A Concise Summary of Chicago’s New Paid Leave Requirements

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Authored by Laura Friedel and Saman Haque

Chicago’s new Paid Leave and Paid Sick and Safe Leave Ordinance (“Paid Leave Ordinance”) is fast approaching on July 1, 2024. When it takes effect, employers will need to comply with new paid leave requirements that apply to all Chicago employees (including those who work from home in Chicago).

To help employers prepare for the July 1st effective date, we share this graphic summarizing the requirements of the new law.

Chicago Paid Sick & Safe LeaveChicago Paid Leave for Any Reason
Hours AvailableUp to 40 hours of Paid Sick Leave in a 12-month period.Up to 40 hours of Paid Leave in a 12-month period.
CarryoverUp to 80 hours; potentially more if not meaningfully allowed to access.Up to 16 hours unless frontload; potentially more if not meaningfully allowed to access.
Accrual RateAccrue 1 hour of each type for every 35 hours worked.Accrue 1 hour of each type for every 35 hours worked.
Accrual Start and FrontloadingEmployees begin accruing on their first day of employment, based on hours worked within the City of Chicago.

If an Employer chooses to frontload, they must provide the 40 hours of Paid Sick Leave within 30 days of employment.		Employees begin accruing on their first day of employment, based on hours worked within the City of Chicago.

If an Employer chooses to frontload, they must provide the 40 hours of Paid Leave within 90 days of employment.
Eligibility and Waiting PeriodsAny employee who works 80 hours in the City of Chicago in a 120-day period is eligible. Once an employee is eligible they remain eligible.

Employers may require employees be employed 30 calendar days before using Paid Sick Leave.		Any employee who works 80 hours in the City of Chicago in a 120-day period is eligible. Once an employee is eligible they remain eligible.

Employers may require employees be employed 90 calendar days before using Paid Leave.
Minimum IncrementsEmployers may require use in increments of at least 2 hours.Employers may require use in increments of at least 4 hours.
Notice & ApprovalIf foreseeable, may require not more than 7 days’ notice.May require 7 days’ notice and require pre-approval. May only deny if necessary based on reasonable, pre-established rationale.
Use & DocumentationMay be used for own or family member illness, injury, care, treatment; sexual or domestic violence; public health emergency.

Cannot request certification (documentation) until after the third consecutive day of Paid Sick Leave.		May be used for any reason.

Cannot request any documentation.
Payment on TerminationNot required to be paid on separation.

Note: If combined with PTO/Vacation, need to pay out all.		Depends on size of employer:

Small Employers (50 or fewer employees):
No payment required.

Medium Employers (51-100 employees): Up to 16 hours until 7/1/25, then up to 56 hours (or 40 if frontload).

Large Employers (101+ employees): Up to 56 hours
(or 40 if frontload).

Note: If combined with PTO/Vacation, need to pay out all.
Other Policy RequirementsAll policy changes must be provided to employees 5 days before effective. Policy changes to the employer’s paid time off policies that affect a covered employee’s right to final compensation for such leave must be provided to employees 14 days before effective.If denying, employer must provide written notice with a pre-established policy rationale (i.e., business/operational needs, staffing requirements, specific blackout days).

All policy changes must be provided to employees 5 days before effective. Policy changes to the employer’s paid time off policies that affect a covered employee’s right to final compensation for such leave must be provided to employees 14 days before effective.
Record Retention RequirementsEmployers must maintain employee census information (name, contact information, job title, ability to earn tips, hire date, rate of pay, hours worked per day and per week, and payment type (hourly, salary, commission, etc)).

Employers must maintain Chicago Ordinance employee data (date of eligibility under ordinance, hours accrue or awarded for each type of leave, hours used and dates of usage of each type of leave).		Employers must maintain employee census information (name, contact information, job title, ability to earn tips, hire date, rate of pay, hours worked per day and per week, and payment type (hourly, salary, commission, etc)).

Employers must maintain Chicago Ordinance employee data (date of eligibility under ordinance, hours accrue or awarded for each type of leave, hours used and dates of usage of each type of leave).

Additionally, we recently hosted a webinar on the Chicago Paid Leave Ordinance. You can view the webinar here.

For additional information, please see our recent articles on Chicago’s Paid Leave Ordinance:

Watch LP’s Chicago Paid Leave Ordinance Webinar: What You Need to Know Before the Law Takes Effect on July 1, 2024

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The effective date of Chicago’s new Paid Leave and Paid Sick and Safe Leave Ordinance (“Paid Leave Ordinance”) is fast approaching on July 1, 2024. When it takes effect, employers will need to comply with new paid leave requirements that apply to all Chicago employees (including those who work from home in Chicago).

