In a first of its kind for Illinois,on June 22, 2016, the Chicago City Council passed the Paid Sick Leave Ordinance, making Chicago the latest in a wave of mandatory paid sick leave ordinances around the country.

Chicago’s Ordinance, which becomes effective next year on July 1, 2017, would require most Chicago employers to provide the following:

  • Employees accrue paid sick leave (“Paid Leave”) of at least one hour for every 40 hours worked, up to a maximum of 40 hours per 12-month period.
  • Employees can carry over up to half of their accrued Paid Leave, up to a maximum of 20 hours, from one year to the next.
  • For employers that are covered by the Family and Medical Leave Act (“FMLA”), employees may carry over up to 40 hours of unused Paid Leave. An employee who uses the carried over 40-hours of FMLA leave for FMLA covered purposesis entitled to use an additional 20 hours of accrued Paid Leave in the same 12-month period, increasing the employer’s Paid Leave obligation to 60 hours.
  • Covered “family members” includeindividuals related by blood or whose close association with the employee is the equivalent of a family relationship.

Coverage

The ordinance would apply to any individual (including partnership, association, corporation, limited liability company, business trust, or any person or group of persons) that gainfully employs at least one eligible employee and maintains a business facility within the geographic boundaries Chicago. The ordinance exempts employers who provide their employees paid time off in an amount and manner that meets or exceeds the ordinance’s minimum standards and requirements.

The ordinance defines “employee” to cover any individual permitted to work by an employer who works in Chicago for at least 80 hours in any 120-day period. The ordinance excludes a number of workers from coverage, including certain employees employed in agriculture or aquaculture, outside salesmen, members of a religious corporation or organization, and any employee working in the construction industry who is covered by a bona fide collective bargaining agreement.

How Much Paid Leave Do Employees Get?

Employees begin accruing Paid Leave on the first calendar day following the start of their employment or on July 1, 2017, whichever is later. The ordinance notes that new hires are entitled to use accrued Paid leave 180 calendar days after the commencement of their employment. Employees would accrue Paid Leave at the rate of one hour for every 40 hours worked, up to a maximum of 40 hours per 12-month period, with carry over allowed of up to half of their accrued, unused Paid Leave up to a maximum of 40 hours the following year. In addition, if an employer is subject to the FMLA, each eligible employee shall be allowed to carry over up to 40 hours of accrued, unused Paid Leave at the end of the 12-month accrual period to be used exclusivelyfor FMLA covered purposes. If an employee uses the carried over 40-hours of FMLA leave, the employee is entitled to use no morethan an additional 20 hours of accrued Paid in the same 12-month period.

Covered Reasons

Under the ordinance, an employee can use Paid Leave for any of the following reasons:

  • When the employee or a covered family member is ill or injured, or is receiving medical diagnosis, care, or treatment, or preventive medical or health care;
  • Certain absences of the employee or the employee’s family member who is a victim of domestic violence or “a sex offense” as defined in the Illinois Criminal Code of 2012; and
  • Closure of the employee’s place of business or the employee’s child’s school or place of care by order of a public official due to a public health emergency.

“Family member” is defined to include an employee’s child, legal guardian or ward, spouse under the laws of any state, domestic partner, parent, spouse or domestic partner’s parent, sibling, grandparent, grandchild, or any other individual related by blood or whose close association with the employee is the equivalent of a family relationship.

Paying Accrued Leave

Employers must pay Paid Leave at the same rate and with the same benefits, including health care benefits, that the employee regularly earns during hours worked. For tipped employees, the employee would be entitled to receive at least the full Chicago minimum wage ($10.00 per hour) when being paid for used sick leave.  Employers are not obligated to cash out an employee’s accrued, unused Paid Leave upon separation of employment.

Notice Requirements

The ordinance allows employers to require up to seven days’ advance notice of the intention to use Paid Leave for foreseeable absences.  lf the need to use Paid Leave is not foreseeable, such as for a sudden illness, an employer may require an employee to give notice as soon as practicable via phone, e-mail, or text message.

Covered employers are required to post a notice advising employees of their rights under the ordinance in a conspicuous place at any workplace or job site that is located within the geographic boundaries of the City. The Chicago commissioner of business affairs and consumer protection shall prepare a model notice for employers to use.  In addition, every employer would be mandated to provide a notice advising an eligible employee of his or her rights under the ordinance when the first paycheck subject to the ordinance is issued to the employee.

Proof of Illness

The ordinance allows employers to require reasonable documentation that the employee used paid leave for a permitted purpose only when the employee is absent for more than three consecutive workdays. Such documentation includes documentation signed by a licensed health care provider, or where an employee is absent to care for a victim of domestic violence or covered sex offenses, a police report, court document, a signed statement from an attorney, a member of the clergy, or a victim services advocate, or any other evidence that supports the employee’s claim.

What Employers Should Do

Chicago employers should begin taking steps to ensure that they will be able to achieve full compliance with the ordinance by the law’s July 1, 2017 effective date, including updating any sick leave or paid time off policies.  We also anticipate that the Chicago commissioner will provide template notices and other guidance before the effective date.