Chicago and Cook County Paid Sick Leave Laws Go Into Effect July 1: Are You Ready?

As the holiday weekend approaches, many employers in Chicago and Cook County find themselves scrambling to prepare for the Chicago and Cook County Paid Sick Leave Ordinances that will take effect this Saturday, July 1, 2017. The Ordinances, though straightforward in their purpose of providing some limited sick paid time off to employees, raise a number of thorny, confusing questions and various administrative concerns for all employers. To add to this uncertainty, the City of Chicago only yesterday released its extensive final interpretative rules on the City’s Ordinance, which raise a number of interpretative questions and, in places, appear to diverge from the previously-issued final rules of the Cook County Commission on Human Rights on the County’s Ordinance. Not only that, the list of Cook County’s municipalities that are opting out from the County’s Ordinance has been changing, literally, by the hour. To help you get up to speed and make any final necessary changes, in this Alert we will review some key requirements and provide responses to some FAQs employers have been asking related to paid sick leave in Chicago and Cook County.

Paid Sick Leave Requirements

The Ordinances require employers in Chicago and certain municipalities in Cook County to provide all employees, regardless of full-time, part-time, seasonal, or temporary status, with one (1) hour of paid sick leave for every for 40 hours worked, up to a maximum accrual cap of 40 hours in any benefit year. Employees are entitled to begin using accrued paid sick leave following 180 days of employment, provided they have worked at least 80 hours in any 120 day period.

Employees must be allowed to use paid sick leave for any of the following reasons:

  • The employee is ill, injured, or requires medical care (including preventive care);

  • A member of the employee’s family is ill, injured, or requires medical care;

  • The employee or a member of his or her family, is the victim of domestic or sexual violence; or

  • The employee’s place of business, or the childcare facility or school of the employee’s child, has been closed by an order of a public official due to a public health emergency.

In addition to providing employees with paid sick leave, employers are required to inform employees about their rights to paid sick leave by posting the Chicago and Cook County notices in the workplace and distributing these notices to employees with their first paycheck following the Ordinances’ effective date, or with any new employee’s first paycheck.

Frequently Asked Questions

When updating their employment policies and/or practices, employers should be mindful of the following frequently asked questions:

Do the Ordinances apply to all employees working in Chicago and/or Cook County?

The Ordinances are broadly worded such that employers are required to provide paid sick leave to all employees working in the geographic boundaries of the City of Chicago and/or Cook County. However, the Cook County Ordinance permits municipalities in Cook County to opt out of the Ordinance prior to its effective date.

So far, more than half of the municipalities in Cook County have opted out of the Cook County Ordinance, meaning that employers are not required to provide paid sick leave to employees working in these locations. However, if an employee should change work locations, or travel for work, into a municipality that has not opted out of the Cook County Ordinance (such as the City of Chicago), the employee would be entitled to accrue paid sick leave for hours worked in that municipality.

Are employees able to carryover accrued paid sick leave?

The Ordinances permit employees to carryover half of their accrued unused paid sick leave, up to a cap of 20 hours, into the next benefit year. Employees working for employers covered by the Family Medical Leave Act (FMLA) may carryover up to an additional 40 hours of paid sick leave into the next benefit year, to be used exclusively for FMLA-specific purposes.

Nonetheless, in most instances, employers may cap the amount of paid sick leave that an employee can use in a benefit year at 40 hours. The exception to this rule being that employees who carryover and use all 40 hours of FMLA-specific paid sick leave may use an additional 20 hours of regular paid sick leave in any benefit year. Thus, in limited circumstances employees may be able to use as many as 60 hours of paid sick leave in a single benefit year.

Are employers permitted to front-load paid sick leave?

Both Ordinances permit employers to front-load paid sick leave at the start of the benefit year, or at the time of hire. Employers who front-load paid sick leave do not need to track paid sick leave accrual or permit the carryover of paid sick leave into the next benefit year, provided that the requisite amount of paid sick leave has been front-loaded. The precise amount of paid sick leave to be front-loaded may depend on whether the employer is subject to FMLA and/or based in Chicago or Cook County, as their respective rules address front-loading differently. Employers with questions regarding the precise amount of paid sick leave that must be provided to employees should contact counsel.