To help employers prepare for the July 1st effective date, LP’s Employment & Executive Compensation Group recently hosted a webinar on the Chicago Paid Leave Ordinance. You can view the webinar here.

We will continue to provide information to help employers comply with the new law’s requirements. Stay tuned for a graphic summarizing the requirements in an upcoming LP3 email.

For additional information, please see our recent articles on Chicago’s Paid Leave Ordinance:

Chicago Paid Leave Requirements: What you need to know and do before July 1st

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Starting July 1, 2024, the Chicago Paid Leave Law will come into effect, impacting how businesses manage employee leave and benefits within the city.

Please join us for a complimentary webinar geared towards human resources professionals, in-house counsel, business owners, and senior leaders. We will review the new law and discuss what you need to do to be ready on July 1st.

Thursday, May 2, 2024 – 11:00 am – 12:00 pm CDT

Click here to register.

DOL Finalizes Updated Overtime Rule – What Employers Need to Know

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Author Saman Haque

On April 23, 2024, the Department of Labor announced final updated rules that expand overtime protections by increasing the salary thresholds to exempt a salaried executive, administrative, or professional employee from federal overtime pay requirements. The new rule will expand eligibility for overtime pay for millions of U.S. workers.

The final rule follows the DOL’s “extensive engagement with employers, workers, unions and other stakeholders.” The DOL issued its proposed rule in September 2023, to which it received over 33,000 comments.

What are the overtime rules?

Under the Fair Labor Standards Act (FLSA), employers must pay employees for hours worked over 40 per workweek, unless employees qualify for specific exemptions. Exemptions may apply to employees classified as bona fide executives and administrative or professional employees. The employees must pass a salary threshold and job duties test to qualify for these exemptions. While the job duties test remains the same, the final rule revised the salary thresholds.

What are the new salary thresholds?

Effective July 1, 2024, the salary threshold will increase to $43,888 (from $35,568). On January 1, 2025, the threshold will increase to $58,656. Beginning July 1, 2027, salary thresholds will be updated every three years based on current wage data.

The rule also adjusts the threshold for “highly compensated employees” to $132,964 on July 1, 2024, and $151,164 on January 1, 2025.

Who is covered by the updated rule?

The overtime exemption applies to workers who are employed as bona fide executive, administrative, professional, and outside sales employees, as well as some computer employees. As mentioned above, the new rule also impacts highly compensated employees, but they have a different salary threshold.

In a press call, Jessica Looman, administrator of the DOL’s Wage and Hour Division, said the July 1st increase will affect approximately one million workers, and the 2025 increase will affect approximately three million workers.

How should employers prepare for the July 1 effective date of the new rule?

Even though the new rule will likely receive pushback and legal challenges, employers should audit positions that are affected by the increases to the salary threshold test. Employers should review whether employees classified as exempt still qualify for the exemptions mentioned above. Employers must decide whether the change in salary threshold warrants increasing employees’ salaries to qualify for the exemptions or whether they should convert the employee to a nonexempt status. Employers must do this while keeping in mind that nonexempt employees are eligible for overtime wages. Employers should consider the impact of converting exempt employees to nonexempt status on employee morale, time-tracking policies, payroll systems, and compensation schedules.

If you have questions about the updated overtime rule or other labor and employment matter, do not hesitate to reach out to the Employment & Executive Compensation Group at Levenfeld Pearlstein.

Additionally, we will host a free a webinar on the new Chicago Paid Leave Ordinance on Thursday, May 2, 2024, from 11:00 am – 12:00 pm CDT. To register, click here.

Key Takeaways from the FTC’s Non-Compete Ban

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Authored by Laura Friedel, Peter Donati, and Jason Hirsh

Yesterday, April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 to implement a new rule banning non-compete agreements for most U.S. workers. Specifically, the new rule prohibits employers from entering into or enforcing (or attempting to enter into or enforce) provisions that restrict workers from going to work for another employer or starting a business. Not only are employers prohibited from entering into non-compete agreements, but employers with active non-compete agreements must notify employees that the restrictions are void. However, the rule does not apply to agreements entered into as part of a bona fide sale of a business, and non-competes with certain “senior executives” that are in place as of the effective date of the rule (likely late August 2024) can remain in effect.

