© 2024 American Payroll Institute, Inc.
Chicago Passes New Paid Leave Law
Effective July 1, 2024, Chicago, Illinois, will replace its current
paid sick leave ordinance with a new Paid Leave and Paid
Sick and Safe Leave Ordinance [Ordinance Nos. 0002980,
L. 2023 and 0005883, L. 2023]. Employees will begin accruing
leave on July 1, 2024. Paid leave (i.e., paid time off or PTO) may
be used for any reason, while paid sick and safe leave (PSSL)
may be used for similar reasons as the prior ordinance.
The ordinance was initially scheduled to take effect
on December 31, 2023, but the effective date was delayed,
allowing employers more time to achieve compliance.
Proposed rules and FAQs are also available. The proposed rules
will be finalized in April 2024.
Coverage
Employees who work 80 hours in the city in a 120-day
period are covered, and employers only need to have one
covered employee to be subject to the requirements. Once
an employee is covered, they remain covered while employed
with that employer. Travel time in the city that is compensable
is counted toward the threshold. Government employees who
are not part of Chicago or its sister agencies, elected officials,
independent contractors, and employees covered by the
federal Railroad Unemployment Insurance Act are excluded.
Accrual
Accrual begins on the later of July 1, 2024, or a covered
employee’s first day of employment. Employees accrue one
hour of PTO and one hour of PSSL for every 35 hours worked.
Leave accrues in hourly increments unless an employer allows
less. Exempt employees are assumed to work 40 hours weekly
for accrual unless their normal workweek is less than 40 hours.
Employees can accrue up to 40 hours of both PTO and PSSL per
12-month period. PTO can be used on the 90th calendar day
of employment, and PSSL can be used on the 30th calendar
day of employment. PTO and PSSL may be used prior to other
forms of leave. If an employee has accrued, unused PSSL prior
to July 1, 2024, and the employer’s existing policy does not
comply with the new ordinance as of July 1, then the employee
is entitled to roll over any leave into the new program.
Carryover. Employees may carry over 16 hours of PTO and
80 hours of PSSL yearly. Employers are not required to payout
the excess hours however, if the employer does not allow an
employee to take leave to prevent meaningful access to time
off, then the employee may carry over the excess hours.
Frontloading. Employers may front load 40 hours of
both PTO and PSSL on the first day of the 12-month period.
Employers are not required to carry over frontloaded PTO,
but carryover is still required for PSSL. An employer may also
offer unlimited PTO for any reason, in lieu of separate accrual
for PTO and PSSL. If an employer does so, then on separation,
employees must be paid the equivalent of 40 hours of PTO
minus the amount used in the last 12-month period.
Benefits
PTO may be used for any reason. PSSL may be used if the
employee or a family member is ill, injured, or needs to receive
professional care. PSSL may also be used due to a closure based
on a public health emergency of the employee’s workplace, or
a family member’s school, class, or place of care. PSSL may be
used to cover leave related to quarantine or a communicable
disease. The minimum increment for an employee to take
leave cannot exceed 4 hours for PTO and 2 hours for PSSL.
Pay
Employees on leave must be paid the same rate with
the same benefits as their regular employment. Payment is
calculated by dividing an employee’s total wages by the total
hours in the 90 employment days prior to leave. Overtime,
premium payments, gratuities, and commissions are not
included in “wages,” but leave payments must at least equal
the applicable minimum wage. Currently, the minimum
wage in Chicago is $15.80 per hour for employers with 21 or
more employees and $15 per hour for employers with 4 to
20 employees. Employees must be paid for leave by the next
regular pay period after leave is taken.
Upon transfer out of Chicago or separation of
employment, the employer must pay out the accrued,
unused PTO. However, small employers (50 or fewer covered
employees) are not required to pay out unused PTO. Medium
employers (51 to 100 covered employees) need only pay
out a maximum of 16 hours. Effective July 1, 2025, medium
employers must payout all unused PTO. Employees who have
not been assigned work for 60 days may request that their
accrued, unused PTO be paid out.
Pay statement, notice requirements
Employers are required to post a notice of the requirements
in a conspicuous place and provide notice with a covered
employee’s first paycheck and annually with a paycheck issued
within 30 days of July 1. Employers must provide their PTO
policy in the employee’s primary language. Each time wages
are paid, employers must provide employees with: accrual
rates, accrued amounts of PTO and PSSL per pay period, leave
used, and unused leave available. Employers may choose a
reasonable system for providing this information, such as
including it on the actual pay statement or within an online
system employees can access. Records must be maintained for
at least 5 years.
