The Chicago Department of Business Affairs and Consumer Protection published the final rules for the new Paid Leave and Paid Sick Leave Ordinance which is set to take effect on July 1, 2024. The new ordinance requires Chicago employers to provide employees with up to 40 hours of Paid Leave and 40 hours of Paid Sick Leave per 12-month period. See prior Benefit Beat articles here and here.

Following are some highlights from the final rules.

12-month period

The final rules clarify that an employer sets the 12-month measurement period used for leave determination. The designated 12-month period must be consecutive months such as employee’s anniversary year, the calendar year, a contract year, the fiscal year, or the tax year.

Carryover of unused leave

Covered employees are entitled to accrue up to 40 hours of paid leave and 40 hours of paid sick leave in a 12-month period. Employees may carryover up to 16 hours of paid leave and 80 hours of paid sick leave from one 12-month period to the next. The final rules confirm that any carryover is in addition to the paid leave or paid sick leave that the employee will earn in the carryover 12-month period.

In lieu of accrual, an employer may frontload 40 hours of paid leave and 40 hours of paid sick leave. The final rules clarify that frontloading relieves the employer from carryover obligations for paid leave but not for paid sick leave.

If an employer adopts a frontloading methodology, advance written notice explaining this must be provided to employees.

Denial of paid leave requests

The ordinance requires employees to obtain reasonable preapproval before using paid leave for the purpose of maintaining continuity of employer operations. The final rules provide that if leave is to be denied based on an employer’s operational needs, the employer must take into account the following factors:

• Whether granting Paid Leave during a particular time period would significantly impact business operations.
• Whether the employer provides a need or service critical to the health, safety, or welfare of the people of Chicago.
• Whether similarly situated employees are treated the same for the purposes of reviewing, approving, and denying Paid Leave.
• Whether the employee has meaningful access to use all their Paid Leave over the 12-month period.

The employer must provide a prompt written explanation of any denial.

Employer written policy and notification

The employer shall adopt a reasonable written paid leave and paid sick leave policy. The written policy shall be provided to the employee in English and any other language in which the employees are literate. Per the final rules, the policy may be a part of an employer manual, handbook, or separate document.

Employers shall provide notification to employees of the availability and use of paid leave and paid sick leave. Per the final rules, a reasonable system for notification includes listing amounts on paystubs, developing an online system where employees can access such information, or providing a hand-written record of available time.

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