Business groups have already filed suit to block the rule on the grounds that the FTC exceeded its authority. If not blocked by the courts, the rule goes into effect 120 days from the date of publication in the federal register. Employers need to be aware of – and prepare for –if the rule becomes effective. Here are the key takeaways for businesses:

  • The rule prohibits non-compete agreements by classifying them as an “unfair method of competition.” It goes on to define a non-compete agreement as a requirement that prohibits or penalizes a worker for seeking or accepting work with a different person or operating a business, in each case, after their employment ends.
  • There are a couple of key exceptions to the general prohibition on non-competes:
    • The rule does not apply to non-competes entered into as part of a bona fide sale of a business, of a person’s ownership interest in a business, or of all or substantially all of a business’s assets.
    • Also, the rule does not apply to non-competes with “senior executives” that are in place before the rule’s effective date. “Senior executives” are defined as those who are making more than $151,164 annually and are in a “policy-making position.” “Policy-making position” is defined narrowly to include the CEO, COO and other officers and workers who have “final authority to make policy decisions that control significant aspects of a business.” The rule goes on to clarify that it is not enough if the worker advises or exerts influence over policy decisions and that it is not enough to have decision-making authority for only a subsidiary or affiliate of a common enterprise.
  • It is noteworthy that the rule does not prohibit non-solicitation agreements (i.e. prohibitions on soliciting clients or customers). However, the FTC left open the possibility that certain types of customer restrictions may be the functional equivalent of a non-compete – such as sweeping non-acceptance provisions (in which workers agree not just that they won’t solicit customers, but also that they won’t do business with them).
  • The rule applies to all workers, which includes not just employees but also independent contractors, consultants and others.
  • The rule does not specifically speak to workers who are also members, shareholders or partners in the business. As noted above, the rule allows restrictions that are tied to an individual’s sale of their interest in the business. However, the FTC’s comments suggest that the rule will apply to owners of a business to the extent they provide services to the business and are therefore “workers.” It remains to be seen where the line between seller of an interest and worker falls.
  • The rule requires that employers provide notice to any employees who are currently covered by non-compete provisions that are unlawful under the rule that those provisions are no longer enforceable. The rule includes a draft notice to be provided.
  • State law provisions that are more restrictive (such as California) remain in place. Essentially, the FTC rule sets a new floor. States can still take action to limit restrictive covenants above and beyond that floor.
  • Finally, note that the rule applies to both existing restrictions and new ones. So it is important to consider not just new agreements but also those you already have in place.

Unless a court puts the rule on hold, employers should be taking the following steps in the next 30-60 days:

  • Think about how you might use the exception for senior executives with existing covenants to your advantage. If you have agreements in place with individuals who you think may qualify as “senior executives,” confirm that they meet that definition and, if appropriate, make changes to their role or compensation so they do. If you have individuals who would qualify as senior executives and don’t currently have non-competes, consider whether to take advantage of this 120-day window to implement them.
  • Review existing agreements with an eye toward:
    • Confirming that confidentiality, non-disclosure and trade secret provisions are as strong as you need to protect your business.
    • Implementing non-solicitation provisions if they aren’t already in place.
    • Revising non-acceptance of business provisions to carve out situations where accepting business would be a prohibition on going to work with a new employer (for instance, going to work for a client or customer, or going to work for a company that also works with your client or customer)
  • If you have agreements in place that include non-compete provisions that violate the rule, either amend those agreements to remove those provisions or prepare to issue the required notices.
  • KEEP WATCHING OUR WEEKLY LP3 EMAILS. AS NOTED ABOVE, LITIGATION HAS ALREADY BEEN FILED TO BLOCK THE RULE. WE WILL KEEP YOU APPRISED OF DEVELOPMENTS.

If you have questions about the new rule, do not hesitate to reach out to LP’s Employment & Executive Compensation Group.

New Paid Leave Requirements for Chicago Employees Starting July 1 – What to Know and How to Prepare

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Authors Laura Friedel and Saman Haque

Effective July 1, 2024, employers will need to comply with new paid leave requirements that apply to all Chicago employees (including those who work from home from Chicago). The Chicago City Council passed the Paid Leave and Paid Sick and Safe Leave Ordinance (“Paid Leave Ordinance”) on November 9, 2023. Although the ordinance’s new requirements originally were slated to go into effect on January 1, 2024, an amending ordinance delayed the effective date for most obligations to July 1, 2024.

What changes take effect on July 1, 2024?

