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Chicago
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Cook County
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Effective date
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July 1, 2024 (originally was effective Dec. 31, 2023, but was amended and delayed by six months)
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Dec. 31, 2023
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Covered Employers and Employees
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The city’s ordinance applies to all employers with at least one “covered employee” working in Chicago. A covered employee is defined as one who works at least 80 hours for an employer within any 120-day period while physically present within the geographic boundaries of the city. Once the threshold is reached, the employee will remain a covered employee for the remainder of the time that the employee works for the employer. Any compensable time an employee spends within Chicago counts toward the hours worked.
The city’s ordinance applies to most individuals working in Chicago (including domestic workers), with some narrow exceptions that include:
· Independent contractors (unless the independent contractor is a domestic worker);
· Employees who work for governmental agencies other than the city and its “Sister Agencies” (the ordinance applies to City employees);
· Employees working in the construction industry who are covered by a bona fide collective bargaining agreement (CBA); and
· Other employees who are a party to a valid collective bargaining agreement (CBA) in effect on July 1, 2024. After July 1, 2024, the requirements of the ordinance may only be waived in a bona fide CBA if the waiver is set forth explicitly in the agreement in clear and unambiguous terms.
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The county’s ordinance applies to all employers with at least one “covered employee” working in Cook County. The ordinance applies to most individuals working in the county except for:
· Employees as defined in the federal Railroad Unemployment Insurance Act;
· Federal and state employees;
· Temporary college or university student-employees;
· Certain short-term employees of an institution of higher learning; and
· Independent contractors.
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Accrual
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For every 35 hours worked, employees are entitled to accrue at least one hour of paid leave they can use for any reason and one hour of paid sick leave. The time must accrue in hourly increments and not fractional accruals. There is an exception that allows for monthly accrual if an employer provides employees more hours of leave than what is required under the ordinance.
Accrual begins July 1, 2024, or the employee’s first day of work, whichever is later. Employees who are classified as exempt from overtime will be presumed to work 40 hours per week unless the employee’s normal workweek is less than 40 hours.
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Employees are entitled to accrue paid leave at a rate of at least one hour of paid leave for every 40 hours worked, up to 40 hours accrued in a year.
Accrual begins Dec. 31, 2023, or the employee’s first day of work, whichever is later. Employees who are classified as exempt from overtime will be presumed to work 40 hours per week unless the employee’s normal workweek is less than 40 hours.
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There is a cap on accrual of 40 hours per 12-month period for each type of paid leave. The year or “12-month period” for a covered employee must be calculated from the date the employee begins to accrue paid time off under the ordinance.
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There is a cap on accrual of 40 hours per 12-month period for the paid leave.
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Instead of providing the leave via the accrual method, employers can choose to frontload all 40 hours of paid leave for any reason and 40 hours of paid sick leave on the first day of employment or the first day of the 12-month period. (e.g., on July 1, 2024, for employees working in Chicago at that time).
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Instead of providing the leave via the accrual method, employers can choose to frontload all 40 hours of paid leave on the first day of employment or the first day of the 12-month period. (Dec. 31, 2023, for employees working in Cook County at that time).
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Carryover
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When an employer provides the paid leave via the accrual method, employees are entitled to carryover up to 16 hours of unused paid leave for any reason and 80 hours of paid sick leave from one year to the next.
When employers frontload the paid leave for any reason, no carryover is required. The ordinance is silent as to whether frontloading precludes the year-end carryover for paid sick leave. However, proposed regulations suggest frontloaded paid sick leave will be treated the same. Employers should watch for further guidance.
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When an employer provides the paid leave via the accrual method, any unused paid leave must be carried over to the following year, but employers may limit use to 40 hours in any 12-month period.
When employers frontload the paid leave for any reason, no carryover is required.
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Rate of Pay
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Employees must receive their regular rate of pay when using paid sick leave and paid leave for any reason, which includes continuing healthcare benefits if the employee receives healthcare benefits from their employer. For nonexempt employees, the regular rate of pay to be used for all leave is calculated by dividing the employee’s total wages by the total hours worked in full pay periods in the prior 90 days of employment. These wages do not include overtime pay, premium pay, tips or gratuities, or commissions, but an employee’s hourly rate of pay for leave cannot be less than the employee’s base hourly wage or the applicable minimum wage.
