On December 13, 2023, the Chicago City Council voted to delay the paid leave changes in the new Chicago Paid Leave and Paid Sick and Safe Leave Ordinance (the “Ordinance”) from January 1, 2024 to July 1, 2024. The Ordinance, which was originally enacted only a month earlier on November 9, 2023, was slated to take effect on the eve of the effective date of the new statewide Illinois Paid Leave for All Workers Act. This delay is welcome news for employers that were racing to modify their paid time off programs for January 1 with only seven weeks between passage of the new Ordinance and the end of the year.  

The delay to July 1, 2024 impacts the following provisions of the Ordinance:

• Paid Sick Leave Accrual and Carryover: The new paid sick leave accrual rate of 1 hour for every 35 hours worked will take effect July 1, 2024; the current accrual rate of 1 hour for every 40 hours worked will remain in effect through June 30, 2024. Likewise, the changes to paid sick leave carryover provisions will now take effect July 1, 2024.
• Paid Leave Accrual: Paid leave accrual will now begin July 1, 2024, and not January 1, 2024, as originally contemplated.
• Collective Bargaining Agreements in Effect: The Ordinance does not affect the validity or change the terms of a sick leave or PTO policy in a valid collective bargaining agreement (CBA) in effect on July 1, 2024. Following that date, the requirements of the Ordinance may be waived in a bona fide CBA if the waiver is set forth explicitly in the agreement in clear and unambiguous terms.
• Medium Employer Partial Payout Extended: Under the new Ordinance, certain employers are required to pay the employee the monetary equivalent of all unused accrued paid leave upon an employee’s termination, resignation, retirement, other separation, or transfer outside of the geographic limits of the City, dependent on the employer’s number of covered employees. Medium employers (51-100 covered employees) would have been required to pay out up to 16 hours of paid leave on separation or transfer through December 31, 2024, and all unused paid leave upon separation or transfer on or after January 1, 2025. That date has been postponed by six months until July 1, 2025.

The December 13th amending ordinance also modified the Ordinance as follows:

• Definition of a Covered Employee: The amending ordinance defines a covered employee as an individual who works at least 80 hours for an employer within any 120-day period while physically present within the geographic boundaries of the City.
  
  • Previously, the threshold for coverage was performing at least two hours of work for an employer in any particular two-week period while physically present within the geographic boundaries of the City.
  • The amending ordinance also clarifies that once the 80-hour threshold is reached for coverage, the employee will remain a covered employee for the remainder of the time that the employee works for the employer.
• Written Policy in Primary Language: The amending ordinance requires employers to provide their written paid time off policy to each of their covered employees in the employee’s primary language.
• Recordkeeping for Non-Covered Employees: The amending ordinance requires that employers comply with the Ordinance’s recordkeeping requirements for employees whose regular work duties take place within the geographical boundaries of Chicago, even if those individuals do not meet the standard for a “covered employee” under the ordinance and consequently are not entitled to paid leave or paid sick leave.
• Prerequisites for Paid Leave Private Right of Action: The amendments require that an employee may only initiate a private civil action after both: (a) an alleged violation occurs; and (b) the payday for the next regular payroll period or 16 days after the alleged violation occurred passes, whichever is the shorter period. However, this prerequisite to filing a paid leave private civil action will sunset on July 1, 2026. The prerequisite does not apply to paid sick leave violations. 

Effective December 31, 2023, the amending ordinance also modified the general provisions of Chapter 6-100 of the Chicago Municipal Code as follows:

• Employers must provide their employment policies to their workers whose regular work duties take place within the geographical boundaries of Chicago. The employment policies must be provided in the primary language of each worker.
• Employers must provide workers with a 14-day notice of any changes to employment policies.

The City of Chicago Office of Labor Standards has published proposed rules on the new Ordinance, and is expected to continue issuing informal guidance over the coming months. Employers are encouraged to monitor the Office of Labor Standards website for ongoing updates.