The Paid Leave Ordinance implements two separate requirements: (1) that employees earn up to 40 hours of paid leave for any purpose (“PTO”), and (2) that employees earn up to 40 hours of paid sick leave (“Paid Sick Leave”) per 12-month period. Under the ordinance, employees will accrue both PTO and Paid Sick Leave at a rate of at least one hour for every 35 hours worked. The Paid Leave Ordinance also requires that employers allow employees to carry over up to 16 hours of PTO and up to 80 hours of Paid Sick Leave each year, though employers may avoid the requirement to carry over PTO by “frontloading” the 40 hours of PTO each year (as described below).

Who is covered by the new rule?

The Paid Leave Ordinance applies to any employer with at least one employee, and to any employee who works at least 80 hours in Chicago during a 120-day period. Once an employee meets that threshold, they are deemed a “covered employee” for the duration of their employment with that employer.

Employers subject to a collective bargaining agreement with more generous paid time off should continue to comply with the collective bargaining agreement’s provisions.

What are the notice requirements?

Chicago employers must (1) post a notice of the new requirements, (2) adopt a written policy explaining PTO and Paid Sick Leave rights and responsibilities and share the policy with employees when they are hired, and (3) provide employees with PTO and Paid Sick Leave accrual and use information each pay period. Additionally, employers must provide a copy of their employment policies to workers with regular work duties in Chicago in the worker’s primary language. Finally, employers must give employees five calendar days’ notice of any changes to the PTO or Sick Leave policies and 14 days’ notice of any changes to other employment policies. Any required notices can be provided electronically with covered employees’ paychecks.

What are the requirements for employers with unlimited PTO policies?

If a Chicago employer has “unlimited” or “flexible” paid time off, the Paid Leave Ordinance requires that, at termination, they pay out 40 hours of PTO less any PTO the employee has used over the course of the previous 12 months. Employers with unlimited or flexible paid leave policies should make sure to track the use of paid time off by employees accurately to avoid paying out the full 40 hours. Employers who use an unlimited PTO policy should still give their employees notice of the law’s requirements and indicate “unlimited” on covered employees’ PTO statements.

How does the Paid Leave Ordinance impact employers with accrual-based PTO systems?

If an employer uses an accrual system, its employees must accrue both PTO and Paid Sick Leave at a rate of at least one hour for each 35 hours worked. Employers may cap accruals and use at 40 hours for each kind of leave in a 12-month period. Employers with an accrual system must allow employees to carry over up to 16 hours of PTO and up to 80 hours of Paid Sick Leave each year. Employers that use an accrual system must adopt a policy that explains the accrual rate.

What about employers with frontloading PTO systems?

Employers that frontload PTO and Paid Sick Leave must provide at least 40 hours of PTO and 40 hours of Paid Sick Leave at the beginning of each 12-month period. While employers who frontload don’t need to allow carryover of PTO into the new year, they still must carry over up to 80 hours of unused Paid Sick Leave (even though employees don’t have a right to use more than 40 hours in a year). Employers that frontload PTO and Paid Sick Leave should be aware that employees who quit early in the year will still be entitled to a payout for the full year’s allotment of PTO (or, if it is consolidated into a single bank, of the full bank).

How does the Paid Leave Ordinance impact employers outside Chicago?

The ordinance applies to Chicago employers and to employees of non-Chicago employers who physically work in Chicago for at least 80 hours in a 120-day period, including those working remotely.

Illinois employers outside of Chicago must comply with the Illinois Paid Leave for All Workers Act, which took effect on January 1, 2024. The Illinois Paid Leave for All Workers Act does not apply in Chicago or any other jurisdiction with an existing paid time off requirement. 

What should employers do to get ready for the new requirements?

Employers should:

  • Determine whether they will frontload or accrue for PTO and Paid Sick Leave.
  • Review existing policies to confirm compliance with the new ordinance and clearly explain how PTO and Paid Sick Leave will be handled.
  • Ensure payroll systems track and document time off availability and usage properly.
  • Confirm how notice will be provided each pay period.
  • Determine whether any employees who aren’t otherwise viewed as “Chicago employees” are physically present in the City of Chicago for work at least 80 hours in a 120-day period. If so, make sure they’re provided with the required PTO and Paid Sick Leave.
  • Update template separation letters to reflect new payment upon termination requirements.
  • Ensure your human resources team knows when and how PTO and Paid Sick Leave needs to be paid out.

LP’s Employment & Executive Compensation Group will host a webinar on the Chicago Paid Leave Ordinance on Thursday, May 2, 2024, from 11:00 am – 12:00 pm CDT. To register, click here.