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Employees must receive their hourly rate of pay for paid leave. However, employees engaged in an occupation in which gratuities or commissions have customarily and usually constituted and have been recognized as part of the remuneration for hire purposes must be paid at least the full minimum wage in the jurisdiction in which they are employed when paid leave is taken.
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Existing Policies
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If a covered employee accrued paid sick leave prior to July 1, 2024, and the employer’s existing paid time off policy doesn’t comply with the ordinance, any unused paid sick leave the employee is entitled to carryover must be transferred to the new paid sick leave bank.
If an employer already has a paid time off policy that meets or exceeds the minimum requirements of the ordinance, the employer is not required to provide additional paid leave for any reason or paid sick leave. Note: however, if an employer chooses to charge time required under the ordinance against its paid time off policy, the employer must clearly state in its policy that it is doing so.
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Employers that provide any type of paid leave policy that satisfies the minimum amount of leave required in the ordinance aren’t required to modify the policy if the policy offers an employee the option, at the employee’s discretion, to take paid leave for any reason.
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Unlimited Paid Time Off Policies
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In lieu of the accrual method or frontloading, employers may grant employees “unlimited paid time off” on the first day of their employment or on the first day of a 12-month period, so long as such unlimited hours of paid time may be used for any reason. Employers who use this method are not required to carry over an employee’s unused paid time off to the next benefit year, regardless of whether the paid time off is considered paid leave for any reason or paid sick leave. Employers considering this approach should discuss the pros and cons with counsel prior to implementing such a policy.
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No specific provisions cover unlimited Paid Time Off (PTO) policies.
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Use
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The city’s ordinance does not include any maximum caps on how many hours of paid leave for any reason or paid sick leave an employee may use during a 12-month period.
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Employers are under no obligation to provide more than 40 hours of paid leave for an employee in the 12-month period unless the employer agrees to do so.
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Employees may begin to use accrued paid leave for any reason 90 days after the start of employment and employers may require paid leave for any reason to be taken in 4-hour increments.
Employers are prohibited from asking employees for the reason for the need for such leave and are prohibited from asking for documentation. However, an employer may establish reasonable policies for the use of paid leave for any reason to:
· Require an employee to give reasonable notice, as long as it doesn’t exceed seven days before using such paid leave; and
· Maintain continuity of employer operations by requiring an employee to obtain reasonable preapproval from the employer before using paid leave, subject to rules that will be published by the city’s Office of Labor Standards.
Employees are entitled to use paid sick leave 30 days after the start of employment and employers may require paid sick leave to be taken in 2-hour increments.
If an employee’s need for paid sick leave is reasonably foreseeable, an employer may require up to seven days’ notice before the leave is taken. Where an employee is absent for more than three consecutive workdays, the employer may require certification that the use of paid sick leave was covered by the ordinance. See the text of the original ordinance for details on the type documentation that may be required for paid sick leave.
Employees may use paid sick leave for the following reasons:
- The employee or their family member is ill or injured, or for the purpose of receiving professional care, including preventative care, diagnosis, or treatment, for medical, mental, or behavioral issues, including substance use disorders;
- The employee or their family member is the victim of domestic violence, a sex offense, or trafficking;
- The employee’s place of business is closed by order of a public official due to a public health emergency, or the employee needs to care for a family member whose school, class, or place of care has been closed; or
- The employee obeys an order issued by the mayor, the governor of Illinois, the Chicago Department of Public Health, or a treating health care provider, requiring the employee to:
Unless obligated by a city, state, or federal law, an employee may choose whether to use paid sick leave or paid leave for any reason prior to using any other leave provided by the employer or by city, state, or federal law. In other words, employers cannot force concurrent use of leaves provided by law or employer policy unless concurrent use is required by city, state or federal law.
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Employees may begin to use accrued paid leave for any reason 90 days after the start of employment or 90 days after Dec.31, 2023, whichever is later.
Paid leave may be taken for any reason of the employee's choosing. An employee isn’t required to provide a reason for the leave and may not be required to provide documentation or certification as proof or in support of the leave. An employee may choose whether to use the paid leave prior to using any other leave provided by the
employer or state law.
Employers may require up to seven days’ advance notice of a foreseeable need for paid leave and notice as soon as practicable for unforeseeable use of paid leave.
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Payout
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Certain employers are required to pay out unused paid leave that can be used for any reason upon separation from employment or transfer outside of the geographic limits of the city.