Are employers able to provide paid time off in lieu of paid sick leave?

Employers may provide employees with paid time off (PTO) instead of paid sick leave, provided that all their employees are provided at least as much PTO as the Ordinances require to be made available for paid sick leave use in a benefit year. Employers should note, however, that accrued unused PTO must be paid out upon termination of employment. There is no such requirement to pay out accrued unused paid sick leave.

Recommendations

In light of the impending effective date for Chicago’s and Cook County’s Paid Sick Leave Ordinances, it is important that employers take any remaining necessary steps to ensure that their paid sick leave policies and practices will comply with the Ordinances. Policies that do not provide the requisite benefits to employees, or those that are silent on key issues such as paid sick leave accrual and/or usage restrictions, will be construed against the employer and could lead to costly violations.

This post was written by Alexis M. Dominguez and Sonya Rosenberg  of Neal, Gerber & Eisenberg LLP.

Calculation of California Paid Sick Leave May Spook Employers

As if paid sick leave wasn’t scary enough!  From accrual methods, to the protections provided to the time off, to the varying (and ever growing) laws in different jurisdictions, paid sick leave can be spooky.  What about how to calculate the rate of pay for the paid sick leave??  On October 11, 2016, the California Department of Industrial Relations, Division of Labor Standards Enforcement (“DLSE”) issued an opinion letter regarding its interpretation under California’s Healthy Workplace Health Families Act of 2014 (the “California Paid Sick Leave Law”) of the method of calculation of paid sick leave for employees paid by commissions and exempt employees who are given an annual, non-discretionary bonus.

California paid sick leave, State SealAs discussed in our July 13, 2015 article, the California legislature amended the California Paid Sick Leave Law to address, amongst other topics, the calculation of the rate of pay for sick leave.  In the Amendment, the legislature provided the following clarification regarding calculation of the rate of pay of sick time:

  • Non-exempt employees. The Amendment required an employer to calculate paid sick time for non-exempt employees using one of the following methods: (1) calculate the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek; OR (2) divide the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.

  • Exempt employees. The Amendment required that paid sick time for “exempt employees” be calculated in the same manner as the employer calculates wages for other forms of paid leave time. This provision of the Amendment did not limit the categories of exempt employees which this calculation method applied to.

Now the DLSE has issued an opinion letter further interpreting these provisions.

How Should Employers Calculate Paid Sick Leave for Employees Only Receiving Commissions?

According to the DLSE’s opinion letter, employers must calculate paid sick leave payments for employees “who are almost entirely paid by commissions” as if they are non-exempt employees under the Amendment.  This opinion letter takes the position that only those employees exempt under one of the white collar exemptions (professional, executive, or administrative exemptions) may be paid their sick leave as an “exempt employee” under the Amendment.  The DLSE’s opinion letter maintains that employees classified as exempt under the outside or inside sales exemptions are not deemed to be “exempt” for purposes of the Amendment’s calculation of the rate of pay for sick leave.

How Should Employers Calculate Paid Sick Leave for Exempt Employees Who Receive an Annual Bonus?

The DLSE’s opinion letter then addressed how an employer calculates paid sick leave for an exempt employee under the white collar exemptions and who also receives a non-discretionary annual bonus at the end of each year.  The DLSE reasoned that a non-discretionary bonus does not figure into the salary of an exempt employee, and that under the Amendment, the employee would be paid an amount of pay equal to his or her regular salary for the sick day.

Jackson Lewis P.C. © 2016

Chicago Joins Growing Trend in Requiring Paid Sick Leave

paid sick leaveThe City of Chicago joined an emerging national trend when it unanimously passed an ordinance that requires employers to provide workers with paid sick days.

The change will go into effect on July 1, 2017, and expands benefits already provided under the Family Medical Leave Act (FMLA). The FMLA grants covered employees up to 12 weeks of unpaid time off to attend to the serious health condition of the employee or a covered family member. In contrast, the Chicago ordinance requires businesses to provide eligible employees one hour of paid sick leave for every 40 hours worked, up to 40 hours of total paid sick leave in each 12-month period.