Are Your Workers Independent Contractors or Employees: A New DOL Rule Aims to Help Employers Answer That Question

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Author Saman Haque

The U.S. Department of Labor’s (DOL) Wage and Hour Division updated its regulation concerning Employee or Independent Contractor Classification Under the Fair Labor Standard Act, with changes effective March 11, 2024. The revised rule finalizes the proposed rulemaking released in October 2022 with a goal ostensibly to remove confusion over whether a worker falls into the” employee” or “independent contractor” classification for wage and hour purposes. According to the DOL, the updated analysis for classifying “employee” and “independent contractor” seeks to be more consistent with judicial precedent and the Fair Labor Standard Act’s text and purpose.

The terms “worker,” “employee,” and “independent contractor” are often misinterpreted and inappropriately used interchangeably. Because classification as an “employee” provides certain protections, including minimum wage and overtime pay requirements, it is essential that employers make the correct classification. To help prevent misclassification, the DOL has created a resource page, including a helpful infographic, here: Misclassification of Employees as Independent Contractors Under the Fair Labor Standards Act | U.S. Department of Labor (dol.gov) 

What Is the New Rule the Department of Labor Is Adopting?

As of March 2024, the DOL has adopted the economic reality test to determine a worker’s correct classification for purposes of federal wage and hour laws. This test considers the following factors to assess whether a worker is economically dependent on the employer, or if, instead, they are in business for themselves:

  1. Opportunity for profit or loss depending on managerial skill
  2. Investments by the worker and the employer
  3. Degree of permanence of the work relationship
  4. Nature and degree of control
  5. Extent to which the work performed is an integral part of the employer’s business
  6. Skill and initiative

The updated rule does not use a “core factors” approach to the economic reality test; instead, it looks at the totality of the circumstances. No single factor is determinative, and each is considered in connection with the economic reality of the worker’s entire activity. Factors do not have a predetermined weight.

When determining whether a worker is an employee or independent contractor, the assessment’s focus is “the economic dependence” of the worker. In other words, as stated in the final rule, the “statutory language thus frames the central question that the economic reality test asks—whether the worker is economically dependent on an employer who suffers or permits the work or whether the worker is in business for themself.”

In its final rule, the DOL clarified that economic dependence focuses on whether the worker is in business for themselves and does not focus on the amount of money the worker earns or whether they have other sources of income.

How Does the New Rule Differ from the 2021 Independent Contractor Rule?

This new rule replaces and updates the guidance in the 2021 Independent Contactor Rule. In seeking to align with judicial precedent, the updated rule makes the following key changes:

  • Returns to a totality-of-the-circumstances economic reality test, with no single factor or group of factors having predetermined weight;
  • Looks to six factors (instead of five), including any investments made by the worker and the potential employer;
  • Provides an additional analysis of the control factor, with a detailed discussion of how scheduling, supervision, pricing, and the ability to work for others should be considered;
  • Returns to the DOL’s consideration of whether the work is integral to the employer’s business versus the work being exclusively part of an “integrated unit of production”;
  • Provides additional context to some factors; and
  • Removes a provision from the 2021 Independent Contractor Rule that had minimized the relevance of an employer’s reserved but unexercised rights to control a worker.

Legal Challenges and What Employers Should Do Now?

Unsurprisingly, after the DOL announced that the New Rule would go into effect March 11, 2024, the DOL was met with legal action challenging the new rule. Large organizations, small businesses, and even individuals have challenged the new rule, claiming it lacks predictability and negatively impacts several industries. It appears that for many, this new rule is not as clear cut as the DOL hoped and makes it more difficult to categorize workers as independent contractors. We will watch closely as the DOL responds to the nationwide claims challenging the new rule and how it will affect implementation.

Employers should review their census of employees and independent contractors in light of the updated analysis and ensure individuals are classified appropriately for purposes of wage and hour requirements, paying special attention to individuals classified as independent contractors. Employers also should keep in mind that workers classified as independent contractors must pass the test explained above under federal law as well as any tests that may be required by state laws.   

If you have questions about the proposed rule, independent contractor classification, or other labor and employment matter, do not hesitate to reach out to the Employment & Executive Compensation Group at Levenfeld Pearlstein.

For additional information on the updated rule, please see the DOL’s resource with FAQs: Frequently Asked Questions – Final Rule: Employee or Independent Contractor Classification Under the FLSA | U.S. Department of Labor (dol.gov)

EEOC Announces Its OutREACH Initiatives with a Focus on Employers’ Recruitment and Hiring Practices

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Author Saman Haque

The Equal Employment Opportunity Commission (EEOC) started the year off focused on getting to work. The EEOC released its Outreach Initiative on January 29, 2024, following its Strategic Enforcement Plan for Fiscal Years 2024 – 2028, which was released in September 2023. The Strategic Enforcement Plan focuses on the EEOC’s commitment to combating employment discrimination, promoting inclusive workplaces, and responding to the national call for racial and economic justice.

