As we have previously reported, both Chicago and Cook County have passed paid sick leave laws that entitle covered employees to earn up to 40 hours of paid sick leave per year. Our previous alerts on these ordinances, which are linked here and here, provide background on the basic requirements of these ordinances.
Last month the Cook County Commission on Human Rights (the “Commission”) issued draft regulations implementing the County Ordinance. These regulations will be published in final form by June 1, at which time the Commission will also publish model postings and required notices. Although some of the regulations may change in response to comments the Commission receives, employers should not wait until the regulations are finalized to begin reviewing their policies (or drafting a policy if necessary) to ensure they will be in compliance on July 1, 2017.
Importantly, the list of municipalities that have opted out of the Ordinance is growing at a rapid rate, and currently includes the following: Arlington Heights, Barrington, Bedford Park, Elk Grove Village, Elmwood Park, Mt. Prospect, Oak Forest, Palatine, Palos Heights, Palos Park, River Forest, Riverside, Rolling Meadows, Rosemont, Schaumburg, Streamwood, Tinley Park, Burr Ridge, Evergreen Park, Hickory Hills, and Wheeling. We expect more municipalities to opt out as July 1 approaches.
A summary of the regulations follows. Note that this summary includes only the key provisions; please contact us for details on how the Ordinance’s requirements will impact your business.
- Applicability: Virtually all employers are covered by the Ordinance if they have at least one employee in Cook County and a place of business within the County, with certain exceptions including units of local government. Notably, the regulations state that a school district is not a unit of local government, but there are a number of unresolved questions about whether and to what extent the Ordinance may apply to school districts. Regardless, however, since the sick leave benefit requirements in the School Code are more generous than those in the Ordinance, in most cases school districts will not need to increase the amount of sick leave they grant employees as a result of the Ordinance.
- Accrual period: The regulations provide that an employer may use any 12-month period it prefers to use for accrual purposes (e.g., a calendar year, fiscal year, etc.). The accrual period need not begin on July 1, when the Ordinance takes effect.
- Accrual methods: The regulations contain complex rules about how and when employees accrue earned sick leave, but at a minimum, employees are required to earn one hour of paid sick leave for every 40 hours worked, up to a total of 40 hours per year. Alternatively, employers may use a “front loading” method, whereby employees are provided the full amount of leave required by the Ordinance at the start of the accrual period. Notably, employers who use the front-loading method must give the full complement of paid sick leave to new employees retroactive to the start of the accrual period, regardless of when during the accrual period the employee began working for the employer.
- Carryover: In general, employees must be allowed to carry over half of their unused accrued sick leave from one accrual period to the next, up to a maximum of 20 hours. For employers covered by the FMLA, employees must be allowed to carry over up to 40 additional hours of unused accrued sick leave to be used for FMLA purposes only.
- Payout Not Required Upon Separation: Unlike vacation time, employees need not be paid out for any unused accrued earned sick leave upon separation from employment, unless a collective bargaining agreement provides otherwise.
- PTO Allotment May Satisfy Requirements: If an employer provides paid time off (PTO) at a rate and in a manner that complies with the Ordinance, such a policy will be deemed to satisfy the requirements of the Ordinance. Therefore, some employers may already in compliance with the Ordinance, or their policies may just require modest revisions, such as to the permissible reasons for taking leave under the policy.
EMPLOYERS MUST HAVE WRITTEN POLICIES
The draft regulations make clear that a written policy is absolutely essential. Without it, the Commission will make certain assumptions about an employer’s practices and employees’ rights under the Ordinance that may lead to penalties for employers. Some examples include the following:
- The Ordinance allows an employer to prohibit a new employee from using any accrued leave the employee accrues until the employee has worked 180 days for the employer. If an employer’s policy does not address when employees may begin to use paid sick leave, the Commission will assume that employees will be able to use any accrued leave as soon as they become eligible to use leave, namely, once they have worked at least 80 hours during a 120-day period.
- The Ordinance provides that employers may establish a minimum increment in which paid sick leave can be used of no fewer than four hours. Absent a written policy, however, the Commission will presume that employees may use paid sick leave in increments of one hour.
- Employers may set reasonable requirements for employees to provide notification that they are using paid sick leave. If, however, an employer cannot produce a written policy with respect to its notification requirements, the Commission will presume that no such policy exists and that employees can use paid sick leave without providing any prior notification and without suffering any discipline as a result.
OTHER POTENTIAL PITFALLS
The regulations enumerate the prohibited practices under the Ordinance, including retaliating against employees who exercise their right to use earned sick leave, requiring employees to find coverage as a condition of using earned sick leave, and requiring or forbidding employees to use earned sick leave. The regulations also require employees to maintain personnel and payroll records going back five years that show, among other things, the number of hours of paid sick leave each covered employee was awarded and used and the dates on which the employee used paid sick leave.
Non-compliance with the regulations may be costly: Where the Commission finds a violation of the Ordinance, it may impose a fine of up to $1,000 per day per affected employee, award lost wages, and order other injunctive relief. Employees may also bring a lawsuit for violations of the Ordinance. For these reasons, we urge employers to review their current sick leave policies, and to work with counsel to ensure compliance with the Ordinance.