Colorado just made a major pivot on artificial intelligence regulation, and employers using AI tools in hiring, promotion, performance management, or other employment decisions should pay attention.

On May 14, 2026, Colorado Governor Jared Polis signed S.B. 26-189, which substantially rewrites Colorado’s earlier artificial intelligence law. The amended law delays the effective date to January 1, 2027 and significantly reduces several of the heavier employer obligations that were included in the original version.

In plain English: Colorado did not abandon AI regulation, but it did move away from the earlier, more burdensome framework. For employers, this is a welcome compliance breather. But it is not a free pass to let the robots run HR. Nobody wants ChatGPT with a badge and a termination letter.

Quick Refresher: What Did Colorado’s Original AI Law Do?

Colorado’s original law, S.B. 24-205, was one of the first broad state laws regulating high-risk artificial intelligence systems. It applied to AI systems used in consequential decisions, including employment, housing, education, financial services, insurance, healthcare, and government services.

For employers, the original law raised significant concern because it included obligations tied to “high-risk” AI tools used in employment decisions. These obligations included risk management policies, impact assessments, annual reviews, consumer notices, appeal rights, and measures to reduce algorithmic discrimination risk.

That original framework was scheduled to take effect in 2026, but Colorado lawmakers ultimately replaced it with a narrower approach.

What Changed Under the Amended Law?

The amended law moves away from the prior “high-risk artificial intelligence system” structure and instead focuses on automated decision-making technology, or ADMT, that is used to materially influence consequential decisions. Norton Rose Fulbright explains that the revised law removes the prior terminology around “high-risk artificial intelligence systems” and no longer uses the phrase “artificial intelligence” as the central trigger.

This is a big shift.

Rather than regulating AI broadly, the amended law focuses more specifically on technology that processes personal data to generate recommendations, rankings, or scores used to make decisions about individuals. Employment decisions are still included within the definition of consequential decisions, meaning employers are still in the zone if they use ADMT in hiring or other employment-related decisions.

Why Employers Should Care

Many employers already use technology in HR processes, sometimes without fully thinking of it as “AI.” Examples may include:

Applicant screening tools
Resume-ranking software
Automated interview scheduling or scoring tools
Video interview analytics
Skills assessments with automated recommendations
Internal promotion matching tools
Performance analytics platforms
Productivity or workforce management systems
Compensation recommendation tools

The amended Colorado law may be narrower, but employers should still ask a practical question: Are we using a tool that materially influences an employment decision?

If the answer is yes, the employer may have obligations under the new law once it takes effect.

The New Law Substantially Reduces Employer Burdens

The biggest employer-friendly development is that Colorado removed several of the most complex requirements from the original law.

The revised law eliminates the prior duty-of-care framework tied to algorithmic discrimination, as well as requirements for annual impact assessments and formal risk management programs.

Littler summarizes the revised employer obligations as being centered around three main actions: provide clear notice, create a structured adverse-action and human-review process, and retain relevant records for at least three years.

That is a much more focused compliance model than the original version.

For HR teams, this likely means less emphasis on building a full AI governance program from scratch and more emphasis on transparency, documentation, and human review when automated tools affect employment decisions.

Notice Will Still Matter

Under the amended law, deployers of covered ADMT must provide clear and conspicuous notice when the technology is or will be used in a consequential decision. The notice obligation can be satisfied through a prominent public notice that is reasonably accessible at points of consumer interaction.

For employers, this may mean reviewing where applicants and employees interact with AI-enabled tools.

For example, notice may be needed in:

Online job applications
Applicant tracking systems
Career pages
Assessment platforms
Employee portals
Internal mobility tools
Performance or promotion systems

The practical takeaway: if a person is interacting with a process where ADMT may materially influence an employment outcome, the employer should be thinking about whether the notice is clear, accessible, and understandable.

Adverse Decisions May Require Explanation and Human Review

The amended law gives individuals rights when a consequential decision results in an adverse outcome and covered ADMT materially influenced that decision. This may include a post-decision disclosure and an opportunity for meaningful human review.

In the employment context, this could matter when an applicant or employee is rejected, screened out, denied an opportunity, or otherwise negatively affected by an automated recommendation, ranking, or score.

Employers should prepare for questions like:

What role did the tool play in the decision?
Was the tool only one factor, or did it materially influence the outcome?
Can the applicant or employee understand the basis for the decision?
Is there a real human review process, or just a rubber stamp?
Who conducts the review?
How is the review documented?

The “human review” piece is especially important. A process is not meaningful if a human merely clicks approve without evaluating the facts. HR should be prepared to show that a real person reviewed the decision and had authority to change the outcome where appropriate.

Record Retention Is Still a Key Compliance Issue

Littler notes that the amended law requires retention of relevant records for at least three years.

That means employers should not treat AI-enabled employment decisions as a black box. If a tool materially influences a decision, the employer should be able to preserve enough information to explain what happened.