· Employers with 1-50 covered employees are not required to pay out unused paid leave upon separation or transfer.
· Employers with 51-100 covered employees must pay out up to 16 hours of unused paid leave for any reason upon separation or transfer until July 1, 2025. On or after July 1, 2025, these employers must pay out all of the unused paid leave upon separation or transfer.
· Employers with more than 100 covered employees must pay out all unused paid leave for any reason upon separation or transfer, effective July 1, 2024.
- As indicated above, employers can satisfy the ordinance requirements through the use of an unlimited paid time off policy. If they do so, employers must pay employees who are separating employment or transferring to a location outside of Chicago 40 hours of paid time off for any reason minus the hours of paid time off the employee used during the 12-month period before the date of separation.
No employers are required to pay out unused paid sick leave upon separation or transfer, unless they have promised otherwise.
An employee may request payout of their unused paid leave for any reason if they have not received a work assignment for 60 days. If an employer has not offered an employee a work assignment for 60 days, the employer must proactively notify the employee in writing that the employee may request payout of their accrued, unused paid leave for any reason.
If an employee is transferred to a separate division, entity, or location, but still remains employed by the same employer, the employee may continue to use all accrued, unused paid leave for any reason and paid sick leave accrued.
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With one limited exception, no payout is required. However, paid leave under the law mustn’t be charged to an employee's Paid Time Off (PTO) bank or employee vacation account unless the employer's policy permits such a credit. If the paid leave under the law is charged to an employee's PTO bank or employee vacation account, then any unused paid leave must be paid to the employee upon the employee's termination, resignation, retirement, or other separation to the same extent as vacation time under existing Illinois law or rule.
If an employee is transferred to a separate division, entity, or location, but still remains employed by the same employer, the employee may continue to use all accrued, unused paid leave.
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Employer Notice Requirements
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Each time wages are paid, employers must provide employees with a written notice that includes:
· The amount of paid leave for any reason available for use.
· Accrual rate for paid leave for any reason.
· The amount of paid leave for any reason accrued since the last notice.
· The amount of paid leave for any reason used since the last notice.
· The amount of paid sick leave available for use.
· Accrual rate for paid sick leave.
· The amount of paid sick leave accrued since the last notice.
· The amount of paid sick leave used since the last notice.
Employers that credit paid sick leave and paid leave for any reason on a monthly basis may update the notification monthly. Employers may choose a reasonable system for providing this notice, such as listing the information on each wage statement or an online system employees can use to access the information.
Employers must post a notice about the ordinance in a conspicuous place at each facility with a covered employee within the geographic boundaries of the city. If the employer’s workforce includes a significant portion of non-English speakers, the employer must notify the city’s Office of Labor Standards, which will create a notice in other languages. Covered employees may also ask the city for the notice in other languages, which employers must also display in accordance with the ordinance.
Employers must provide a notice of the employee’s rights under the ordinance with the employee’s first paycheck and annually thereafter with a paycheck issued within 30 days of July 1. The city’s Office of Labor Standards will create a model notice.
At the start of employment, employers must also provide written notice of their paid time off policy, including accrual rates and any employee paid time off notification requirements. Employers must also provide their written paid time off policy to each of its covered employees in their primary language.
Notice of any change to the employer’s paid time off policy requirements must be provided to employees at least five days before the change takes effect. If the change will affect the employee’s final compensation, the notice must be provided at least 14 days before.
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Employers must post a notice about the ordinance in a conspicuous place at each facility in Cook County. If the workforce has a significant portion of non-English speakers, the notice must be posted in other languages as well. This notice must also be provided to employees at the time of hire.
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Recordkeeping
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Employers must retain the following records for 5 years or the duration of a claim, civil action, or investigation, whichever is longer:
· Employee names, addresses, hours worked, pay rates, and wage agreements;
· Number of paid leave hours earned each year, dates on which the leave was used and paid; and
· Any other records necessary to demonstrate compliance with the ordinance.
Employers must provide a copy of the records to covered employees upon request.
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Employers must make and preserve records documenting hours worked, paid leave accrued and taken, and remaining paid leave balance for each employee for a period of at least 3 years or the duration of a claim, civil action, or investigation, whichever is longer. Any employer that provides paid leave on an accrual basis must provide notice of the amount of paid leave accrued or used by an employee upon request by the employee.
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