March 4, 2024 Volume 26 Issue 5
Chicago Passes New Paid Leave Law
Effective July 1, 2024, Chicago, Illinois, will replace its current
paid sick leave ordinance with a new Paid Leave and Paid
Sick and Safe Leave Ordinance [Ordinance Nos. 0002980,
L. 2023 and 0005883, L. 2023]. Employees will begin accruing
leave on July 1, 2024. Paid leave (i.e., paid time off or PTO) may
be used for any reason, while paid sick and safe leave (PSSL)
may be used for similar reasons as the prior ordinance.
The ordinance was initially scheduled to take effect
on December 31, 2023, but the effective date was delayed,
allowing employers more time to achieve compliance.
Proposed rules and FAQs are also available. The proposed rules
will be finalized in April 2024.
Coverage
Employees who work 80 hours in the city in a 120-day
period are covered, and employers only need to have one
covered employee to be subject to the requirements. Once
an employee is covered, they remain covered while employed
with that employer. Travel time in the city that is compensable
is counted toward the threshold. Government employees who
are not part of Chicago or its sister agencies, elected officials,
independent contractors, and employees covered by the
federal Railroad Unemployment Insurance Act are excluded.
Accrual
Accrual begins on the later of July 1, 2024, or a covered
employee’s first day of employment. Employees accrue one
hour of PTO and one hour of PSSL for every 35 hours worked.
Leave accrues in hourly increments unless an employer allows
less. Exempt employees are assumed to work 40 hours weekly
for accrual unless their normal workweek is less than 40 hours.
Employees can accrue up to 40 hours of both PTO and PSSL per
12-month period. PTO can be used on the 90th calendar day
of employment, and PSSL can be used on the 30th calendar
day of employment. PTO and PSSL may be used prior to other
forms of leave. If an employee has accrued, unused PSSL prior
to July 1, 2024, and the employer’s existing policy does not
comply with the new ordinance as of July 1, then the employee
is entitled to roll over any leave into the new program.
Carryover. Employees may carry over 16 hours of PTO and
80 hours of PSSL yearly. Employers are not required to payout
the excess hours however, if the employer does not allow an
employee to take leave to prevent meaningful access to time
off, then the employee may carry over the excess hours.
Frontloading. Employers may front load 40 hours of
both PTO and PSSL on the first day of the 12-month period.
Employers are not required to carry over frontloaded PTO,
but carryover is still required for PSSL. An employer may also
offer unlimited PTO for any reason, in lieu of separate accrual
for PTO and PSSL. If an employer does so, then on separation,
employees must be paid the equivalent of 40 hours of PTO
minus the amount used in the last 12-month period.
Benefits
PTO may be used for any reason. PSSL may be used if the
employee or a family member is ill, injured, or needs to receive
professional care. PSSL may also be used due to a closure based
on a public health emergency of the employee’s workplace, or
a family member’s school, class, or place of care. PSSL may be
used to cover leave related to quarantine or a communicable
disease. The minimum increment for an employee to take
leave cannot exceed 4 hours for PTO and 2 hours for PSSL.
Pay
Employees on leave must be paid the same rate with
the same benefits as their regular employment. Payment is
calculated by dividing an employee’s total wages by the total
hours in the 90 employment days prior to leave. Overtime,
premium payments, gratuities, and commissions are not
included in “wages,” but leave payments must at least equal
the applicable minimum wage. Currently, the minimum
wage in Chicago is $15.80 per hour for employers with 21 or
more employees and $15 per hour for employers with 4 to
20 employees. Employees must be paid for leave by the next
regular pay period after leave is taken.
Upon transfer out of Chicago or separation of
employment, the employer must pay out the accrued,
unused PTO. However, small employers (50 or fewer covered
employees) are not required to pay out unused PTO. Medium
employers (51 to 100 covered employees) need only pay
out a maximum of 16 hours. Effective July 1, 2025, medium
employers must payout all unused PTO. Employees who have
not been assigned work for 60 days may request that their
accrued, unused PTO be paid out.
Pay statement, notice requirements
Employers are required to post a notice of the requirements
in a conspicuous place and provide notice with a covered
employee’s first paycheck and annually with a paycheck issued
within 30 days of July 1. Employers must provide their PTO
policy in the employee’s primary language. Each time wages
are paid, employers must provide employees with: accrual
rates, accrued amounts of PTO and PSSL per pay period, leave
used, and unused leave available. Employers may choose a
reasonable system for providing this information, such as
including it on the actual pay statement or within an online
system employees can access. Records must be maintained for
at least 5 years.
March 4, 2024 Volume 26 Issue 5
