Chicago Updates Labor Standards Poster for Paid Leave, Minimum Wage, and Worker Protections

What Changed

Chicago's Office of Labor Standards issued a revised mandatory labor standards poster to reflect several significant changes taking effect July 1, 2024:

• Minimum wage increase: Chicago's minimum wage rises to $16.20 per hour for all employers with four or more employees. The previous tiered structure distinguishing large and small employers has been eliminated — one rate now applies across the board.

• Paid Leave and Paid Sick and Safe Leave Ordinance: The Chicago City Council passed this ordinance on November 9, 2023, creating a new entitlement of up to five days of paid leave and five days of paid sick and safe leave annually for workers who work at least 80 hours in any 120-day period.

• Updated labor notices: Employers must display the revised poster and provide written notification to employees of their leave accrual and available balances with each paycheck.

The paid leave ordinance requires accrual at a rate of one hour of leave per 35 hours worked, up to 40 hours in a 12-month period for each leave type. Employees may begin using paid sick leave after 30 days of employment and paid leave after 90 days.

Who Is Affected

The minimum wage increase applies to all Chicago employers with four or more employees. The Paid Leave and Paid Sick and Safe Leave Ordinance applies to any employer with at least one employee who works at least 80 hours within any 120-day period in Chicago.

This covers full-time, part-time, and temporary employees performing work within Chicago city limits. Notably, the paid leave ordinance includes payout requirements that vary by employer size:

• Employers with 50 or fewer employees: Exempt from paying out accrued paid leave at separation

• Employers with 51-100 employees: Must pay out a maximum of 16 hours of accrued paid leave through July 1, 2025, after which full payout is required

• Employers with 100+ employees: Must pay out the full balance of accrued paid leave at separation

Where It Applies

City of Chicago only. These are municipal ordinances and do not apply to the broader Cook County or Illinois statewide. The requirements apply to employees who perform work within Chicago city limits, regardless of where the employer is headquartered.

Employers with employees in both Chicago and the surrounding suburbs should ensure they are applying the correct set of rules based on where each employee actually performs work.

When It Takes Effect

All changes take effect July 1, 2024:

• The $16.20/hour minimum wage applies to pay periods beginning on or after July 1

• The Paid Leave and Paid Sick and Safe Leave Ordinance accrual requirements begin July 1

• Updated labor standards posters must be displayed by July 1

• Employers must begin providing written leave balance notifications with each paycheck starting July 1

Why It Matters

Chicago's July 1, 2024 changes represent one of the most significant single-day rollouts of local employment law changes in recent years. The paid leave ordinance alone creates substantial new obligations: employers must track two separate leave banks (paid leave and paid sick leave), provide written balance notifications with every paycheck, and navigate a tiered payout structure based on employer size.

The elimination of the small/large employer minimum wage tiers also means that smaller Chicago businesses that previously benefited from a lower rate must now pay the full $16.20/hour.

Non-compliance with Chicago's labor standards ordinances can result in fines, penalties, and enforcement actions by the Office of Labor Standards.

The Humareso Take

This is a big one for anyone with employees in Chicago. The paid leave ordinance is genuinely complex — two separate leave types with different waiting periods, accrual tracking requirements, per-paycheck balance notifications, and a tiered payout structure that changes over time. If you are still running your Chicago leave policies the same way you were last year, you are almost certainly out of compliance. We strongly recommend sitting down with your Humareso team before July 1 to map out how your payroll and leave tracking systems will handle these new requirements. Getting this right on the front end is significantly easier than fixing it after an employee complaint.

Recommended Action Steps

1. Display the updated Chicago Labor Standards poster at all Chicago worksites in a conspicuous location accessible to employees, and provide a copy with each covered employee's first paycheck.

2. Update payroll systems to reflect the new $16.20/hour minimum wage for all employees working in Chicago, effective July 1, 2024.

3. Configure leave tracking to separately accrue and track paid leave and paid sick and safe leave at a rate of one hour per 35 hours worked, with appropriate caps of 40 hours per type per 12-month period.

4. Implement per-paycheck leave balance notifications showing each employee's current accrued and available paid leave and paid sick leave balances.

5. Review and update your employee handbook to include Chicago's new paid leave and paid sick and safe leave policy, including accrual rates, waiting periods, carryover rules (16 hours paid leave, 80 hours paid sick leave), and payout provisions.

6. Train managers and HR staff on the new leave types, including that employers cannot require employees to find replacement workers as a condition of taking leave.

7. Contact your Humareso representative to review your Chicago compliance posture and ensure your leave tracking, payroll, and posting obligations are fully aligned before July 1.