Chicago Paid Sick Leave Laws: What Employers Need to Know

Chicago was ahead of the curve when it comes to understanding the importance of paid sick leave for employees. Some states, including California, New York, Arizona, and Washington, have offered this type of leave, along with paid family leave.

It was in June of 2016 when the Chicago City Council unanimously passed an ordinance mandating paid sick leave for Chicago employees. Cook County, Illinois, followed suit shortly after and passed its own mandatory paid sick leave ordinance in October 2016. While the 2 laws are substantially similar and went into effect on July 1, 2017, they differ in scope.

The Cook County Ordinance applies to private employers throughout the jurisdiction. However, it will not impact county municipalities that have their own earned sick leave laws. This is the case provided they are as, or more generous than, the Cook County Ordinance.

Additionally, they must contain remedies against noncompliant employers. This means that covered employers in the municipality of Chicago will only need to abide by the Chicago Ordinance, unless their municipality has opted out.

Keeping track of sick leave based on hours worked by each employee is complicated. Employee time tracking is fraught with risk. There are penalties for failing to properly account for and allow employees to use their earned sick time. Zenefits can help get you in compliance as soon as possible, with our hourly accrual tool, webinars, and team of qualified HR Specialists.

Read on for more information on the Chicago ordinance, and its potential impact on your workplace.

Who is covered under Chicago paid sick leave laws?

The Paid Sick Leave ordinance mandates that all Chicago businesses provide paid sick leave to employees. If an employee works at least 80 hours for an employer in Chicago within any 120-day period, they are covered by the ordinance and will be eligible to receive paid sick leave.

The Chicago Ordinance applies to non-government employers who maintain a business facility within the city of Chicago (“the City”). And/or they are required to maintain a business license to operate within the city.

Covered employees: An employee is covered by the ordinance if they perform at least 2 hours of work for an employer. That must occur within any 2-week period. It must also occur while present in the geographic boundaries of the city of Chicago.

Eligible employees (including domestic employees, day laborers, tipped workers, and home health care workers): In addition to being covered by the ordinance, an employee must be eligible to use accrued paid sick leave.

A covered employee becomes eligible to use accrued paid sick leave on the 180th calendar day following their start date.

A covered employee becomes eligible to use accrued paid sick leave on the 180th calendar day following their start date. That applies once they have worked at least 80 hours within any 120-day period for the covered employer.

When does paid sick leave begin for Chicago employees?

Covered employees will begin accruing their earned paid sick time on the 1st calendar day after their employment.

NOTE: Only hours worked by the employee in the City of Chicago will count toward the accrual of paid sick leave.

When can Chicago employees take paid sick leave?

Employees may take paid sick leave for their own conditions or to care for family members in the following circumstances:

• When the employee or family member is ill, injured, or needs medical care, diagnosis, or preventative treatment.
• When the employee or family member is the victim of a sex offense or domestic violence.
• Or, when the employee’s workplace is closed due to a public health emergency. Or, their child’s school or place of care is closed due to a public health emergency.

How can I comply with Chicago’s paid sick leave laws?

Here’s a quick overview of some of the major requirements employers must put in place. These must be in place to comply with the Chicago ordinance.

NOTE: Employers subject to the Family and Medical Leave Act must follow additional sick leave requirements, which we have flagged below.

1. Accrual requirements

For paid sick leave, covered employees will begin accruing leave on the 1st calendar day after their employment date. Since employees will accrue leave in hourly increments, employers are required to accurately track the hours of non-salaried employees. That way, they can receive the correct leave entitlement.

Accrual amount

Employees will earn 1 hour of paid sick leave for every 40 hours worked.

Exempt employees

Covered employees who receive a salary and are classified as “exempt” under the Fair Labor Standards Act are assumed to have worked 40 hours per week. The rate of accrual for employees exempt from overtime is 1 hour of paid sick leave for each week of employment.

If the salaried position is for an amount different than 40 hours, the employee will accrue leave at the rate of 1 hour for every 40 hours of salaried work.

Leave cap

Sick leave hours are capped at 40 hours per 12-month period unless the employer has a higher internal limit.

FMLA

For employers subject to FMLA, a covered employee may use a maximum of 60 hours of accrued paid sick leave, with 20 of those hours granted or carried over for FMLA-qualifying purposes.

NOTE: Covered employers are not required to allow accrual while the employee is on paid or unpaid leave.

