Chicago Ordinances

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.

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.

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.

Chicago Passes Sweeping New Paid Leave Ordinance

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Author Laura Friedel

Chicago recently passed one of the most expansive paid time off laws in the country, with significant changes and severe penalties for violations. Passed by the Chicago City Council on November 9, 2023, the Paid Leave and Paid Sick and Safe Leave Ordinance (“Paid Leave Ordinance”) takes effect on December 31, 2023, and significantly amends the current paid leave requirements.

The new Paid Leave Ordinance allows employees to earn up to 40 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”). Additionally, employers that accrue the time off (rather than frontloading it) must carry time over from year to year, and employers with more than 50 employees are required to pay employees out for unused PTO on termination – even if they use a flexible time off model. The new ordinance also imposes strict penalties for violations.

Who is covered by the new ordinance?

The Paid Leave Ordinance applies to any employer with at least one employee, though the requirement to pay for unused PTO on termination only applies to employers with more than 50 employees. “Covered employees” include domestic workers (regardless of whether they are employees or independent contractors) and any employees who work at least two hours in a two-week period for the employer while physically present in Chicago. Accordingly, the law may apply to remote workers who are physically present for work in Chicago occasionally.

If an employer is subject to a collective bargaining agreement with more generous paid time off provisions, the collective bargaining agreement continues to apply.

How does the Paid Leave Ordinance impact accrual and frontloading systems?

If an employer uses an accrual system, as of January 1, 2024, its employees will need to accrue both PTO and Paid Sick Leave at a rate of at least one hour for each 35 hours worked. Employers may cap accruals at 40 hours for each kind of leave in a 12-month period. Employers that use 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 (unused time off above those thresholds can be forfeited. Employers that use an accrual system must adopt a policy that explains the accrual rate.

Employers also have the option of frontloading PTO and Paid Sick Leave but providing at least 40 hours of PTO and 40 hours of Paid Sick Leave at the beginning of each 12-month period. While employers who front load don’t need to allow carryover of PTO into the new year, they must allow carryover of up to 80 hours of unused Paid Sick Leave. The downside of frontloading is that employees who quit in early January would be entitled to payout for the full year’s allotment, but we expect many employers will still use this approach to avoid the carryover requirement for PTO.

It’s important to note that with the December 31st effective date, employers that are not frontloading PTO and Paid Sick Leave on January 1, 2024 will need to carryover remaining balances from 2023 into 2024.

When can employees begin using their PTO and Paid Sick Leave?

Employers can require that new employees wait 30 days before they can begin using their accrued Paid Sick Leave and 90 days before using PTO. 

Can employers impose any advance notice requirements?

Employers subject to the Paid Leave Ordinance can still require employees to provide up to seven days’ advance notice for the use of PTO. They can also require seven days’ advance notice for any Paid Sick Leave that is foreseeable. Additionally, employers may require preapproval, within reason, for the use of PTO and documentation for Paid Sick Leave of more than three consecutive days.

Do employers need to pay out unused PTO and Paid Sick Leave when employment is terminated?

Employers are not required to pay out unused Paid Sick Leave upon termination, resignation, retirement, or other employment separation.

The payout rules for unused PTO differ depending on the size of the employer. Small employers (50 or fewer employees) are not required to pay out unused PTO, but medium employers (51-100 employees) must pay out 16 hours of PTO in 2024 and all accrued and unused PTO beginning in 2025. Most large employers (those with more than 100 employees) must pay out accrued and unused paid leave upon termination (or if an employee leaves Chicago).

If a Chicago employer has “unlimited” or “flexible” paid time off, the Paid Leave Ordinance now requires that, at termination, they pay out at least 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 accurately track the use of paid time off by employees.

What notice requirements to employers have?

Employers must notify employees of the new law by doing the following:

  • Post a notice of employee rights in a conspicuous place at each facility and distribute the notice with the employee’s first paycheck (and annually in July after that).
  • Adopt a written policy explaining PTO and Paid Sick Leave rights and responsibilities and share the policy with employees when they are hired.
  • Provide employees with PTO and Paid Sick Leave accrual and use information each pay period.

Chicago employers must also maintain accurate records of each employee’s PTO and Paid Sick Leave use, among other information. The failure to keep these records creates a rebuttable presumption of a violation.

What are the penalties for violating the Paid Leave Ordinance?

Employers who violate the ordinance could face fines between $1,000-$3,000 for each offense, with each day of noncompliance deemed a separate offense. The penalties for notice violations are $500-$1,000 per violation.

Additionally, employees may pursue a private cause of action for violations, with possible damages of up to three times the amount of leave denied or lost, plus interest, costs, and attorney’s fees. However, private claims for PTO violations may not be brought until January beginning January 1, 2025. Employees can pursue private causes of action for Paid Sick Leave violations as soon as the ordinance takes effect on December 31.