The EEOC’s Strategic Enforcement Plan is focused on employers’ recruitment and hiring practices. The EEOC has prioritized addressing “policies and practices that limit access to on-the-job training, pre-apprenticeship or apprenticeship programs, temp-to-hire positions, internships, or other job training or advancement opportunities based on protected status.”

The EEOC indicated that it will focus on recruitment and hiring practices that unlawfully discriminate through the following systems and practices:

  • Technology. This includes artificial intelligence and machine learning in job advertisements, recruiting, or making/assisting in hiring decisions where technology intentionally excludes or adversely impacts protected groups. The Equal Employment Opportunity Commission (EEOC) recently issued a technical assistance document on assessing adverse impacts when using AI, which built on previous guidance from the EEOC on AI and the Americans with Disabilities Act. You can read more here.
  • Job advertisements. The EEOC will focus on discrimination via job advertisements that exclude or discourage certain protected groups from applying for the open position.
  • Job isolation. This includes channeling, steering, or segregating individuals into specific jobs based on protected characteristics.
  • Training. The EEOC will focus on enforcing discrimination via policies and practices that limit access to on-the-job training, pre-apprenticeship or apprenticeship programs, temp-to-hire positions, internships, or other job training or advancement opportunities based on protected characteristics.
  • Temporary work. The EEOC will focus on policies and practices that “limit employees exclusively to temporary work on a basis prohibited by federal employment laws when permanent positions are available for which they are qualified.”
  • Application process. This includes relying on restrictive application processes or systems, including online systems that are difficult to access for individuals with disabilities or other protected groups.
  • Screening. The EEOC will focus on screening tools or requirements that disproportionately impact workers on a protected basis, including tools facilitated by artificial intelligence or other automated systems, pre-employment tests, and background checks.

Employers should be mindful of the practices that their Human Resources Departments use to process applications, how they advertise job openings, methods of providing internal growth opportunities to employees, and the parameters used to categorize employees as temporary employees instead of full- or part-time.

Accessibility continues to be a focus of the EEOC, and employers should be conscious of how user-friendly their applications are to those that are protected under the ADA.

The EEOC is also focused on the continued underrepresentation of women and workers of color in certain industries and sectors, such as construction and manufacturing, high tech, STEM, and finance. In launching its REACH initiative, the EEOC committed to outreach to vulnerable workers and underserved communications by:

  • Holding in-person and virtual listening sessions with a broad range of stakeholders in different areas around the country to examine how the EEOC can bolster its efforts to reach vulnerable and underserved communities by identifying existing barriers to reporting discrimination and soliciting recommendations on how to serve these populations better.
  • Reviewing and evaluating existing research and recommendations on effective outreach strategies, tools, and methods to inform the initiative’s work.
  • Identifying best practices for reaching vulnerable and underserved communities and considering how to develop an increased presence in rural areas and areas far from physical EEOC office locations.
  • Developing recommendations to present to the EEOC Chair for enhancing outreach efforts.

We will continue to monitor and stay abreast of developments related to EEOC enforcement initiatives as necessary. If you have any questions about the EEOC’s stated priorities, including using AI or algorithmic decision-making tools in your workplace, please don’t hesitate to reach out. 

2024 Employment Law Checklist

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Each year, LP’s Employment & Executive Compensation Practice Group is pleased to provide a short checklist of steps that all companies should consider taking to measure their readiness for the coming year. We hope you find our 2024 Employment Law Checklist a helpful guide to best practices for the year ahead.

Click here to download a PDF guide.

❒     Refresh, Recharge, and Revamp Paid Time Off and Sick Time Policies. Illinois jurisdictions have been very busy implementing new paid leave requirements. The Illinois Paid Leave for All Workers Act took effect January 1, 2024 and requires all Illinois employers to provide 40 hours of paid time off to use for “any reason,” and Cook County joined in with a new Ordinance setting out similar requirements. Pre-existing policies may meet the requirements under this law; however, employers should revise these policies to ensure they are inclusive of all the requirements under this law. The City of Chicago raised the bar even further by requiring 40 hours of paid leave and an additional 40 hours of paid sick leave for Chicago employees beginning July 1, 2024. Not surprisingly, Illinois is not alone in this activity. California, Colorado, and Minnesota (and a number of localities) have also updated their paid leave laws. Employers need to review their policies and applicable requirements to make sure that the amount of time provided, how it’s accrued, how it’s used, whether it carries over and how it’s handed on termination are both workable for the company and legally compliant.

