If Pain, Yes Gain – Part 116: A Holiday Miracle – Chicago Delays Implementation of New Paid Leave Law ‘Til Mid-2024

What You Need To Know:

• On December 13, 2023, the Chicago City Council voted to amend the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance (the “Amended Ordinance”) and delay implementation of both Paid Leave and Paid Sick and Safe Leave until July 1, 2024. Under the earlier version of the Ordinance, which was enacted last month, the Paid Leave and Paid Sick and Safe Leave entitlements were slated to go into effect on December 31, 2023.
• Until July 1, 2024, Chicago’s existing paid sick leave ordinance will remain in effect. Chicago will remain excluded from compliance with the separate Illinois Paid Leave for All Workers Act (“PLAWA”), which goes into effect on January 1, 2024.[1]
• The amendment also modifies other notable provisions of the Ordinance, including the definition of a Covered Employee.

Background

On November 9, 2023, the Chicago City Council passed the Ordinance and surprised many employers with its December 31, 2023 effective date. The sweeping changes – mandating 40 hours of Paid Leave and 40 hours of Paid Sick and Safe Leave – left employers scrambling to change and align their paid leave policies as the year end approached.

For more details, see Seyfarth’s original alert, here.   

Highlights of the Amended Ordinance:

Obligation to Provide Paid Sick and Safe Leave / Paid Leave. The Amended Ordinance delays the requirement to begin accrual of Paid Sick and Safe Leave and Paid Leave until July 1, 2024.

Definition of “Covered Employee.”  Under the Amended Ordinance, a “Covered Employee” is defined as an employee who works at least 80 hours within any 120-day period. This is a change from the original Ordinance’s definition – any employee who performs at least two hours of work in a two-week period. In doing so, the change avoids some of the concerns raised by employers about needing to provide Chicago Paid Leave and Paid Sick and Safe Leave to employees who come to the City for isolated conferences or meetings. The 80-hour requirement also aligns with coverage under the existing City sick leave law (i.e., the ordinance that remains in place during the first half of 2024). Notably, the Amended Ordinance states that “Once the [coverage] threshold is reached, the Employee will remain a Covered Employee for the remainder of the time that the Employee works for the Employer.”

Adjustment to Other Ordinance Dates.  The Amended Ordinance makes additional adjustments to other deadlines in the law. The period for Medium-size employers to payout only 16 hours of Paid Leave upon employees’ separation from employment was adjusted from December 31, 2024 to July 1, 2025. After July 1, 2025, Medium-size employers will need to pay out all earned, unused Paid Leave when an employee separates from employment. The date for collective bargaining agreement changes likewise moves from January 1, 2024 to July 1, 2024 – nothing in the Amended Ordinance will affect a collective bargaining agreement that is in force on July 1, 2024.

Written Policy Requirement.  The Ordinance already required that employers provide employees with their written paid time off policy. The Amended Ordinance added that the written policy must be provided in the primary language of each Covered Employee.

Private Cause of Action. The Amended Ordinance changes the date after which employees can sue their employers for violation of the Ordinance’s Paid Leave provisions – until July 1, 2025. It also creates a “cool off period” until July 1, 2026, requiring that employees can only initiate a civil action after (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.

What Employers Need To Do:

• Employers should continue reviewing their existing paid leave and paid sick leave policies and plan for compliance with the Amended Ordinance by July 1, 2024.
• Monitor for further guidance from the City of Chicago (including finalizing the Draft of Proposed Rules).
• Ensure development of a system to provide employees with paid leave balance notices.
• Confirm rates of pay for calculating paid time off for Chicago employees.
• Train managers and supervisors on the updated paid leave obligations.

With the paid leave landscape continuing to expand and grow in complexity, we encourage companies to reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with these laws and paid leave requirements more generally.  To stay up to date on paid leave developments, please click here to sign up for Seyfarth’s Paid Leave mailing list.  Companies interested in Seyfarth’s paid sick leave laws survey should reach out to paidleave@seyfarth.com.

 

[1] For more information on the Illinois PLAWA, see our prior Legal Updates here and here.