How does the Paid Leave Ordinance align with the Illinois Paid Leave for All Workers Act?

Earlier this year, Illinois enacted the Illinois Paid Leave for All Workers Act, effective January 1, 2024. However, the new Illinois law does not apply in Chicago or in any other jurisdiction that had an existing paid time off requirement. 

What should Chicago employers do before the end of 2023?

Chicago employers should take the following steps immediately to make sure that they are in compliance by December 31st:

  • Determine whether you are going to frontload or accrue for PTO and Paid Sick Leave (you can treat them differently if you prefer) and if accruing, prepare for carryover from 2023 to 2024.
  • Review existing policies to ensure compliance with the new ordinance and clearly explain how PTO and Paid Sick Leave will be handled..
  • Make sure that their payroll systems are set up to properly track and document time off availability and usage.
  • Determine whether any remote employees are physically present in the City of Chicago for work at least two hours in a two-week period and, if so, make sure they’re included in the new policy.
  • Update template separation letters to reflect new payment on termination requirements and make sure team is aware that this needs to be paid out.

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.

Chicago Eliminates Subminimum Wages for Tipped Workers

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Author Laura Friedel

On Friday, October 6, 2023, the Chicago City Council approved the One Fair Wage ordinance, eliminating subminimum wages for tipped workers. The ordinance takes a phased approach to bringing tipped workers’ wages up to the full minimum wage by 2028. Currently, in Chicago the minimum wage for most workers is $15.80 per hour. The minimum wage for tipped workers will increase 8% starting July 1, 2024, and an additional 8% every year until 2028.

The final approved ordinance resulted from a compromise between city officials and the Illinois Restaurant Association, which ultimately agreed to the changes with the five-year phase-in period.

Currently, the subminimum wage for tipped workers in Chicago is $9.00-9.48 per hour plus tips. The Fair Labor Standards Act requires employers to pay tipped workers at least $2.13 per hour, but many states require a higher wage.

Chicago is the largest city to have eliminated subminimum wages for tipped workers. Last year, Washington, D.C. approved an initiative to eliminate subminimum wages by 2027, and several states – including California, Washington, Oregon, Nevada, Montana, Alaska, and Minnesota – require employers to pay workers full minimum wage, even if they receive tips.

LP’s Employment & Executive Compensation Group is available to answer any questions about the new ordinance or other employment matter.

Reminder: Chicago Employers Must Complete Annual Anti-Harassment Training Requirement by July 1st

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Author Becky Canary-King

The recently amended Chicago Human Rights Ordinance requires all Chicago employers to provide the following anti-harassment trainings on an annual basis:

  • One hour of sexual harassment prevention training for all employees
  • One additional hour of sexual harassment prevention training for supervisors and managers
  • One hour of bystander training for all employees

The amended ordinance took effect July 1, 2022, which means that Chicago employers must provide these trainings by July 1, 2023.

LP offers a training program that meets Chicago and Illinois requirements. Alternatively, employers can use Chicago’s template training materials.  If you would like to schedule a training, please reach out. A member of our Employment & Executive Compensation team would be happy to speak with you.

The Latest From Chicago: Anti-Retaliation, Fair Workweek, and Food Delivery Disclosures

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While warm weather has finally hit Chicago, Mayor Lightfoot, the City Council and Chicago Department of Business Affairs and Consumer Protection (BACP) have not taken a spring break. The below summarizes the latest ordinances, and regulations from the Windy City:

Anti-Retaliation Ordinance

The Chicago City Council passed the COVID-19 Anti-Retaliation Ordinance last week, which prohibits employers from retaliating against employees for obeying a public health order requiring an employee to stay home due to coronavirus.

The Ordinance prohibits employers from demoting or terminating a Covered Employee for obeying an order issued by the Mayor, the Governor of Illinois, the Chicago Department of Public Health, or, in the case of (2), (3), and (4) below, a treating healthcare provider, requiring the Covered Employee to:

  • Stay at home to minimize the transmission of COVID-19;
  • Remain at home while experiencing COVID-19 symptoms or sick with COVID-19;
  • Obey a quarantine order issued to the Covered Employee;
  • Obey an isolation order issued to the Covered Employee; and
  • Obey an order issued by the Commissioner of Health regarding the duties
  • of hospitals and other congregate facilities

Employees subject to demotion or termination may recover reinstatement, damages equal to three times the full amount of wages that would have been owed had the retaliatory action not taken place, actual damages, and attorneys’ fees. Violations may also lead to fines of up to $1,000 per offense per day.

