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Chicago workers will soon be able to earn at least 10 days paid leave annually — double what they’re currently guaranteed.
A majority of City Council members approved expanding paid leave for workers within city limits by a 36 to 12 vote Thursday over the objections of some major business groups.
The new ordinance goes into effect Dec. 31. The policy allows five of those days to be used for any reason. The policy applies to employees who in a two-week period perform at least two hours of work within city limits and does not supersede collective bargaining agreements for unionized employees.
The city already mandates workers get at least five days of paid sick leave annually. The expansion passed Thursday sets the city up to lead its peers when it comes to the number of paid days off workers must receive, and it’s the latest in a series of pro-labor policies the City Council has passed.
Illinois enacts mandatory paid leave ‘for any reason’
“My working class roots, they run deep,” said Ald. Michael Rodriguez, one of the main sponsors of the ordinance and chair of the Workforce Development committee. “This policy not only helps workers, it helps businesses. Study after study shows paid leave increases worker productivity and worker retention. If COVID taught us anything, it’s that workers need days off. This can be a life or death issue.”
The proposal voted on Thursday was the product of months of negotiations between alderpersons, labor and business groups. Supporters of expanding paid leave originally proposed 15 days of paid time off annually. While concessions were made to lessen the impact on businesses, major business groups have still opposed the new regulations after negotiations broke down last month.
An attempt Thursday by Ald. Brendan Reilly to add a provision that would give businesses 30 days to be able to correct any alleged violations before a lawsuit could commence failed to pass — although debate was expected to continue on the topic, with a similar seven-day proposal introduced by Ald. Jason Ervin. .
“In the last 48 hours, I’ve received a number of frantic phone calls from various members of the business community who have essentially waved the white flag and accepted that this ordinance will pass. They’re asking for this one small provision so that this ordinance does not become a jackpot for litigation,” Reilly said.
Here’s a breakdown of the new regulations.
How many more paid days off will Chicago workers receive?
Some workers will get an additional five paid days off annually they can use for any reason — unlike paid sick days that are intended to be used for things like illness or caring for family.
Workers don’t have to provide a reason for taking the paid leave, but employers can establish policies like requiring employees to provide seven days notice or comply with a pre-approval process.
Starting Jan. 1, 2024, workers will begin to accrue one hour of paid leave and paid sick leave for every 35 hours worked. Both types of leave will be capped at 40 hours in a 12-month period, or five days of each annually.
Supporters of the ordinance say it will help boost the rights of low-wage workers, who are often women and not offered vacation days, and that it will allow workers to live more full lives.
“Is it too much to give workers the ability to take time off to care for a sick family member? Is it too much to give a worker the ability to go to their daughter’s ballet recital? Is it too much to give workers the ability to live a life worth living?” Ugo Okere, policy director for Raise the Floor Alliance said in support of the policy Thursday.
Employees can carry over up to 16 hours, or two days, of paid leave to the following year, and up to 80 hours, or 10 days, of paid sick leave.
Employers also have the option of immediately granting workers 40 hours of paid sick leave and 40 hours of paid leave at the start of their employment or each year, rather than requiring it be accrued. They can also grant unlimited paid time off as well.
Employers must allow workers to use paid sick leave no later than 30 days after they’ve started working and paid leave must be able to be used no later than 90 days.
What if the worker doesn’t use up all of their paid leave days?
If an employee resigns, retires, is terminated or is transferred outside of the city, they can be paid out for their unused vacation days — but not for their sick days.
The amount depends on the size of the business they work for. In a concession to small business, employers with 50 or fewer employees will not be required to pay out any unused paid leave days.
Medium-sized businesses, which are defined as those with 51 to 100 employees, will have a year to phase in the full payout amount. They must pay out up to 16 hours, or two days, of paid leave until Dec. 31, 2024. Starting in 2025, they will be required to pay out all unused, accrued paid leave, which is capped at seven days, or 56 hours.
Large businesses with more than 100 employees must pay up to the maximum of seven unused days.
What impact will the new paid leave ordinance have on Chicago businesses?
Despite negotiations, major business groups are still opposed to the new leave policies, including the Chicagoland Chamber of Commerce, Illinois Restaurant Association and Illinois Hotel & Lodging Association. Business groups have argued the new regulations will increase costs, especially for small businesses, who are already facing increased inflation and new policies like the elimination of the subminimum wage set to take effect.
“We are extremely disappointed that members of the City Council ignored the concerns of the business community, dismissed our efforts to reach a compromise, and rushed to pass the poorly drafted paid leave ordinance, forcing employers of every size and sector to comply with the most expensive and complicated form of paid leave in the country in only eight weeks,” 11 business associations said in a joint statement Thursday after the vote. “In passing this ordinance, City Council sent a very clear message that they do not support Chicago’s business community, which drives our city’s economy, employs our residents, and creates revenue to invest in critical city services.”
Johnson announced the support of additional business groups Wednesday, including the Illinois Hispanic Chamber of Commerce, which initially opposed the ordinance.
In addition to concessions like exempting small businesses from having to pay out workers for their unused vacation days, the city’s Office of Labor Standards will also undertake a study on the economic impact the exemptions have on them. Another study will also be undertaken to recommend paid leave and paid sick leave policies for domestic workers that they can use across multiple employers.
Businesses that violate the ordinance can be subject to fines up to $3,000, and can be liable for damages equal to three times the amount of leave denied or lost, plus interest and attorney’s fees.
Employees can also pursue lawsuits against employers for violating the ordinance. Private right to actions regarding paid leave provisions can’t take place until Jan. 1, 2025 – a concession for businesses who argued an earlier start date would be too soon for businesses to comply with.
When does the new Chicago paid leave ordinance go into effect?
The ordinance is slated to go into effect at the end of next month, on Dec. 31, with certain provisions like the right to private action pushed back to later dates.
How soon the new regulations would go into effect was a point of opposition for business groups who argued it was too soon for businesses to come into compliance, especially with the new state regulations that are set to take effect.
Starting next year, Illinois workers can begin to accrue up to five days of paid time off annually that they can use for any reason.
“And now having seen paid time off at the state level — barely giving them time to prepare for next year — we are going to add this at the 11th hour,” Ald. Raymond Lopez said Thursday.
But the new state law doesn’t apply to Chicago because it already has an existing paid sick leave ordinance in place. Proponents have said if the city doesn’t expand paid leave for Chicago workers, the city will be falling behind the rest of the state.
“If we don’t do anything, on January 1st Chicago workers will have less rights than the rest of the state,” Militza Pagan, policy director for the Committee on Workforce Development told city council members last week.
Chicago Public Schools will not have to comply with new regulations until July 1, 2024, according to the ordinance.
Tessa Weinberg covers Chicago government and politics for WBEZ.