Executive Summary: In January 2023, the Illinois Legislature passed the Paid Leave for All Workers Act (PLAW Act). The PLAW Act specifically exempted the City of Chicago and certain municipalities in Cook County because they already had existing paid sick leave policies, which allowed for leave for traditional sick leave reasons such as the employee’s or employee’s family’s illness or preventative medical care, assistance for victims of violent crimes, public health closures of the business, etc. In response, both Chicago and Cook County have significantly amended their paid sick leave ordinances, with the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance (“Chicago Ordinance” or “CPLO”) and the Cook County Paid Leave Ordinance (“Cook County Ordinance”). Some municipalities have been drafting their own paid leave laws instead of having to follow the PLAW Act, which must be done before January 1, 2024. We will update this Alert after January 1 with a list of municipalities that have done so. While the Cook County Ordinance closely resembles the PLAW Act, such that one employer policy can likely be used to cover employers with employees anywhere in Illinois besides Chicago, the Chicago Ordinance is different in many respects and will require its own special treatment. Moreover, just as there were (and still are) substantial inconsistencies and questions left with the PLAW Act, the Chicago Ordinance leaves even more open issues and is in desperate need of clarification and rules.
This article is intended to briefly highlight a few of the main aspects of all three laws and links the reader to more comprehensive articles for further details and guidance. (Please click here for the detailed discussion on the PLAW, here for the discussion of the Chicago Ordinance, and here for the discussion of the Cook County Ordinance.)
Illinois and Cook County
The PLAW Act goes into effect January 1, 2024 and Cook County’s ordinance goes into effect on December 31, 2023, and both contain the following main provisions:
- 40 hours of paid leave that can be used for any reason;
- Earned at a rate of 1 hour for every 40 hours worked;
- Can be accrued and carried over to the next year, but use can be limited to 40 hours per year;
- Can frontload 40 hours instead of accruing, with no carryover required;
- Can frontload prorated amount for a partial benefit year (*but in no event may the amount be less than if the employee had accrued based on hours worked);
- Leave must begin accruing on first day of employment but may have 90-day waiting period before use is permitted;
- Exempt employees are assumed to work 40 hours per week unless they regularly work less;
- Can require notice of no more than 7 days if the need for leave is foreseeable; as soon as practicable if not foreseeable;
- Cannot require an employee to provide a reason for taking the leave;
- Can require minimum increment for use of no more than 2 hours.
Chicago
Although the Chicago Ordinance was supposed to go into effect January 1, 2024, it was delayed to July 1, 2024, likely due to many remaining questions and inconsistencies to be addressed through rulemaking and the need to give employers a reasonable chance to amend their existing policies. Until July 1, 2024, employers must still provide paid sick leave. The key points to the Chicago Ordinance are as follows:
- “Covered Employee" is any employee who, within any 120-day period, performs at least 80 hours of work while physically present within Chicago.
- Examples include those making deliveries and sales calls in Chicago, but not uncompensated commuting time.
- Also includes domestic workers, regardless of whether the worker is an employee, independent contractor, or sole proprietor, including housekeepers, nannies, caregivers, personal chefs, etc.
- Thus, can apply to companies located outside Chicago (even out of state) but whose employees perform the minimum amount of work in Chicago.
- Likewise, a Chicago-based company whose employee works entirely outside of Chicago does not have to provide that employee leave under the Chicago Ordinance.
- Once an employee becomes a Covered Employee, the employee keeps that status and must accrue hours for all time worked in Chicago.
- Two types of paid time off: Paid Leave that can be used for any reason (“Paid Leave”) and Paid Sick Leave, which can only be used for sick leave reasons.
- 1 hour of Paid Leave and 1 hour of Paid Sick Leave accrued for every 35 hours worked in Chicago, each capped at 40 hours per benefit year.
- Can have 90-day waiting period after start of employment to use Paid Leave; 30-day waiting period to use Paid Sick Leave.
- Can set minimum increment for use of 4 hours for Paid Leave and 2 hours for Paid Sick Leave.
- Accrual v. Frontloading: Employers can choose which method.
- If accrual, must allow carryover of 16 hours of Paid Leave, and 80 hours of Paid Sick Leave. Currently, no cap on accrual or use in a year.
- If frontloading, can frontload 40 hours of Paid Leave and/or 40 hours of Paid Sick Leave; do not have to carry over or pay out at end of benefit year and thus, effectively limits accrual and use to 40 hours per year of each type of leave.
- Importantly, if frontloading a pro rata amount for a partial benefit year, the employer must still provide at least as much leave as would be earned through accrual.
- Payout on Termination:
- Do not have to pay out unused Paid Sick Leave.
- No payout of unused Paid Leave for Small Employers (50 or fewer Covered Employees).
- Payout of no more than 16 hours of Paid Leave by Medium employers (51-100 Covered Employees) until July 1, 2025, then payout of all unused Paid Leave required.
- Payout of all unused Paid Leave by employers with more than 100 Covered Employees.
Notice and Recordkeeping for All Three Laws/Ordinances
All three laws/ordinances require notices to be provided and posted in conspicuous locations where other employment law posters are located. All three require the notices to be provided in English and languages commonly spoken in the workplace. Chicago specifically requires the notices to be provided in each employee’s primary language.
The PLAW Act and Cook County Ordinance each require records of hours worked, paid leave accrued and taken, and remaining paid leave balance to be kept for 3 years; Chicago requires 5 years, and failure to do so creates a presumption rebuttable by clear and convincing evidence that the employer violated the Chicago Ordinance.
The Bottom Line
Please refer to the individual articles referenced above for more details on the PLAW Act, Chicago Ordinance, and Cook County Ordinance. We will continue to keep you updated on any developments regarding these laws/ordinances, including further rulemaking and changes.