The ordinance, which is technically an amendment to Chicago’s minimum wage law, covers all employees who perform at least two hours of work within the City in any two-week period and who work at least 80 hours during any 120-day period. The ordinance applies to all employers, regardless of the number of employees, that maintain a business facility within the geographic boundaries of the City or who are subject to one of the City’s licensing requirements. The law permits employees to carry up to 2.5 paid sick days over to the following year, but does not require employers to pay employees for unused sick days.

New employees will be eligible to use paid sick days after an initial six-month probationary period. Employers who already offer paid time off that satisfies the requirements of
the ordinance will not be required to provide additional benefits.

Under the ordinance, employees will be able to use paid sick leave for their own illnesses, injuries, medical care or preventative care, or for the illnesses, injuries, medical care or preventative care of covered family members. Pursuant to the law, “family members” is construed broadly to include a child, legal guardian, spouse, domestic partner, parent, the parent of a spouse or domestic partner, sibling, grandparent, grandchild or any other individual related by blood whose close association with the employee is the equivalent of a family relationship. Employees also can use paid sick leave if they or their family members are victims of domestic violence or if their place of business or child care facility has been closed due to a public health emergency.

In passing the amendment, Chicago has added another potential landmine in the already tough- to-navigate employer/employee relationship. The ordinance allows employers to require that employees who use paid sick leave for more than three consecutive days provide certification that the leave was for a qualifying purpose. However, the ordinance prohibits employers from inquiring as to the specific nature of the medical issue. As such, employers should tread carefully when addressing employees’ health issues and corresponding requests for time off.

Currently, four states have laws requiring employers to issue paid sick leave benefits. Connecticut passed the first such law in 2011, followed by Massachusetts and California in 2014 and Oregon in 2015. Likewise, roughly 20 cities across the country have enacted similar regulations, including San Francisco, Washington D.C., Seattle and Philadelphia.

© 2016 Wilson Elser

Chicago Adopts Paid Sick Leave Following Burgeoning National Trend

Chicago paid Sick leaveLate last month, the Chicago City Council unanimously approved a new paid sick leave ordinance requiring virtually every employer in the city to provide at least some paid time off to employees for sick leave purposes. Cook County’s Board of Commissioners is expected to approve a similar ordinance later this year. Chicago is not setting any trends by doing so — it is only the latest example of a nationwide trend to mandate that employers provide paid time off to employees to care for themselves or their families — a trend certain to continue and expand.

Although there is currently a patchwork of rules and regulations regarding paid sick leave across the country, Chicago’s ordinance is a fair representative of similar requirements in other states and municipalities. The ordinance, which will become effective on July 1, 2017, covers any employee based in and/or working inside Chicago’s city limits who works 80 or more hours within a 120-day period — essentially anyone taking home a paycheck on a regular basis. Employers must provide these workers the right to accrue and use up to five paid sick days (or 40 hours) per year, earned at a minimum rate of one hour for every 40 hours worked.

Further, workers must be allowed to roll over up to two and a half days (20 hours) of unused sick leave into the subsequent year — but employers can cap the total accrual amount at 40 hours, if they desire. Accrual of paid sick leave must begin on an employee’s first day of employment (or July 1, 2017, for existing employees — whichever is later), and accrual and use requirements are then measured from that date going forward. Employers may, however, restrict new employees’ use of paid sick leave until after they complete six full months of continuous employment.

Importantly, the Chicago ordinance does not require that employers create a separate paid sick leave scheme if they already maintain a general undifferentiated Paid Time Off (PTO) policy that meets or exceeds the required accrual rates. For example, if an employer maintains a PTO policy that provides accrual of PTO at a rate of two hours for every 40 hours worked, capping the total number of PTO days at 15, then the PTO policy exceeds the requirements. However, if PTO accrues at a rate slower than one hour for every 40 hours worked, the policy will need to be revised to meet the minimum requirements.

Sick leave may be used by employees to care for themselves or their families when they are sick, to receive medical care, including treatment, diagnosis, or preventive care, and if the employee or family member is the victim of domestic violence or sexual abuse. Employers must also give employees the ability to use their accrued sick time if the employer, or the employee’s children’s schools, are closed because of a public health emergency.

