On July 1, 2024, three ordinances go into effect that will alter critical employment laws for Cook County and Chicago businesses. These three ordinances are: (1) the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance, (2) the One Fair Wage Ordinance, and (3) the Cook County’s Minimum Wage Ordinance. To ensure compliance and avoid potential penalties, employers operating in Chicago must familiarize themselves with these requirements and take appropriate action. Here is what you need to know.

Chicago Paid Leave and Paid Sick and Safe Leave Ordinance
This ordinance mandates that all employers provide eligible employees with two buckets of paid leave they can use for various purposes. Specifically, the ordinance requires that eligible employees receive: (1) up to five days of paid time off (that can be used for any reason), and (2) five days of paid sick and safe leave (that can be used for qualifying reasons). Eligible employees must accrue at least one hour of paid leave and one hour of paid sick and safe leave for every 35 hours worked. Additionally, employers must allow employees to carry over up to 16 hours of unused paid leave (unless leave is frontloaded) and up to 80 hours of unused sick and safe leave. Employers are not required to pay out sick and safe leave upon separation of employment, whereas payout of paid leave depends on the size of the employer.

Failure to comply with the ordinance can result in significant penalties. Therefore, employers should update their payroll systems and employee handbooks to reflect the new accrual rates and usage policies. For more information about the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance, please view our prior blog post here, but note that the ordinance was subsequently amended following our prior post.

One Fair Wage Ordinance
This ordinance phases out the subminimum wage for tipped employees over several years, beginning on July 1. The ordinance will entirely eliminate the subminimum wage by 2028, by increasing the tipped minimum wage eight percent per year.

Non-compliance with the ordinance can lead to fines and civil suits. Therefore, employers need to adjust compensation practices for tipped employees to meet the new base wage requirements. For more information on the One Fair Wage Ordinance please view our prior blog post here.

Cook County’s Minimum Wage Ordinance
This ordinance will increase the regular minimum wage within Cook County to $14.05 per hour worked, up from $14.00. This new minimum wage will apply to all non-exempt employees over the age of 18, but the base wage for tipped employees will remain $8.40 per hour. The minimum wage will continue to be subject to annual adjustments, with exceptions if the unemployment rate in Cook County reaches 8.5 percent.

The Cook County minimum wage remains below the Chicago minimum wage, which currently sits at $15.00 per hour for businesses with 4-20 employees and $15.80 for businesses with 21 or more employees. Note, however, the Chicago minimum wage will also increase on July 1, 2024 to correspond with the Consumer Price Index or 2.5 percent, whichever is lower. The new Chicago minimum wage has not yet been announced.

Failure to pay employees the new minimum wage could lead to an investigation by the Cook County Human Rights Commission, not to mention lawsuits by aggrieved employees. Therefore, affected employers should timely update their payroll systems to reflect the new minimum wage rates.

With these three significant changes quickly approaching, it is important for Chicago employers to act now to update policies, train staff, and adjust payroll systems.