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Employment & Labor Law FLASHPOINTS January 2024

Catherine R. Locallo, Robbins Schwartz, Chicago
312-332-7760 | E-mail Catherine R. Locallo

Survey of Paid Leave Laws for Illinois, Cook County, and the City of Chicago

In December 2023, Cook County and the City of Chicago joined the State of Illinois to ensure employees have some form of paid leave beginning in 2024. While they share a running theme, the state law, Cook County Ordinance, and City of Chicago Ordinance vary in several respects, including covered employers, covered employees, paid leave provisions, and implementation dates. Below is an overview of each to assist employers with compliance obligations.

Paid Leave for All Workers Act

The Paid Leave for All Workers Act (PLFAWA), 820 ILCS 192/1, et seq. (eff. Jan 1, 2024), applies to private employers and most governmental employers, except school districts and park districts. The PLFAWA also exempts any employer covered by a municipal or county ordinance “that requires employers to give any form of paid leave to their employees” that is in effect as of January 1, 2024 (i.e., Cook County and City of Chicago ordinances, etc.). 820 ILCS 192/15(p). Any municipal or county ordinance enacted or amended after January 1, 2024, must comply with the PLFAWA.

The PLFAWA does not apply to the following employees: short-term employees in higher education (those who are employed for less than two consecutive calendar quarters during a calendar year and have no reasonable expectation that they will be rehired by the same employer for the same service in a subsequent calendar year); temporary student workers who work part-time in higher education; certain railroad employees; certain construction workers; and employees covered by a collective-bargaining agreement that provides services nationally and internationally of delivery, pickup, and transportation of parcels, documents, and freight.

Further, the PLFAWA does not affect the validity or change the terms of collective-bargaining agreements in effect as of January 1, 2024. After that date, new and successor collective-bargaining agreements must either comply with the PLFAWA or contain an explicit waiver of the law.

Pursuant to the PLFAWA, eligible employees are entitled to earn and use up to 40 hours of paid leave during a 12-month period or a prorated number of hours of paid leave. There are two options for the provision of paid leave: accrual or frontloading. Under the accrual method, paid leave accrues at a rate of 1 hour of leave for every 40 hours worked and an employee must be allowed to carry over unused paid leave from one 12-month period to the next. Under the frontloading method, the minimum amount of paid leave shall be made available to the employee on the first day of their employment or the first day of a designated 12-month period. Employers who frontload the minimum amount of paid leave may require employees to take leave during the 12-month period or forfeit it. Regardless of the option selected, the minimum increments for use of paid leave cannot exceed 2 hours per day.

Leave can be used for any reason, and employers cannot require an employee to provide a reason for the leave or documentation or certification as proof or support of the leave. However, if the leave is foreseeable, an employer may require an employee to provide seven calendar days’ notice for use of leave. If the leave is not foreseeable, an employee must provide notice as soon as practicable.

Similar to the Family and Medical Leave Act of 1993, Pub.L. No. 103-3, 107 Stat. 6, when taking leave pursuant to the PLFAWA, an employer must maintain coverage for the employee and any family member under any group health plan for the duration of the leave under the same conditions as if the employee had not taken leave.

For a period of at least three years, an employer must maintain and preserve the following records for each employee: hours worked; paid leave accrued; paid leave used; and remaining paid leave balance.

Employers must post a notice summarizing the law and information on how to file a charge. Retaliation for taking leave is prohibited, and employers cannot consider the use of paid leave as a negative factor in connection with an individual’s employment. There are civil penalties for violations of the PLFAWA.

Employers can access the law, proposed rules, FAQ, and notice here.

Cook County Paid Leave Ordinance

On December 14, 2023, the Cook County Board of Commissioners adopted the Cook County Paid Leave Ordinance, Cook County Ordinance §42-1, et seq., which closely mirrors the PLFAWA as summarized above.

The Paid Leave Ordinance requires Cook County employers to provide employees with up to 40 hours of paid leave during a 12-month period on an accrual or frontload basis. While the PLFAWA expressly excludes school districts and park districts, Cook County’s Paid Leave Ordinance does not. The Cook County Commission on Human Rights, the agency tasked with enforcing the Paid Leave Ordinance, recently confirmed that the Paid Leave Ordinance does not exempt school districts, community colleges, park districts, or units of local government and that the intention of the Paid Leave Ordinance is to cover municipal employees as well private-sector employees. The only employer exceptions are the government of the United States or a corporation wholly owned by the government of the United States; an Indian tribe or a corporation wholly owned by an Indian tribe; and the government of the state or agency or department thereof. “Employee” does not include short-term employees in higher education, temporary student workers who work part-time in higher education, and certain railroad employees.

While the Paid Leave Ordinance took effect on December 31, 2023, the county’s enforcement of it will not begin until February 1, 2024. Also, similar to the PLFAWA, the Paid Leave Ordinance grandfathers collective-bargaining agreements in effect on or before January 1, 2024, until they next expire, at which time they either need to comply with the Paid Leave Ordinance or include express waiver language.

The Cook County Government website indicates that the county will provide updated notices and FAQs prior to January 1, 2024. Further, the county will adopt interpretive and procedural rules for its enforcement of the Paid Leave Ordinance in early 2024.

Similar to Cook County’s Earned Sick Leave Ordinance, which took effect on July 1, 2017, home-rule municipalities may opt out of the Paid Leave Ordinance. Many home-rule municipalities opted out of the Earned Sick Leave Ordinance on behalf of all employers operating within their territorial limits.

