Chicago Delays Paid Leave Ordinance Until July 2024
On December 13, 2023, the Chicago City Council voted to amend the city’s new paid leave and paid sick leave. Employers with employees located in Chicago, Illinois would be advised to review the changes made to the ordinance to understand the impact on their operations.
Delayed Effective Date
Originally, the new paid leave and paid sick leave ordinance was scheduled to go into effect on December 31, 2023. The amendment to the ordinance delays the effective date until July 1, 2024. This action provides employers more time to implement any necessary updates to their existing leave policies to comply with the new requirements.
Changed Definition of Covered Employee
The amended ordinance also changes the definition of a “covered employee”, altering the requirements when an employee qualifies for earned paid leave and paid sick leave. The amended ordinance defines a covered employee as an employee who works 80 hours in the geographic boundaries of the City of Chicago within any 120-day period. This is a significant change from the original ordinance that defined a covered employee as anyone who worked at least two hours in Chicago in any particular two-week period.
Updated Payout Requirements
The updated ordinance also delays the requirement for “medium employers” to payout unused paid leave when an employee terminates employment or ceases to be a covered employee due to transferring out of Chicago’s boundaries. Payout is not required for unused paid sick and safe leave.
Medium-sized employers (51 to 100 covered employees) will now only need to payout 16 hours of unused paid leave until July 1, 2025. On or after July 1, 2025, medium-sized employers will need to payout all unused paid leave. Unused paid sick leave does not need to be paid out.
Key Takeaways:
The effective date of Chicago’s paid leave and paid sick leave ordinance has been delayed until July 1, 2024. This delay provides employers more time to determine the steps they need to take to remain compliant with the ordinance. Organizations would be well-served to take time to review the terms of the ordinance, so they are ready to comply come July 1, 2024.
The information provided is a summary of laws and regulations relating to employee benefit plan compliance. This information should not be construed as legal advice. In all cases, employers should consult with their own legal counsel.
