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The Chicago City Council has approved the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance which significantly expands paid leave requirements for Chicago employers. The new ordinance provides covered employees up to five annual days of paid leave that can be used for any purpose and five annual days of paid sick leave that can be used for specified purposes. A Covered Employee is someone who works at least 80 hours for an employer within any 120-day period while physically present within the geographic boundaries of Chicago. Once that threshold is met, the employee shall remain a Covered Employee for the remainder of the time that the employee works for the employer. There is no distinction between part-time, full-time, or seasonal employees. Hours worked outside Chicago do not count towards the accrual of Paid Leave or Paid Sick Leave.

Covered employees are entitled to accrue 1 hour of Paid Leave and 1 hour of Paid Sick Leave for every 35 hours worked, for a maximum total of 40 hours of both Paid Leave and Paid Sick Leave per 12-month period. Employees are allowed to carry over a maximum of 16 hours of Paid Leave and 80 hours of Paid Sick Leave. If the full 40 hours of Paid Leave are frontloaded, unused time does not carry over. Importantly, this does not apply to Paid Sick Leave. Employers are still obligated to carry over up to 80 hours of unused Paid Sick Leave regardless if the leave is accrued or frontloaded. Employees are entitled to begin using their Paid Sick Leave after 30 days and their Paid Leave after 90 days.

Employers may require up to 7 days’ advance notice of a foreseeable need for Paid Leave or Paid Sick Leave. Employers may also require a note after an employee uses Paid Sick Leave three consecutive workdays in a row. Employers with at least 51 employees must pay out up to 56 hours of accrued Paid Leave upon separation of employment. Violations of the Ordinance may result in fines of up to $3,000 and employers may be liable for damages equal to three times the amount of leave denied or lost, plus interest and attorney’s fees. The Ordinance also creates a private right of action for employees.

After pushback from the business community, the Chicago City Council voted to delay the effective date of the Ordinance from December 31, 2023 to July 1, 2024. Chicago-based employers should direct any concerns about the new ordinance to the Department of Business Affairs and Consumer Protection Office of Labor Standards who is accepting public comments until February 16, 2024.