Chicago's Paid Leave and PSL Ordinance Clarifications (2024)

Chicago’s Paid Leave and PSL Ordinance Clarifications (2024)

The city of Chicago has recently updated and clarified its paid leave and paid sick leave (PSL) ordinance, which will take effect on July 1, 2024. These changes aim to protect employees across the city while giving employers a clear roadmap for compliance.

This article will explore the updates, key provisions, and clarifications the city provides for Chicago businesses to stay compliant. We’ll also cover how Mosey can elevate your corporate compliance measures.

What Is Chicago’s Paid Leave Ordinance?

Chicago’s paid sick leave (PSL) ordinance went into effect on July 1, 2017. It allows employees to accrue and use paid time off for personal illness, family medical needs, or other qualifying reasons.

Employees are entitled to up to 40 hours of paid sick leave and 40 hours of general paid leave for a multitude of reasons. The ordinance runs in conjunction with the state of Illinois PLAWA program.

In 2024, the city of Chicago revised its Paid Leave and PSL ordinance to expand employees’ rights and clarify several areas that have been challenging for employers to interpret and implement.

What Are the Key Changes to Chicago’s Paid Leave Ordinance?

As of July 1, 2024, employers operating in Chicago must adhere to updated rules governing paid leave.

Here are the key changes:

Broader Leave Entitlements

Employees are now entitled to paid leave not only for sickness but also for personal reasons or general paid time off (PTO).

Increased Accrual and Usage Rates

The rate at which employees can accrue paid leave has increased, offering workers more flexibility in how and when they take time off.

Carryover Adjustments

Employees can now carry over a larger portion of unused leave into the following calendar year.

More Detailed Record-Keeping Requirements

Employers must now maintain more comprehensive records regarding accrual, usage, and carryover of paid leave.

These changes are designed to give employees more access to necessary time off, while employers must ensure they comply to avoid fines or penalties.

How Does This Affect Employer Coverage?

The 2024 ordinance applies to any employer that maintains a business facility within Chicago or must hold a business license to operate in the city. This includes all industries, from retail and hospitality to healthcare and professional services.

The ordinance applies to all employees who work at least 80 hours within city limits over the course of a 120-day period, regardless of the employer’s location. Employers are also required to provide leave to remote and hybrid workers who live in Chicago but work elsewhere.

Eligibility includes full-time, part-time, and seasonal employees, as well as domestic and temporary workers, provided they meet the hours-worked threshold.

What Are the Accrual and Carryover Rules?

Paid leave accrual is one of the most significant clarifications in the 2024 ordinance. Employees will now accrue one hour of paid leave for every 35 hours worked and can accrue up to 40 hours of paid leave per year.

Unused paid leave can be carried over into the next calendar year, though employers can limit this carryover to 80 hours. If an employee is covered by the Family and Medical Leave Act (FMLA), they are entitled to carry over an additional 40 hours to use for FMLA-related reasons.

Additionally, rather than allowing employees to build up paid time off over time, employers can provide 40 hours of paid leave and 40 hours of paid sick leave at the start of the year.

Providing at least 40 hours of paid leave means the employer won’t have to worry about carrying over any leftover hours. However, providing 40 hours of paid sick leave at once doesn’t alleviate the employer’s responsibility to carry over any unused sick time into the following year.

What Are the Permissible Uses for Paid Leave?

Under the updated ordinance, employees can use paid leave for various reasons. Paid sick leave offers more leniency because it relates to family members, especially if an employee is already the parent or caregiver for said family member.

Personal Illness or Injury

Employees can take time off for their medical needs or recover from an illness.

Family Care

Paid leave can be used to care for a family member who is ill, injured, or requires a medical appointment.

Victim Services

Employees who are victims of domestic violence, sexual assault, or stalking can use paid leave to access necessary services.

School or Care Facility Closures for Dependents

If a child’s school or daycare is closed or a dependent’s care facility is compromised because of public health concerns, employees can use their paid leave to care for them.

The ordinance recently added the option to use paid leave for personal reasons or general PTO. This gives employees greater flexibility in deciding how to use their accrued time off.