❒      Revisit Bereavement Policies.  Under amendments to the Illinois Victims’ Economic Security and Safety Act (VESSA) and the Illinois Bereavement Law effective January 1, 2024, employees are permitted up to two weeks of unpaid, job-protected leave to attend a funeral, arrange a funeral, or grieve if a family or household member is killed in a crime of violence. Illinois also created a new requirement that employers with 250 or more employees offer 12 weeks of unpaid bereavement leave for the loss of a child due to suicide or homicide, while employers with 50-249 employees must provide six weeks of unpaid leave in those circumstances. It’s important that employers update their policies to reflect these new requirements and coordinate them with other paid leave offerings.

❒      Understand New Safety in the Workplace Requirements. California employers are now subject to the first proactive workplace violence prevention plan requirements in the US. Under the new requirements, employers must establish, implement, and maintain an effective, written Workplace Violence Prevention Plan, log information for every workplace violence incident, maintain up-to-date records, and meet training obligations, among other requirements. But it’s not just California employers who should take note. Amendments to the Illinois Gender Violence Act permit victims to sue employers whose employees or agents commit gender-related violence in the workplace if the violence arises “out of and in the course of employment with the employer.” To minimize liability, it’s important that employers conduct regular anti-harassment training (which should include that violence against employees is prohibited) and stay on top of allegations of harassment or violence in the workplace.

❒     Confirm Compliance with Pay Transparency and Equity Laws. Transparency in the workplace continues to be a legislative priority across the country. Beginning in 2025, Illinois employers with at least 15 employees will need to include the wage or salary range and a general description of benefits in job postings, so it’s important the HR and recruiting teams start thinking about how they will gather and provide this information. Also in Illinois, the deadline for employers with 100+ employees to submit for their Equal Pay Certification is March 23, 2024.  Covered employers that haven’t already submitted should move quickly to prepare this detailed, information-intensive application by the deadline. Employers with Colorado employees should also be aware of amendments to the Colorado Equal Pay for Equal Work Act which make some requirements more reasonable while creating new obligations around pay transparency.

❒     Revise Handbooks and Template Agreements that include Confidentiality or Non-Disparagement Provisions to Avoid Liability Under New Standards. A decision from the National Labor Relations Board in February 2023 means that employers need to ensure that standard employment covenants – such as confidentiality, non-disclosure and non-disparagement – cannot be read to limit non-supervisory employees’ right to make complaints or discuss them with fellow employees, former colleagues, unions, attorneys, the NLRB or others. This development is noteworthy because the language itself creates risk, even if it is never used.  It is critical that employers update employee handbooks and other employment-related documents to either include a clear statement that the provision does not limit employees’ exercise of protected rights. 

❒     Make Sure Temporary Employee Engagements Meet Strict New Standards. Both staffing firms and the companies that use their non-professional, non-clerical workers have new obligations under amendments to Illinois’ Day and Temporary Labor Services Act (“DTLSA”). Among other requirements, staffing companies are now required to provide long-term workers (those who are assigned to the same client for more than 90 days in a 12-month period) with pay and benefits not less than what is provided to the client’s lowest-paid directly-hired employees.  Companies using staffing company workers are required to confirm that the agency is registered with the Department of Labor at the time it enters into the contract and are required to provide staffing firms with the information necessary to meet the DTLSA’s compensation requirements. Staffing firms should already be aware of and complying with the DTLSA, but companies that use non-professional, non-clerical workers assigned by temporary companies need to make sure they understand and adhere to these new requirements.

❒     Ensure Independent Contractor Agreements Meet New Requirements. Effective July 1, 2024, companies that engage independent contractors or freelancers in Illinois will be required to have a written agreement with each independent contractor or freelancer that includes very specific information, including an itemization of the products and services to be provided and payment details. Companies that use independent contractors or freelancers need to review and revise contracts to make sure they include all required information and implement new agreements as necessary.

❒      Stay Abreast of New Limitations and Requirements around Restrictive Covenants – and Liability for Implementing Unenforceable Ones. On the national level, 2023 saw the NLRB taking the position that requiring a non-supervisory employees to sign a non-compete was an unfair labor practice (regardless of whether it was ever enforced) and the Federal Trade Commission issuing a proposed rule that would drastically limit non-competes (even in the sale of business context). While a bill in New York that would have prohibited all non-competes was ultimately vetoed, California took steps to give additional teeth to its prohibition on non-competes and customer non-solicits, amending the law to make clear that such provisions aren’t only void, they are also “unlawful,” and requiring employers to notify employees who signed any such provision about the new law by February 14, 2024.

