Takeaways

  • Chicago’s updated rules (effective 06.01.26) clarify key aspects of its Paid Leave and Paid Sick and Safe Leave Ordinance, including compliance options, certification rules, and limits on sick leave use.
  • The updated rules expand and define permissible uses and confirm employers may use a combined PTO policy if it meets accrual, carryover, and other requirements.
  • They also address areas such as discipline for misuse and joint employer and successor liability.

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Chicago’s Paid Leave and Paid Sick and Safe Leave Ordinance requires employers to provide covered employees with up to 40 hours of Paid Leave that can be used for any reason and up to 40 hours of Paid Sick Leave annually. The City of Chicago’s updated Paid Leave and Paid Sick and Safe Leave Ordinance rules provide employers with important clarification effective June 1, 2026.

Childcare Closures

The Ordinance allows covered employees to take Paid Sick Leave when their child’s “place of care” has an unscheduled closure. The updated rules clarify that a “place of care” includes informal caretaking arrangements (e.g., home babysitters and family members who supervise children).

Combined Paid Leave and Paid Sick Leave Policies

The updated rules explicitly authorize employers to maintain a single bank of paid time off (PTO) in lieu of maintaining separate banks so long as the employer’s policy allows covered employees to accrue up to 80 hours of paid time off and meets all other Ordinance requirements.

The technical requirements of the Ordinance can make it difficult for employers to meet all obligations with a combined PTO policy.

Discipline for Abuse of Paid Sick Leave

When a covered employee takes Paid Sick Leave for reasons other than provided by the Ordinance, or otherwise abuses the use of Paid Sick Leave, the updated rules clarify that employers may take disciplinary action, up to and including termination, against the employee. Examples of abuse that may be subject to discipline include patterns of taking Paid Sick Leave:

  • Unscheduled, on or adjacent to weekends, holidays, vacation days;
  • On a day when a previous request to use a different type of leave was denied; and
  • To avoid performing duties perceived as undesirable

Employers should carefully evaluate the circumstances before taking disciplinary action against employees.

Joint Employment

The updated rules confirm that joint employers are both individually and jointly responsible for compliance with the Ordinance. Additionally, if an employee is jointly employed by more than one other employer, each employer must count that employee for the purposes of any coverage threshold defined in the Ordinance, such as for payout obligations upon separation of employment.

The updated rules define joint employment as “…when the essential terms and conditions of an [e]mployee’s work are controlled by two or more entities” and note that joint employment may occur when employers use temporary staffing agencies or professional employer organizations.

Employers should evaluate their business relationships with other entities that could be considered joint employers and consult with counsel.

Sale or Transfer of a Business

When employees are transferred to a successor employer after a merger or acquisition, the updated rules provide that employees must retain any accrued and unused Paid Leave and Paid Sick Leave. Failure to comply may result in liability for both the original and successor employer.

Employers should consider the interplay of this requirement with any Illinois Wage Payment and Collection Act obligations. Determining how to approach paid time off for transferred employees, for instance, can be especially complex.

Other Changes

The updated rules also provide that:

  • Employers may allow employees to use Paid Sick Leave for purposes the Ordinance does not provide.
  • For employees who are non-exempt under the Fair Labor Standards Act (FLSA), Paid Leave and Paid Sick Leave time is accrued based on all hours worked, including overtime hours. Exempt employees may accrue Paid Leave and Paid Sick Leave based on a maximum 40-hour work week. Employers are prohibited from requiring an employee using Paid Sick Leave to appear in person at a worksite or administrative office.

If you have any questions or need assistance, please contact a Jackson Lewis attorney.