New Chicago Ordinance Will Require Employers to Provide Paid Sick Leave

Today the Chicago City Council passed an ordinance that will require nearly all employers located in Chicago to provide paid sick leave to their employees.  The legislation, which passed 48-0 despite opposition from business and employer groups, follows the lead of similar laws in several states and more than a dozen other cities.  It is expected to be signed into law quickly by Mayor Rahm Emanuel, and will take effect July 1, 2017.

The ordinance will apply to virtually all employers in the city, regardless of the number of employees.  Any business with a location within the city of Chicago or that is subject to city licensing requirements must comply, except for employers in the construction industry.

The law will require employers to provide all employees who work at least 80 hours within any 120 day period to accrue at least one hour of paid sick leave for every 40 hours worked, up to a maximum of 40 hours per year.  The accrual of paid leave starts on the first day of employment (or after the effective date of the ordinance, whichever is later).  Paid sick leave accrues only in one-hour increments.

The law also requires employers to allow employees to carry over one half of his/her unused, accrued paid sick leave, up to a maximum of 20 hours.  In addition, to further complicate matters, employers that are subject to the federal Family and Medical Leave Act must allow employees to carry over up to 40 additional hours of accrued paid sick leave, to use exclusively for FMLA eligible purposes.  However, if an employee carries over and uses those 40 additional hours for FMLA purposes, he/she can use only an additional 20 hours of the accrued paid sick leave in the same 12 month period.

Employees will be allowed to begin using paid sick leave no later than the 180^th calendar day following the commencement of employment.  The leave may be used for the employee’s own illness or injury; illness or injury of the employee’s family member (defined broadly); appointments to receive medical care, treatment, diagnosis, or preventive care; when the employee or a family member is a victim of domestic violence or a sex offense; and when the employee’s place of business or a child’s school or care facility is closed due to a public health emergency.

Employers will be required to compensate employees for the paid leave at the same rate and with the same benefits, including health care benefits, that the employee regularly earns during hours worked.  A special rule for tipped employees provides that the value of the paid sick leave must be at least the full Chicago minimum wage.  In a rare nod to employers, employees are not entitled to receive payment or reimbursement for unused paid sick leave at the time they separate from employment.  (This provision stands on contrast to the Illinois Wage Payment and Collection Act, which generally requires employers to pay accrued, unused PTO upon termination.)

The ordinance allows employers to require employees to provide up to seven days’ notice before leave is taken, but only when the need for leave is reasonably foreseeable. Otherwise the only notice required is “as soon as is practicable on the day” an employee intends to take paid sick leave.  For employees absent for more than three consecutive workdays, the law allows employers to require written certification to confirm that the use of paid sick leave was for proper purposes.

Employers with unionized employees who are covered by a collective bargaining agreement will not be covered by the new ordinance until the CBA expires.  Even then, future CBAs may provide that the requirements of the Chicago ordinance are waived.

Employers will be required to post a notice in their Chicago workplaces informing employees of the Chicago minimum wage and their rights under the new paid sick leave ordinance.  Likewise, employers will be required to provide a similar notice with an employee’s first paycheck that is subject to the new law.  City officials have yet to make the prescribed notices available.

Covered employees may bring suit to address violations of the law, and can recover three times the amount of paid sick leave denied or lost due to a violation, plus attorneys’ fees, interest, and costs.  As with most employment laws, the new paid sick leave ordinance makes it unlawful for employers to retaliate against employees for exercising, or attempting to exercise, their rights under the law.

Chicago employers should begin now preparing to comply with the new ordinance. Among other things, covered employers who do not already provide paid sick leave will need to modify their policies and practices to comply with the law’s requirements.  If you have any questions about the new Chicago paid sick leave ordinance, or would like further guidance on how to comply, please contact Steve Brenneman, Kelly Smith Haley, or the other Fox Swibel attorney with whom you normally work.