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07 Jul

July 2021: Chicago Implements New Wage Theft Protections and Amends Paid Sick Leave with Ordinance

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Update Applicable to:
Employers in Chicago.

What happened?
On June 25, 2021, Chicago City Council passed Ordinance No. O201-2182 into law.

What are the details?
The ordinance, effective August 1, 2021, establishes wage theft protections for employees as well as, modifying and expanding several reasons that are covered for the use of Chicago Paid Sick Leave (CPSL).

An employer is now liable for wage theft when they fail to timely pay a covered employee. It includes non-payment of any wages required for work performed and paid time off (including Chicago paid sick leave (CPSL)) and any contractually required benefits.

The employers may be held liable for any underpayments and damages of either:

  • 2% of the amount of any underpayments for each month following the date of payment during which such underpayments remain unpaid; or
  • the amount specified by the Illinois Wage Payment and Collection Act, if the amount in the state law is greater.

Employers should be aware that these penalties are in addition to penalties for any failure to comply with the CPSL obligations as well.

The ordinance lists several new and modified reasons that are covered under the CPSL. Some of the included modified or new reasons are as follows:

  • Modified Reason. The employee is ill or injured, or for the purpose of receiving processional care, including preventive care, diagnosis, or treatment, for medical, mental, or behavioral issues, including substance abuse disorders.
  • Modified Reason. The employee needs to care for a family member whose school, class, or place of care has been closed
  • New Reason. An employee obeys an order issued by the mayor, the governor of Illinois, the Chicago Department of Public Health, or a treating healthcare provider, requiring the employee: to stay at home to minimize the transmission of a communicable disease, to remain at home while experiencing symptoms or sick with a communicable disease, to obey a quarantine order issued to the employee, or to obey an isolation order issued to the employee.

The CPSL ordinance requires a workplace posting and indicates the posting must also address the employee’s ability to seek remedy for wage theft. Employers are required to distribute a new notice to their employees by the end of July. With the first paycheck issued to a Covered Employee, and annually with a paycheck issued within 30 days of July 1st, every Employer shall provide a notice advising the Covered Employee of the current minimum Wages under this chapter, the Covered Employee’s right to Paid Sick Leave, and information about human trafficking and resources to help combat it. The Commissioner has prepared the required notice that can be found here.

The ordinance can be read here.

An article on the ordinance is found here.

What do employers need to do?
Employers should review the Ordinance and information above to ensure they follow the obligations to stay in compliance with wage payments and CPSL. The law firm, Littler Mendelson P.C., recommends employers revisit their paid sick leave policies in Chicago to ensure compliance with these new requirements. Employers will need to distribute the notice mentioned above by the end of the month to their employees.


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