If you found this checklist helpful, subscribe to LP3. If you have questions, do not hesitate to reach out to LP’s Employment & Executive Compensation Group.

Chicago City Council Delays Effective Date for New Paid Leave Requirements

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Author Saman Haque

On December 13, 2023, the Chicago City Council passed an amendment, extending the effective date of the Paid Leave and Paid Sick and Safe Leave Ordinance (“Paid Leave Ordinance”), which it had recently passed on November 9, 2023. In addition to extending the effective date from January 1, 2024 to July 1, 2024, the amended ordinance updated provisions regarding covered employees. Although the effective date has been delayed six months, employers should take steps now to ensure compliance.

Illinois employers outside of Chicago must comply with the Illinois Paid Leave for All Workers Act, which takes effect on January 1, 2024. The new Illinois law does not apply in Chicago or any other jurisdiction with an existing paid time off requirement. 

As described in our previous article, the new Paid Leave Ordinance allows employees to earn up to 35 hours of paid leave for any purpose in a 12-month period (“PTO”) and up to 40 hours of paid sick leave in a 12-month period “(Paid Sick Leave”). Under the Paid Leave Ordinance, employees will accrue both PTO and Paid Sick Leave at a rate of at least one hour for every 35 hours worked.

What happens between now and July 1, 2024?

PTO accrual for Paid Leave and Paid Sick Leave under the new ordinance will begin on July 1, 2024, instead of January 1, 2024. With a delayed effective date of the new ordinance, the current Chicago Sick Leave Ordinance accrual rate of one hour for every 40 hours worked remains effective through June 30, 2024. The Paid Leave Ordinance requires that employers allow employees to carry over up to 16 hours of PTO and up to 80 hours of Paid Sick Leave each year, but the amending ordinance delayed the carryover requirements for Paid Sick Leave to July 1, 2024.

Are the pay-out requirements delayed?

Yes, the Paid Leave Ordinance required medium employers (51-100 covered employees) to pay out up to 16 hours of PTO in 2024 and all accrued and unused PTO beginning in 2025. Most large employers (those with over 100 employees) must pay out accrued and unused paid leave upon termination (or if an employee leaves Chicago). The amending ordinance delayed the pay-out requirements to July 1, 2025.

Did the amending ordinance change the definition of “covered employee”?

Yes, the original ordinance included employees who work at least two hours in a two-week period for the employer while physically present in Chicago. The future amended ordinance changed the definition to include employees who work at least 80 hours in Chicago during a 120-day period. Once an employee meets that threshold, they are deemed a “covered employee” for the duration of their employment with that employer. The Paid Leave Ordinance continues to include domestic workers (regardless of whether they are employees or independent contractors).

Do any Paid Leave Ordinance requirements take effect before July 2024?

Under the Paid Leave Ordinance, employers must: (1) post a notice of the new requirements, (2) adopt a written policy explaining PTO and Paid Sick Leave rights and responsibilities and share the policy with employees when they are hired, and (3) provide employees with PTO and Paid Sick Leave accrual and use information each pay period. The amending ordinance requires that employers provide their employment policies to workers with regular work duties within the geographical boundaries of Chicago in the primary language of each worker. Employers must also give employees 14 days’ notice of any changes to employment policies.

How should Chicago employers prepare?

Chicago employers should take the following steps immediately to make sure that they comply:

  • Determine whether you will frontload or accrue for PTO and Paid Sick Leave (you can create one uniform policy to address both leaves or separate them depending on what best serves your business).
  • Review existing policies to ensure compliance with the new ordinance and clearly explain how PTO and Paid Sick Leave will be handled.
  • Make sure payroll systems are set up to track and document time off availability and usage properly.
  • Determine whether any remote employees are physically present in the City of Chicago for work at least 80 hours in a 120-day period, and if so, make sure they’re included in the new policy.
  • Update template separation letters to reflect new payment upon termination requirements and ensure your human resources team knows when and how time needs to paid out.

We will be continuing to monitor the City’s changes to the Paid Leave Ordinance. If you have any questions regarding Chicago’s new Paid Leave Ordinance or the Illinois Paid Leave for All Workers Act, please do not hesitate to reach out with any questions.