There are additional nuances to the law, some of which vary, depending on a particular workforce, including interplay with the Family and Medical Leave Act (FMLA) calculation of sick pay for tipped workers, and waiver of sick leave requirements in a collective bargaining agreement. Also, just as employers with PTO policies will want to ensure theirs is up to snuff in light of these new rules, employers without a PTO policy may want to consider adopting one to simplify their time-off benefit administration. As a result of these and other issues and trends across the country, employers should consult with counsel to ensure they are meeting or exceeding the minimum sick leave requirements in their places of work.

© 2016 Foley & Lardner LLP

UPDATE: San Diego’s Expansion of Minimum Wage and Paid Sick Leave

San Diego Earned Sick LeaveOn July 11, 2016, the San Diego Earned Sick Leave and Minimum Wage Ordinance became effective. As of the effective date, employers are required to pay employees who work at least two hours in a calendar week within the geographical boundaries of the City of San Diego a minimum wage of $10.50. Employers are also now required to provide employees one hour of paid sick leave for every 30 hours worked. The City also published the notices employers are required to post in the workplace regarding the new minimum wage and sick leave laws.

The San Diego City Council is currently in the process of considering an implementing ordinance for the Earned Sick Leave and Minimum Wage Ordinance. The implementing ordinance will, inter alia, designate an enforcement office, establish a system for receiving and adjudicating complaints, amend the remedy for violations and the accrual requirement for sick leave, and clarify the language of the Ordinance. If the implementing ordinance takes effect it will:

  • Allow employers to cap an employee’s total accrual of sick leave at 80 hours;

  • Allow employers to front load no less than 40 hours of sick leave to an employee at the beginning of each benefit year;

  • Clarify the enforcement process including a civil penalty cap for employers with no previous violations; and

  • Clarify language regarding the award of sick leave to be more consistent with State law.

Read the Implementing Ordinance.

Read about the noteworthy changes, including the minimum wage increase schedule.

View the required minimum wage and sick leave notices.

© 2010-2016 Allen Matkins Leck Gamble Mallory & Natsis LLP

Three California Municipalities Enact New Minimum Wage and Paid Sick Leave Laws

paid sick leave minimum wageThe trend toward local regulation of employment laws continues in California with three new local wage and hour enactments.

San Diego

On June 7, 2016, San Diego voters passed a ballot initiative containing two provisions for hourly workers. First, San Diego’s new minimum wage will be $10.50 per hour once the ballot results are confirmed, which is expected to be in mid-July.  Second, San Diego will have its own paid sick leave policy of five days (40 hours) – which is in excess of the state law that allows employers to limit use of accrued paid sick leave to three days (24 hours).

Like the state law, San Diego’s paid sick leave will accrue at one hour for every 30 hours worked and cannot be used until after 90 days of employment. Also like the state law, San Diego’s sick leave initiative allows accrued leave to be front loaded or accrued, and it must be carried over year to year.

The San Diego law differs from state law in that employees may accrue an unlimited amount, but employers may limit the amount an employee can use to 40 hours per year. Note that even if a business is not within San Diego city limits, if an employee performs at least two hours of work per week within San Diego, they accrue paid sick leave for the hours they work within the city. This will dramatically affect delivery drivers, caterers, construction workers, or any company with a mobile workforce.  (Note that in-home supportive services, workers employed under a publicly subsidized summer or short-term youth employment program, or any student employee, camp, or program counselor of an organized camp under State law are exempted.)  The new law adds the administrative burden of tracking not only how much each employee works, but also where they work.

Los Angeles

Beginning July 1, 2016, Los Angeles employers with at least 26 employees – and, on January 1, 2017, employers with fewer than 26 employees – must comply with two new laws.

First, Los Angeles employers must provide six days (48 hours) of paid sick leave per year. Like the San Diego law, even if a business is not within city limits, if an employee performs at least two hours of work per week within the city, they accrue paid sick leave for the hours they work within the city limits. Like the state law and the San Diego law, the new Los Angeles law requires that all employees receive this sick leave (or participate in an equally generous PTO plan), including part-time and temporary employees, who must accrue this benefit at the rate of one hour for every 30 hours worked, and they must be able to access it after 90 days of employment. Also like the state law, the benefit may be front loaded or accrued and carried over to the next year.

