A Chicago city ordinance mandating 10 days of paid time off a year for workers took effect July 1 along with other new labor laws that aim to improve working conditions for Chicagoans.
Employees who work at least 80 hours within a 120-day period are guaranteed up to five days of paid vacation time and five days of paid sick time, with some rollover days. Previously, the city of Chicago mandated five days of sick leave.
The ordinance comes after Illinois enacted a law that took effect Jan. 1 that allows workers to earn up to 40 hours of paid leave a year. Chicago’s ordinance supersedes the state’s.
Chicago’s PTO ordinance started on the same day the city’s tipped minimum wage for workers such as restaurant servers and increased from $9.48 to $11.02 an hour. Chicago’s overall minimum wage also rose July 1 — from $15.80 per hour to $16.20 for employers with four or more workers.
“Over 60,000 service industry employees just got a raise, and over 1.38 million workers just doubled their paid time off,” Mayor Brandon Johnson said earlier this month. “We are making Chicago the most pro-worker city in the country while growing our local economy.”
Elena Bucio, a domestic worker and member of the Latino Union of Chicago, praised the ordinance last month at a panel hosted by the nonprofit Raise the Floor Alliance in the Loop.
“I’m both happy and sad because, when my girls were growing up, I remember missing graduations and going to work sick because I didn’t have paid leave,” Bucio said. “But I’m also very happy now because I can take my autistic child to the doctor.”
Katherine Anne Duncan, the owner of Katherine Anne Confections in Logan Square and Irving Park, said the new law is the “way we want to go as a society.”
“I really love the PTO ordinance for workers,” Duncan said. “Folks deserve PTO, sick pay, parental leave and so much more.”
But she added: “My concern is that this ordinance seems to be implemented without a plan as to how to get already-struggling businesses to cover not only the costs but the recordkeeping. A paper punch card will no longer work.”
The leaders of some business groups worry that business owners weren’t given enough time to prepare for the change, which carries hefty fines for failing to follow the law.
Tonya Trice, the executive director of the South Shore Chamber of Commerce, said business owners don’t think they were given enough time to understand and prepare for the new rules.
The Chicago City Council passed the ordinance last November. It initially was slated to go into effect in December but delayed until July 1 after pushback from business interests.
Ugo Okere, policy director of the organization Raise the Floor Alliance, said businesses already track sick days because of Chicago’s existing paid sick leave law and didn’t need a lawyer to adopt these changes. Raise the Floor Alliance was part of the coalition that pushed for the ordinance.
Okere said businesses can contact City Hall’s Office of Labor Standards with questions and also turn to the Illinois Restaurant Association, the Chicago Chamber of Commerce and the Illinois Hispanic Chamber of Commerce for help.
The city’s Department of Business Affairs and Consumer Protection has hosted eight webinars in English and Spanish for employers and workers on the new ordinance, put out multilingual fact sheets and public announcements and has responded to more than 600 questions from businesses and workers via phone and email, according to department spokesperson Elisa Sledzinksa.
Business owners are especially concerned about the heavy penalties, which range from $1,000 to $3,000 a day for each violation, said Elliot Richardson, president of the Small Business Advocacy Council.
That’s particularly so for smaller businesses that have fewer resources to quickly upgrade payroll, accounting and other systems — and may unintentionally violate the law as they get up to speed.
“It’s not that business owners don’t want to pay a fair wage,” Trice said. “Companies that are micro-businesses don’t have a lot of reserves.”
She recommends that business owners keep money on reserve in case they need to pay fines.
A search of city websites and fact sheets turned up few details about those penalties.
Business owners have questioned how the original version of the ordinance gave workers a right to immediately sue non-compliant employers. But, under the later-amended ordinance, workers can’t sue non-compliant employers until July 1, 2025, giving employers time to meet the new standards.
The ordinance also requires employers with 100 or more eligible workers to pay out unused time if an employee leaves the job. Companies with 51 to 100 workers get a phased-in approach — paying up to two days until July 1, 2025, then paying the full balance on and after July 1, 2025. Small businesses, employing 50 or fewer workers, are exempt from the payouts.
Sam Toia, president of the Illinois Restaurant Association, said Chicago’s PTO ordinance will add pressure to restaurants still facing challenges since the onset of the COVID-19 pandemic, including higher inflation. He said the state’s mandate of five days of paid leave was reasonable. New York City requires five to seven days, Los Angeles provides six days, and Washington, D.C., gives workers three to seven days of PTO.
“It’s going to add more cost to the bottom line,” Toia said. “This will make recovery even harder. I’m really concerned we could lose some ma-and-pa restaurants.”
Duncan said she supports the spirit of the ordinance. But she said her confectionery business is grappling with soaring costs for chocolate. Implementing the paid time off policy “puts a significant burden on small and startup businesses run by local people versus chains, especially in low-margin businesses like food, restaurants, cafes,” Duncan said. “I would love to see some sort of help given to the smaller businesses that don’t have a larger restaurant chain supporting them.”