The ordinance is effective immediately.

Fair Workweek Ordinance

Chicago’s Fair Workweek Ordinance is set to take effect on July 1, 2020. Ahead of the effective date, the BACP has issued rules for implementing the ordinance, and a supplemental rule for implementation during the pandemic.

The Ordinance requires covered employers to post work schedules at least 10 days in advance, and provide additional pay if work schedules are changed without advanced notice. However, the Ordinance creates an exception where the work schedule change is “because of” a pandemic. BACP’s supplemental rule clarifies that the COVID-19 outbreak qualifies as a “pandemic” for the purposes of this exception, and will remain a “pandemic” until the Mayor’s Executive Order declaring a state of emergency is repealed.    

However, a work schedule change will be considered “because” of the pandemic only when the pandemic causes the employer to materially change its operating hours, operating plan, or the goods or services provided by the employer, resulting in the work schedule change. Further, the exception applies only to the work schedule during which the change occurs, and the work schedule immediately following.

Additionally, while the substantive requirements of the Ordinance will still go into effect on July 1, 2020 and may still be enforced by the City, individual employees will not be allowed to file lawsuits for violations of the ordinance occurring before January 1, 2021.

New Rules for Third Party Food Delivery Companies

Mayor Lightfoot and the BACP announced new rules earlier this month for third-party food delivery companies to increase transparency and fair competition. Effective Friday, May 22nd, all third-party delivery companies must disclose the following to customers, in a “clear and conspicuous manner”:

  • the menu price of the food;
  • any sales or other tax applied to the transaction;
  • any delivery charge or service fee, imposed on or collected from the customer by the third-party food delivery service or by the covered establishment, in addition to the menu price of the food;
  • any tip that will be paid to the person delivering the food, and not to the third-party food delivery service, to be added into the transaction when it occurs, and
  • any commission associated with the transaction.

The disclosure requirements apply to all websites, mobile applications or other internet services that offer or arrange the sale of food or beverages by a restaurant, bar or other food-serving establishments. The measure is intended to promote transparency and fair competition, as many restaurants are increasing relying on third-party delivery services to stay afloat during the pandemic.

While the rules were promulgated in response to the pandemic, these new rules will be in place permanently.

Guidance for Restaurants Applying COVID Surcharges

The City of Chicago issued a guidance for restaurants charging COVID-related surcharges to customers, reminding restaurants that the City’s restaurant tax is .50%, and any surcharge customers are required to pay is considered taxable and should be included in the basis upon which the restaurant tax is calculated. Additionally, a COVID surcharge is not a tax and should not be designated as such on any price list or invoice.

Paid Sick Leave Coming in Q3

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We’re only a few days into Q2, but we wanted to make sure that you’re prepared for a significant legal change that is effective at the beginning of Q3.  Starting July 1st, employees who work in Cook County will have a right to paid sick leave under the Cook County Earned Sick Leave Ordinance, the Chicago Paid Sick Leave Ordinance or both. 

On their surface, the requirements of the Ordinances seem pretty straightforward, leaving many companies to believe that their current PTO or sick leave policy meets the new standards.  However, most of the policies we’ve reviewed to date don’t meet all of the new standards.  This is largely because the Ordinances:

  • Apply to all employees – including part-time employees – who work at least 80 hours in any 120 day period.
  • Allow the employee to carryover up to 20 hours of paid sick leave into the next year (up to 60 for employers that are covered by the FMLA).
  • Require that paid sick leave may be used not just for the employee or a family member’s illness or injury, but also to seek medical care or to care for a family member, in the event that the employee or a family member is the victim of domestic violence, or in the event that the workplace or the employee’s child’s school or place of care is closed due to a public health emergency.
  • Provide that an employer can’t require a note unless the employee is out for more than 3 consecutive days or more.
  • Put limitations on the notice employers can require from employees, including allowing employees to provide last minute notice by phone, email or text.

There are also a couple provisions in the Ordinances that help employers – including capping accrual at 40 hours per year, capping use at 40 or 60 hours per year (depending on the size of the employer and the reason for leave), and not requiring payout on termination.  However, to take advantage of these employer-friendly provisions, it’s important to reflect them in your policy. 

Both Ordinances provide that employees who don’t receive the paid sick time the Ordinances require can file suit and collect triple damages.  We expect Plaintiffs’ attorneys to be out in force looking for potential class actions, so it is important that every company that employs workers in Cook County have their policy reviewed in advance of the July 1st implementation deadline.  Because of the number of sick leave policies we’ve already seen, we are able to review current policies and prepare compliant policies efficiently, on a flat fee basis.

Labor & Employment Practice Group Leader Laura Friedel is available for questions about how these ordinances might affect your company’s policies.