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Business leaders reject current Chicago paid leave proposal

Labor groups will force Aldermen to vote on the most expensive and complicated form of paid leave in the country.
In the photo, Alberto Gonzalez, owner of 90 Miles Cuban Cafe.
CHICAGO – A coalition of business groups and small-business owners is urging the City Council to reject the Chicago paid leave proposal that would devastate businesses and nonprofits of every size and kind across the city.
Businesses understand that access to paid time off is crucial for workers and their families, which is why we reached an agreement earlier this year on the current statewide law of five days and made repeated efforts to negotiate in good faith to reach a compromise on a paid leave policy that is fair and balanced for both workers and businesses.
However, the proposal currently before the City Council — which would provide 15 days of paid leave — ignores the concerns of the business community. It will instead put in place the most expensive and complicated form of paid leave in the country.
The proposal is opposed by the Chicagoland Chamber of Commerce, Greater Englewood Chamber of Commerce, Hospitality Business Association of Chicago, Illinois Health and Hospitals Association, Illinois Hispanic Chamber of Commerce, Illinois Hotel & Lodging Association, Illinois Manufacturers’ Association, Illinois Restaurant Association, Illinois Retail Merchants Association, Little Village Chamber of Commerce, Pilsen Chamber of Commerce, and the Building Owners and Managers Association of Chicago.

Most expensive paid leave in the country

Jack Lavin, president of the Chicagoland Chamber of Commerce, said the guaranteed payout was one stumbling block — but not the only one — standing in the way of what he called “the most expensive, most expansive, most complicated paid leave in the country.”
The coalition proposed a compromise that offered the broadest paid leave policy of all major U.S. cities, doubling the amount of time off Illinois workers receive from five days to 10 days while limiting cost increases for businesses, providing businesses the ability to ensure continuity of operations, and limiting exposure against excessive liabilities for businesses. Organized labor groups rejected the compromise and instead insisted on implementing a policy that nearly triples the new, yet-to-be-implemented, state paid-time-off requirements and inflicts a tremendous financial burden on businesses across Chicago.
The proposal before the City Council also requires businesses to pay employees for days not taken, which is not required by the state of Illinois or other large cities like New York or Los Angeles. In addition, it does not include a small business exemption and, combined with the rushed implementation timeline, leaves businesses, especially small businesses without large human resources departments, vulnerable to the threat of significant penalties and lawsuits for minor infractions.
“No other city is at 10 days. They want to start it two months from now, and if you don’t comply, you can be sued. There’s no small-business exemption. And you’re setting them up to be sued,” Lavin said. “New York has five days. No payout. This is 10 days, double New York. L.A. has six days. No payout. No other major city has a payout. This is 40% higher than L.A,” he told the Sun-Times.

 “That is why we successfully reached an agreement”

For Chauncey Rice, associate vice president of government relations for the Illinois Retail Merchants Association, businesses know their strongest asset is their people and support by providing employees with paid leave.
“That is why we successfully reached an agreement on the state law of five days, which is considered a model of effectiveness and simplicity for the employee and employer. However, the proposal before the City Council will have an outsized impact on the businesses that anchor our neighborhoods,” Rice said “It’s because of policies like this that retailers of every type and size, including pharmacies, grocers, restaurants, and hardware stores, are increasingly unable to keep their doors open.”
According to the U.S. Bureau of Labor Statistics, the current cost of paid leave to Chicago employers is estimated at $31.7 billion, with minority-owned businesses bearing a significant share at $4.02 billion. Each additional mandated day of paid leave will cost Chicago employers an estimated $1.4 billion, with an additional $177 million burden for minority businesses. These figures do not include the additional cost to businesses to find last-minute replacements due to Chicago’s Fair Work Week regulations.
“My family is proud to have grown a food stand in Maxwell Street Market to a wholesale produce distribution company. But all the dedication, determination, persistence, and resourcefulness that helped us succeed is no match for bad policies that threaten the dreams of entrepreneurs in neighborhoods across Chicago,” said Yadira Enriquez, chief financial officer of Enriquez Produce. “I encourage the City Council to reject this proposal on behalf of those who know how important it is to create and grow jobs in our communities.”

More challenges

The proposal comes amid an onslaught of anti-business proposals recently passed or expected to be passed by the City Council, including restrictive scheduling and Fair Work Week regulations, the elimination of tip credits, and efforts to quadruple the real estate transfer tax. This is on top of continued supply chain and labor challenges, persistent crime, and skyrocketing property taxes that leave businesses across every neighborhood struggling to make ends meet.
“Margins in restaurants are notoriously small; it’s already exceedingly difficult to make ends meet because of soaring goods prices, rising property taxes, and the chaos caused to the dining industry by the pandemic,” said Sam Sanchez, CEO of Third Coast Hospitality. “This proposal, on top of the recent elimination of the tip credit, has me wondering how much more we can take.”
“While the business community does not support the current paid leave proposal, we do support and understand the need for balanced paid leave policies. What labor groups insist on presenting to the City Council goes too far too quickly and completely disregards the concerns of Chicago businesses, particularly small and minority businesses. Rather than striking a balance that works for workers and businesses, this proposal will hinder economic development and employment opportunities in the communities that need it most,” said Brad Tietz, vice president of government relations and strategy for the Chicagoland Chamber of Commerce.