Chicago employers should take a fresh look at their leave policies following updates to the City's Paid Leave and Paid Sick and Safe Leave Rules, which became effective June 1, 2026.
The revised rules provide additional guidance on employee leave rights and employer responsibilities. While the changes are not a complete overhaul of the law, they clarify several important areas that could affect your business.
Key Changes Employers Should Know
Combined PTO Policies Are Still Allowed
Employers may continue to use a single paid time off (PTO) bank instead of separate Paid Leave and Paid Sick Leave policies.
However, a combined PTO policy must still meet all requirements of the Chicago ordinance, including accrual, carryover, and usage rules. Employers should review existing policies to ensure they remain compliant.
Expanded Use of Sick Leave for Childcare Issues
Employees may use Paid Sick Leave when their child's place of care unexpectedly closes.
Importantly, a "place of care" is not limited to schools or daycare centers. It may also include informal childcare arrangements, such as babysitters or family members who regularly supervise a child.
Guidance on Leave Abuse
The updated rules confirm that employers may discipline employees who misuse Paid Sick Leave.
Potential warning signs may include repeated absences around weekends or holidays, absences after a leave request has been denied, or patterns suggesting leave is being used to avoid certain work assignments.
Before taking disciplinary action, employers should carefully evaluate the facts to avoid potential claims of unlawful retaliation.
New Considerations for Staffing and Business Transactions
The City also clarified that joint employers may share responsibility for compliance with the ordinance. This is particularly important for businesses that use staffing agencies or professional employer organizations (PEOs).
In addition, businesses involved in mergers, acquisitions, or asset sales should be aware that employees may retain accrued leave balances when transferring to a successor employer.
What Employers Should Do Now
To reduce compliance risks, employers should:
Review employee handbooks and leave policies.
Confirm PTO policies comply with Chicago's requirements.
Train managers and HR personnel on the updated rules.
Review procedures for handling leave-related attendance issues.
Evaluate relationships with staffing agencies and other workforce partners.
How Boodell & Domanskis Can Help
Employment laws continue to evolve at the state and local levels, creating significant compliance challenges for employers. Boodell & Domanskis advises businesses throughout Illinois on employment policies, workplace compliance, employee relations, and risk management strategies.
If you would like to discuss or receive more information on this content, please contact us. The attorneys at Boodell & Domanskis are available to answer your questions about any general issues concerning your business.
