Chicago Ends Pre-Suit Waiting Period for Paid Leave

Beginning July 1, 2026, the temporary pre-suit waiting period under Chicago’s Paid Leave and Paid Sick and Safe Leave Ordinance will sunset automatically, allowing covered employees to file private lawsuits for Paid Leave violations without first satisfying the statutory waiting requirement.

Under Chicago Municipal Code Section 6-130-100, the waiting period had temporarily required covered employees to wait until the next regular payday or 16 days after the alleged violation, whichever was shorter, before filing a private action for a Paid Leave claim.

This update applies to employers with one or more covered employees working in Chicago under the Paid Leave and Paid Sick and Safe Leave Ordinance and takes effect on July 1, 2026.

What Employers Need to Do

• Review Chicago paid leave policies to confirm that accrual, use, payment, and payout rules are applied correctly, as employees may file Paid Leave private actions without a pre-suit waiting period beginning July 1, 2026.

• Confirm payroll and leave administration practices are operating as intended, given the increased litigation exposure under the ordinance.

• Confirm required notices are posted and provided with the first paycheck and annually within 30 days of July 1.

• Review joint-employment, staffing agency, and Professional Employer Organization (PEO) arrangements, because the 2026 rules clarify that joint employers may share compliance responsibility.

Overview

What Changes on July 1, 2026

• The temporary pre-suit waiting period sunsets automatically, allowing covered employees to file Paid Leave private actions immediately — without waiting until the next regular payday or 16 days after the alleged violation.

Who is Covered

• The ordinance applies to employers with covered employees working in Chicago. A covered employee is an employee who works at least 80 hours for an employer within any 120-day period while physically present within Chicago. Once the employee meets that threshold, they remain covered for the rest of their employment with that employer.

Damages and Penalties

• Employees may recover three times the full amount of leave denied or lost, plus interest, costs, and reasonable attorney’s fees.
• City fines run between $1,000 and $3,000 per offense, with each day of a continuing violation treated as a separate offense.

Why This Matters

Chicago employers will face faster private litigation exposure for alleged Paid Leave violations beginning July 1, 2026.

The temporary waiting period gave employers a short window before a civil action could be filed; once it sunsets, employees may proceed immediately, and damages can reach three times the leave denied or lost plus interest, costs, and reasonable attorney’s fees.

Key Risks for Employers

• Faster Private Litigation Exposure: Employees may file Paid Leave private actions immediately, with no statutory waiting period.

• Damages Multiplier: Successful claims allow recovery of three times the leave denied or lost, plus interest, costs, and attorney’s fees.

• Continuing-violation Penalty Exposure: City fines run $1,000–$3,000 per offense, with each day of a continuing violation counting separately.

• Joint-employer Compliance Gaps: Staffing agency, PEO, and similar arrangements may face shared exposure under the 2026 joint-employer rules.

Source References

• Chicago Municipal Code Section 6-130-100 – Private Cause of Action
• Chicago Paid Leave and Paid Sick Leave Ordinance Goes into Effect (VensureHR)

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