What Is the Required Notice Period and Documentation?

Employers can require employees to provide reasonable notice when taking leave. For example, employees are expected to give notice seven days in advance for foreseeable leave (e.g., scheduled medical appointments or planned trips).

As for unforeseeable leave, notice should be given as soon as possible. Employees do not have a reasonable way of knowing that they (or a qualifying dependent) may develop an illness or injury, so employers are expected to be as accommodating as possible in urgent situations.

Employers can request documentation when an employee takes leave for more than three consecutive workdays. Acceptable forms of documentation include doctor’s notes, police reports (for victim services), or notices of school closures.

What Are the Anti-Retaliation Protections?

The ordinance also strengthens protections against retaliation. Employers are strictly prohibited from retaliating against employees who exercise their rights under the paid leave ordinance.

Employees are protected from retaliation when filing a complaint or reporting non-compliance with the ordinance. They cannot be penalized or terminated for using or requesting paid leave. Employees are also protected from retaliation when cooperating in an investigation or legal proceeding related to the ordinance.

Employers found guilty of retaliation may face significant fines and legal consequences, further emphasizing the importance of understanding and complying with the ordinance.

What Are Your Record-Keeping and Compliance Obligations?

The updated ordinance imposes stricter record-keeping requirements for employers. Records are useful if there’s ever a misunderstanding or dispute regarding used or accrued paid leave. Being as thorough as possible can help employers avoid the appearance of noncompliance.

Track Paid Leave Accrual

This includes documenting how much paid leave each employee has accrued, used, and carried over.

Retain Records for Five Years

Employers must maintain all records related to paid leave accrual and use them for a minimum of five years.

Ensure Transparency

Employees must also have access to their paid leave balance upon request. Employers should have systems in place to provide this information accurately and in a timely manner.

Failure to maintain proper records can lead to compliance issues and fines, so HR managers should update their organization’s payroll and systems to meet these new requirements.

What Are the Penalties for Non-Compliance?

Employers who fail to comply with the 2024 paid leave ordinance may face significant penalties. Violation penalties can include:

Fines of up to $500 for first offenses and up to $3,000 for subsequent or concurrent violations
Back pay and other damages owed to affected employees
Legal action from the city of Chicago

Repeat violations can lead to additional penalties with increasing severity, including business license revocation. HR professionals should work closely with their legal and compliance teams to confirm that all aspects of the ordinance are followed.

What Steps Should Employers Take?

The ordinance’s effective date has already passed, and employers are expected to comply. Existing businesses should review their policies, and emerging businesses should create procedures that respect the new regulations.

Review and Update Policies

Ensure your paid leave and PTO policies align with the new requirements. This may involve revising your employee handbook or paid leave agreements.

Train Managers and Supervisors

Supervisors and managers should be trained on the new rules to avoid unintentional violations or miscommunications with employees.

Audit Your Payroll Systems

Work with payroll providers to make sure your systems can track leave accrual, usage, and carryover in accordance with the new ordinance.

Communicate With Employees

Keep your employees informed about their rights and obligations under the updated ordinance. Clear communication can prevent confusion or disputes later on down the road.

Remember, it’s okay to exceed the requirements of the Chicago paid leave ordinance, but do not rewrite or modify them. You can offer your employees more than what you have to offer, but you’re never allowed to provide them with less. Utilize the paid leave ordinance as a mile marker to help your organization develop compliant and effective policies.

Stay Compliant With Mosey

Chicago’s 2024 paid leave ordinance is just one part of a broader trend toward increasing employee protections in cities across the U.S. Employers should expect continued changes in labor laws that promote workplace fairness and flexibility.

For HR professionals, staying informed about local labor regulations is more crucial than ever. As these regulations evolve, businesses will need to adapt their policies and practices to remain compliant while continuing to support their workforce effectively.

Mosey’s compliance management platform simplifies the process of tracking state and local requirements for organizations of all sizes.

Our compliance automation walks you through the information you need to quickly, easily, and effectively meet various compliance requirements. Schedule a demo with Mosey today to learn how we can help you optimize your business.

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