United States: Chicago Adopts Final Rules Implementing Paid Sick Leave Ordinance

As most employers in the "Chicagoland" area are hopefully already aware, and as we reminded employers in our Alert on June 22, 2017, both Chicago and Cook County have enacted paid sick leave (PSL) ordinances that go into effect July 1, 2017. Although the two ordinances are remarkably similar as written, the two jurisdictions have interpreted some portions of the ordinances in a different manner. Cook County's Interpretative and Procedural Rules went into effect on May 25, 2017. Chicago's rules were finalized June 28, 2017. Fortunately, Chicago significantly changed some of its draft rules, and clarified others. Although there are still some differences in interpretation between Chicago and Cook County, those differences are much more manageable than under Chicago's draft rules. We also note that as of July 6, 2017, 101 municipalities in Cook County (out of 131 not including Chicago) have opted out of the earned sick leave ordinance since June 22, 2017. Importantly, employers located in opted-out municipalities will still be required to provide paid sick leave for their employees' work performed in a Cook County municipality that has not opted out.

Because of the delay in issuing final rules, employers may find themselves without written policies in place by July 1, 2017. In that case, it will be important for employers to at least provide the necessary notices to employees with their first paychecks after July 1, which can be found here for Chicago and here for Cook County, and post those notices in the same place they post all other employment law notices. Until employers can get written policies in place, they should also be carefully tracking all employees' hours (which is required under the Illinois Wage Payment and Collection Act anyway), and tracking the accrual of PSL in at least the minimum required manner as stated in the two ordinances.

This Alert is intended to remind employers with employees performing work in Chicago and Cook County that they must immediately evaluate their current leave policies to determine whether they comply with the upcoming requirements for paid sick leave, or whether they will need to draft an entirely new policy. Because of the complexities of these new ordinances and the differences in interpretations, we have separately prepared a more detailed article that can be accessed here and directly from the In Depth Analysis page of our website. This article has now been updated with the final Chicago rules. Within the more detailed article, readers will find links to both ordinances, both sets of rules, and a handy chart that compares and contrasts the differences in the two sets of rules.

General Issues: At the outset, employers must know that in general, they will need to provide employees with one hour of paid sick leave for every 40 hours worked in either Chicago or Cook County (unless the work is performed in a Cook County jurisdiction that has opted out). Both ordinances restrict usage to 40 hours in a year (unless the employer chooses to allow more) for general sick leave purposes, and up to another 20 hours if the employee is taking time off for FMLA purposes. Again, these are generalities covered by the ordinances, and there are exceptions and variances, which are discussed in more detail in the linked Article.

Use of sick leave: Both ordinances allow for the use of paid sick leave for the same reasons: 1) for an employee's illness or injury (including medical care, treatment and diagnosis) and preventative medical care; 2) if an employee needs to care for an ill or injured family member or if a family member is receiving preventative care; 3) if an employee or family member is victim of domestic violence or a sex offense; 4) for an employee's need to care for a child whose school has been closed due to a public health emergency; or 5) if the employee's place of business has been closed for the same reason.

"Family members" under both ordinances are defined broadly, and include the employee's child (biological, adopted, step, and foster), spouse, domestic partner, parent (including biological, foster, stepparent, or adoptive parent), sibling, grandparent, grandchild or other blood relative, or any person whose close association with the employee is the equivalent of a family relationship.

Union Employees and Other Exclusions: Both ordinances allow unions to waive paid sick leave requirements in collective bargaining agreements, as long as the waiver is clear.

Carryover: Both ordinances allow for carrying over half, up to 20 hours of unused paid sick leave from one year to the next, and up to 40 hours if the leave is being used for an FMLA leave in the next year. Where the two sets of rules greatly diverge is how exactly the time is carried over. Very generally speaking, in Cook County, the unused leave is to be cut in half with one half being carried over to be used for any of the general types of sick leave stated in the ordinance, and the other half being available for use if the employee has an FMLA leave the next year. Chicago's rules, however, provide that up to 20 hours can be carried over for regular paid sick leave purposes, and another 40 can be carried over for FMLA purposes (for a total of 60).

Avoiding Tracking of Accrued Time or Carrying Over: Both sets of rules provide ways in which employers can avoid having to track time or carry it over from one year to the next. Unfortunately, both rules handle it differently. Generally speaking, in Cook County, an employer may avoid having to track the accrual of earned sick leave and avoid having to carry over any unused earned sick leave to the next year if it grants at the beginning of the first year of employment 40 hours of Ordinance-Restricted Earned Sick Leave (the type of leave allowed in the ordinance), and then in each subsequent year, 60 hours of Ordinance-Restricted Earned Sick Leave plus 40 hours of FMLA-Restricted Earned Sick Leave (for a total of 100 hours). If an employer wishes to only avoid having to carry over unused sick leave from one year to the next, but still have to track sick leave as it is being earned, then at the beginning of the second and all subsequent years of employment, it would need to provide an immediate grant of at least 20 hours of Ordinance-Restricted Sick Leave and 40 hours of FMLA-Restricted Earned Sick Leave.

Under Chicago's rules, however, an employer need only grant 40 hours of paid sick leave within the first 180 days after hire, and then 60 hours at the beginning of each subsequent year, and allow the employee to use the leave for any of the reasons listed in the ordinance, in order to avoid both having to track accrual of paid sick leave or carrying over unused sick leave into the next year. Chicago's rules allow an employer to use the 60 hours either 40 for FMLA and 20 for regular PSL, or 20 for FMLA and 40 for PSL.

Limits on Use: In Cook County, an employer can limit use of PSL to 40 hours in a year without regard to whether the sick leave was carried over from the prior year or whether it is earned in the current year. However, in one circumstance, an employee has the right to use up to 60 hours, which is when he carries over 40 hours from the prior period that is designated as FMLA-Restricted Earned Sick Leave, and then uses all 40 hours. At that point, he can use up to an additional 20 hours of Ordinance-Restricted Earned Sick Leave.

Under the Chicago rules, however, an employer can limit use of PSL to 40 hours per year of "regular use" paid sick leave, plus 20 hours of PSL for FMLA use (thus opposite of Cook County's allowance of use of 40 hours for FMLA and 20 for "regular" paid sick leave). If an employer frontloads 60 hours of PSL at the beginning of a benefit year, then it must allow employees to use either 40 regular PSL hours and 20 FMLA hours, or 20 regular PSL hours and 40 FMLA hours.

Procedures for Enforcement and Remedies: The remedies and procedures for enforcement are also different. Although both rules state that a private right of action is available, the methods of enforcement and potential damages are different. See the full article for the details on enforcement options and potential remedies and damages.

Conclusion: Now that Chicago has issued its final rules, and has changed and clarified many of the rules since its original draft, it will be much easier for employers in both jurisdictions to craft policies that comply with both ordinances. Although there are still differences in the two jurisdictions' interpretations of the very similar ordinances, those differences can be overcome with a careful review of current policies or drafting of new policies. All employers with any employees in these jurisdictions must immediately review their current policies and determine whether they comply with the ordinances and rules (which is unlikely given the litany of minimum requirements), whether exiting policies can simply be amended, or whether the employer needs entirely new policies. We are available to consult on all of these issues.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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