Second, the new minimum wage will be $10.50 an hour starting July 1, 2016.

Santa Monica

Starting January 1, 2017, Santa Monica employers with more than 50 employees must provide nine days (72 hours) of paid sick leave. The application, accrual, and carryover procedures are the same as the San Diego and Los Angeles laws.

What to Do

The increasing trend toward localized employment regulation makes for a challenging compliance environment. Now more than ever, employers should consult counsel to stay abreast of these new and rapidly-changing laws.

©1994-2016 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Paid Sick Days Required by Growing Number of Cities and States

Woman, Kleenex, SneezePaid sick leave laws are gaining traction across the nation and are not showing any signs of slowing down. As we recently reported, on September 7, 2015, President Obama signed an Executive Order requiring certain covered federal contractors and subcontractors to provide up to 56 hours of paid sick leave to an employee per year. Four states (California, Connecticut, Massachusetts and Oregon) have passed paid sick leave legislation, and more than 20 cities have passed comprehensive paid sick leave legislation, including:

  • CA: Emeryville, Oakland and San Francisco

  • MD: Montgomery County

  • NJ: Bloomfield, East Orange, Irvington, Jersey City, Monclair, Newark, Passaic, Paterson and Trenton

  • NY: New  York City

  • OR: Portland and Eugene (preempted by state law)

  • PA: Philadelphia and Pittsburgh

  • WA: Seattle and Tacoma

  • Washington, D.C.

Additional localities (e.g., Long Beach and Los Angeles, CA) have enacted paid sick leave ordinances to provide paid sick leave for employees working in certain industries, such as hotel workers. Some of these laws go into effect in 2016. However, most are already in effect, and covered employers must now comply.

For what reasons can employees use leave?

Though each varies, generally, these laws require employers to provide employees with paid leave to diagnose, care for or treat their own, or their family member’s illness, injury or condition, or for preventative medical care. Permissible uses are often broader than typical sick leave. Some laws also require employers to provide paid leave for domestic violence, stalking or sexual assaults. The local ordinance in Emeryville, CA, offers paid leave for care of service animals.

How much leave must employers provide?

Most of the jurisdictions allow employers to either provide a lump sum of leave up front each year or accrue one hour of paid sick leave per every 30 hours worked, but not all. Each law generally places a cap on usage and accrual. However, some jurisdictions such as Seattle, WA, offer much more generous caps on accrual.

What if we already provide paid leave (PTO or vacation) in excess of seven days per year? Do we need a separate sick pay policy, or can we incorporate it into PTO?

While it is possible to incorporate covered sick leave into a general PTO policy, employers must ensure that the PTO policy still meets the minimum requirements of the law(s), which is sometimes impractical. In most cases, employers will need to alter, for example, their accrual method, advance notice provisions, acceptable reasons for use and PTO carryover.

Which employees are eligible?

Employee eligibility requirements for paid sick leave tend to be minimal. For instance, many laws offer paid sick leave to not only regular full-time employees but also to part-time or temporary employees. Often times, an employer need not have a facility or office in the city or state to be covered. For instance, under California’s paid sick leave law, an employee need only work in California for 30 days per year to be eligible for paid sick time. This could mean that an employee who does not live in and/or is not based out of California may still be eligible for paid sick leave under California state law.

What other provisions do I need to consider?

In addition, the laws generally include anti-retaliation provisions, notice and posting requirements and recordkeeping obligations. Some laws, such as California’s, require employers to provide written notice of available paid sick time with each pay stub.

What should employers do?

Employers should first analyze whether their company is subject to any current or pending paid sick leave laws. Here are some initial questions to ask:

  • Does my company have a facility in any of the states/cities mentioned?

  • Does my company employ a sales force (or salesperson) or other employees in the city/state?

  • Do my company’s managers, salespersons, technicians or other employees travel for business in the city/state? If so, how frequently?

If employers determine their business may be covered under state and/or local paid sick leave law(s) listed above, they need to familiarize themselves with the specifics of those jurisdictions and implement the necessary changes to policies and practices. We are happy to assist in identifying coverage and implementing compliant changes.

© MICHAEL BEST & FRIEDRICH LLP