City of Chicago Paid Leave and Paid Sick and Safe Leave Ordinance

The City of Chicago passed a substitute leave ordinance on November 9, 2023. An amendment passed on December 18, 2023, delays the ordinance’s implementation until July 1, 2024. Upon its implementation date, the ordinance will replace the former Earned Sick Leave Ordinance. (Employers may choose to implement sooner than July 1, 2024. For employers who will await the July 1, 2024, implementation date, they must continue to comply with the Earned Sick Leave Ordinance which took effect on July 1, 2017.) The ordinance provides more generous leave benefits than those under the PLFAWA.

Under the ordinance, an employer (defined as “a person who gainfully employs at least one Employee”) must provide up to 40 hours of annual paid leave and 40 hours of annual paid sick leave, over each 12-month period of employment to covered employees (defined as employees who, “in any particular two-week period, perform[ ] at least two hours of work for an Employer while physically present within the geographic boundaries of the City”). Chicago Public Schools are subject to the ordinance.

Employees working in the construction industry who are part of a collective-bargaining agreement are exempt from the ordinance. Further, the ordinance does not affect the validity or change the terms of collective-bargaining agreements in effect as of July 1, 2024. After that date, new and successor collective-bargaining agreements must either comply with the PLFAWA or contain an explicit waiver of the law.

For every 35 hours worked, an employee earns 1 hour of paid leave and 1 hour of paid sick leave. Employees exempt from overtime requirements shall be assumed to work 40 hours in each work week for purposes of accrual unless the employee’s normal work week is less than 40 hours, in which case paid time off accrues based on that normal work week.

Employers may choose to provide the leave as employees accrue it throughout the year, or they may choose to front-load 40 hours of each type of leave on the first day of each 12-month accrual period. Employers may set a reasonable minimum increment for use of paid time off under the ordinance, not to exceed 4 hours of paid leave per day and 2 hours of paid sick leave per day.

If the leave is foreseeable, an employer may require an employee to provide seven calendar days’ notice for use of leave. If the leave is not foreseeable, an employee must provide notice as soon as practicable.

Employers may also choose to grant unlimited paid time off under the ordinance. If the Employer chooses this route, the unlimited paid time off must be granted on the first day of employment and unused time is not required to be carried over.

Employers must post notice of employee rights under the ordinance, and there are strict monetary penalties for noncompliance.

Additional City of Chicago Provisions for Paid Leave for Any Reason

Under the ordinance, “Employers shall allow Covered Employees to use accrued Paid Leave no later than on the 90th calendar day following the commencement of the Covered Employee’s employment.” Chicago Municipal Code §6-130-030(d). Leave can be used for any reason, and employers cannot require an employee to provide a reason for the leave or to provide documentation or certification as proof or support of the leave.

Front-loading employers are “not required to carryover an Employee’s unused Paid Leave hours to the subsequent 12-month period.” Chicago Municipal Code §6-160-030(f). If the employer uses the accrual method, “the Covered Employee shall be allowed to carry over to the following 12-month period up to 16 hours of Paid Leave and 80 hours of Paid Sick Leave.” Chicago Municipal Code §6-130-030(c)(1).

Upon separation of employment or transfer (voluntary or involuntary) of an employee outside Chicago, some employers are required to payout unused paid leave as part of final compensation:

1. Large employers (more than 100 “Covered Employees” (Chicago Municipal Code §6-130-010)) must pay out all unused paid leave for any reason beginning on July 1, 2024.

2. Medium employers (“an Employer with between 51 and 100 Covered Employees” (Chicago Municipal Code §6-130-010)) must pay out no more than “16 hours of Paid Leave until July 1, 2025.” However, “[o]n and after July 1, 2025, Medium Employers shall be required to pay the monetary equivalent of all unused, accrued Paid Leave as part of the Covered Employee’s final compensation at the Covered Employee’s final rate of pay.”

3. Small employers (“an Employer with 50 or fewer Covered Employees” (Chicago Municipal Code §6-130-010)) are “not required to pay out unused Paid Leave.”

Additional City of Chicago Provisions of Paid Sick and Safe Leave

Under the ordinance, employers must allow employees to use accrued paid sick leave “no later than on the 30th calendar day following the commencement of the Covered Employee’s employment.” Paid sick leave may be used only for specific reasons, which include when (1) “the Covered Employee is ill or injured”; (2) “a Covered Employee’s family member is ill, injured, or ordered to quarantine”; (3) “the Covered Employee, or a Covered Employee’s family member, is the victim of domestic violence, . . . a sex offense, or trafficking in persons”; (4) “the Covered Employee’s place of business [or family member’s school, class, or place of care] is closed . . . due to a public health emergency”; and (5) “a Covered Employee obeys an order . . . to . . . stay at home to minimize the transmission of a communicable disease.” Chicago Municipal Code §6-130-030(i).

When an employee is absent for more than three consecutive workdays, the employer may require certification “that the use of Paid Sick Leave was authorized under subsection 6-130-030(i)(1).” Chicago Municipal Code §6-130-030(i)(3).

For both employers that use the accrual method and those that use a front-loading method, “[a]t the end of a Covered Employee’s 12-month accrual period, the Covered Employee shall be allowed to carry over to the following 12-month period up to . . . 80 hours of Paid Sick Leave.” Chicago Municipal Code §6-130-030(c)(1). “[U]pon a Covered Employee’s termination, resignation, retirement, or other separation from employment, the Covered Employee’s employer is not required to provide financial or other reimbursement for unused Paid Sick Leave.” Chicago Municipal Code §6-130-020(a)(4).

The notice and other information relevant to implementation should be available prior to July 1, 2024.

Next Step for Employers

Employers subject to the PLFAWA, the Cook County Paid Leave Ordinance, or the City of Chicago Paid Leave and Paid Sick and Safe Leave Ordinance should review their current policies and update accordingly by the respective deadlines.

For more information about employment and labor law, see CONDUCTING THE EMPLOYMENT PRACTICES AUDIT (IICLE®, 2023). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

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