paystub or having it available online where employees can easily access it.
Documentation for Use of Leave
Employers can’t require any documentation for use of PL. Employers can require that employees provide certification of their need for PSSL if they’re gone for more than three consecutive scheduled workdays. Note that the FAQs are a bit misleading in saying that an employer can ask for a note “after” an employee uses three days in a row—that’s only true if the employee also uses PSSL for all or part of a fourth scheduled workday in a row.
The Chicago Department of Business Affairs and Consumer Protection (BACP) published the final rules interpreting the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance (the “Ordinance”) and an Overview of the new ordinance has also been released.
Action Items
- Update leave policies.
- Display required posters in the workplace once available.
- Update payroll processes.
- Train managers/supervisors and other appropriate personnel on leave requirements.