2. Carryover requirements

At the end of their 12-month accrual period, employers must allow employees to carry over up to half (a maximum of 20 hours, unless the employer has a higher internal limit) of their unused paid sick leave to the following year.

FMLA requirement

An employer subject to the Family and Medical Leave Act must allow employees to carry over 40 hours of unused paid sick time to be used exclusively for FMLA-qualifying purposes. This is in addition to their 20 carried over hours of regular unused paid sick time.

3. Accrual vs. immediate grant of leave

Instead of requiring employees to accrue leave over time, employers can also choose to frontload, or immediately grant employees paid sick leave at the beginning of their employment.

If the employer follows the frontloading guidelines in the ordinance, they will be exempt from accrual and carryover requirements. However, the frontloading requirements vary based on an employer’s FMLA status.

• Non-FMLA employer (<50 employees): Employees are granted all 40 hours of paid sick leave no later than 180 days after their start date. The employer is not required to provide additional leave.
• FMLA-qualifying employer (>50 employees): Employees are granted all 40 hours of paid sick leave no later than 180 days after their start date. However, employers subject to FMLA must allow employees to use 20 of their 40 hours of Paid Sick Leave for FMLA-qualifying purposes. The employer must then grant an additional 20 hours of paid sick leave each subsequent year to be used for FMLA-qualifying purposes.
• FMLA grant breakdown: In a frontloading scenario, an FMLA-eligible employee would receive all 40 hours of their paid sick leave. and be able to use 20 of those hours as FMLA time in their first year. Upon the additional grant of 20 hours of paid sick leave each subsequent year, the employee will then be able to take up to 40 hours of FMLA paid sick time per year, and a separate 20 hours of regular paid sick leave if necessary.

NOTE: If the employee’s reason for paid sick leave does not qualify for FMLA purposes, then they remain capped at 40 maximum hours of regular paid sick leave.

4. Payments

Once paid sick leave has been used by the covered employee, an employer must pay out the leave no later than the next regular payroll period.

However, the employer is not required to pay out accrued or unused sick leave upon the end of the employee’s employment (resignation, termination, etc.).

NOTE: Employers may NOT request covered employees to waive their sick leave rights in exchange for payment.

5. Notice requirements

Employers must place paid sick leave notices in conspicuous locations at any Chicago facility with covered employees. The notice must inform employees of the current Chicago minimum wage, and their right to paid sick leave.

Paycheck notice

Employers must also provide notice to covered employees with their first paycheck subject to the ordinance (July 1 onwards), or their 1st paycheck after hire. This notice must also inform employees of the current Chicago minimum wage, and their right to paid sick leave.

Employee notice requirements

If the employee’s need for leave is foreseeable, they may be required to provide up to 7 days of advance notice before taking sick leave. If the need for sick leave is unforeseeable, the employee must try to provide notice as soon as possible.

Required documentation from employees

If the employee is absent or is requesting sick time for 3 or more consecutive work days, they may be required to provide documentation that the absence is for a permitted purpose (see above). However, this does not have to include the specifics of the health condition.

6. Waiting period

Employers must allow their employees to use their paid sick leave no later than 180 days after their start date. This applies once they have worked at least 80 hours within any 120-day period.

7. Record keeping

Employers are required under the ordinance to track employee hours. They are also required to maintain records of sick leave accrual. They must make this information available to the Department of Business Affairs and Consumer Protection (BACP) upon request.

Employers must also maintain the following records for covered employees, for at least 5 years:

• Name, mailing address, phone number, and email of each covered employee.
• Job title and occupation of each employee.
• The covered employee’s hire date, and date of sick leave eligibility.
• The number of sick leave hours accrued and used by each covered employee.
• Employee’s pay schedule (hourly, salary, overtime, etc.), compensation, and deductions, as well as an explanation of any additions and deductions.
• Dates of payment to each covered employee.

Do I need to amend my paid sick leave policy?

If your company’s paid leave policy provides sick leave that is the same as or greater than the amount required by the Chicago Ordinance, and can also be taken for the same purpose, and under the same conditions, then you may not need to provide additional sick leave time.

However, you should consult your attorney before making this determination or any other changes based on the ordinance.

NOTE: Employers always have the option to offer more generous earned paid sick time policies than those required by the Ordinance.

What penalties will I face for noncompliance?

Employees can report any violations or denials of sick leave to the City of Chicago. They city may investigate and take action against the employer. Employees also have the right to file civil actions against the employer in court.

You may also be interested in this definitive list of states and cities with paid sick leave laws.

This article has been updated.