Relevant records may include:

The tool used
Vendor documentation
Notices provided
Decision criteria
Scores, rankings, or recommendations
Human review documentation
Adverse action explanations
Applicant or employee requests for review
Final decision records
Communications with the vendor

Employers should also check whether their vendors retain this information and whether the employer can access it when needed. A recordkeeping obligation is not very useful if the vendor says, “Oops, we don’t store that.” Very not cute.

Vendor Contracts Need a Fresh Look

The amended law imposes separate obligations on developers and deployers of covered ADMT. Developers may be required to provide deployers with documentation describing the system and material updates or modifications.

Employers are usually deployers when they use third-party HR technology. That means vendor contracts should be reviewed before January 1, 2027.

Employers should consider whether vendor agreements address:

What the tool does
Whether the tool is used in employment decisions
Whether it generates recommendations, rankings, or scores
What data the tool uses
How the vendor tests or evaluates the system
What documentation the vendor will provide
How material changes will be communicated
Who handles notices or disclosures
Whether the employer can access decision records
Indemnification or risk allocation

The law may be less burdensome than before, but employers still need cooperation from vendors to comply. HR, legal, IT, procurement, and compliance should all have a seat at this table.

This Is Not Just a Colorado Issue

Even though this is a Colorado law, employers outside Colorado should still pay attention. AI regulation is developing quickly across the country, and employment-related AI tools are a major focus for regulators, plaintiffs’ attorneys, and employee advocates.

Colorado’s rewrite may signal a broader trend toward more targeted AI rules focused on notice, transparency, human review, and recordkeeping rather than broad algorithmic governance programs. Seyfarth describes the revised Colorado law as a streamlined framework focused on transparency and disclosure.

That said, other jurisdictions may take different approaches. Employers with multi-state workforces should avoid building an AI compliance process based on only one state.

What Employers Should Do Now

Employers should use the delayed effective date as planning time, not procrastination time. January 1, 2027 may sound far away until someone asks who owns the AI inventory, and everyone suddenly finds a very important meeting to attend.

Start by inventorying HR technology. Identify any tools used in recruiting, hiring, promotion, performance management, workforce analytics, compensation, scheduling, discipline, or termination decisions.

Next, determine which tools may materially influence employment decisions. Not every automated tool will be covered, but employers need to understand how each tool is used.

Then review vendor contracts and documentation. Ask vendors whether their tools use ADMT, what documentation they provide, how they support disclosures, and what records are retained.

Employers should also draft or update applicant and employee notices, build a human review process for adverse outcomes, and create a recordkeeping protocol.

Finally, train HR, recruiters, and managers. A tool should support decision-making, not replace judgment. The people using the system need to understand its limits.

Bottom Line

Colorado’s amended AI law is a meaningful rollback from the original version, but it is not the end of AI compliance for employers.

The biggest employer takeaways are:

The effective date is now January 1, 2027.

The law now focuses on covered automated decision-making technology rather than the broader “high-risk AI” framework.

Employment decisions remain covered consequential decisions.

Many prior obligations, including annual impact assessments and formal risk management programs, have been removed.

Employers should still prepare for notice, adverse-action explanation, meaningful human review, and three-year record retention obligations.

Vendor contracts and HR technology inventories should be reviewed now.

The smart move is to treat this as a chance to build a practical AI governance foundation. Not oversized. Not scary. Just clear, documented, and human-centered. Because in HR, AI can help with the process, but accountability still belongs to the employer.

Connecticut employers have a major new compliance law to prepare for, and this one is not a tiny “update your poster and move on” situation. Public Act No. 26-12, signed by the governor on May 11, 2026, is a sweeping omnibus labor and employment law that changes multiple areas of Connecticut workplace compliance. Littler describes it as one of the most comprehensive overhauls of Connecticut workplace law in recent years.

The Act is broad. It touches pay transparency, wage statements, construction wage liability, service contract workers, healthcare employees, workers’ compensation, ADA notices, and lactation accommodations. So yes, Connecticut employers may need more than one cup of coffee for this one.

The Big Picture

Public Act 26-12 is more than 120 pages long and combines provisions from numerous individual bills introduced during the 2026 legislative session. While not every section applies to every employer, the law creates new obligations across several industries and employer types, including private employers, construction contractors, healthcare employers, service contractors, and employers with Connecticut-based supervisors, offices, or worksites.

The best way to approach this law is not to ask, “Does this whole thing apply to us?” Instead, employers should ask, “Which pieces apply to our workforce, our industry, our job postings, our payroll practices, and our contracts?”

That is where the real compliance work begins.

1. Pay Transparency Expands to All Employers

One of the most significant changes is Connecticut’s expanded job posting requirement.

Effective October 1, 2026, all employers, regardless of size, must include the position’s wage or wage range and a general description of benefits in both public and internal job postings. Benefits are defined broadly and include health insurance, retirement benefits, fringe benefits, paid leave, and other compensation offered with the position.

The Act also changes the definition of “wage range.” Instead of using a range the employer “anticipates relying on,” the law now refers to a range the employer “sets in good faith.” That wording matters because it suggests employers should be prepared to support the posted range with a reasonable, legitimate basis.

This requirement also reaches beyond traditional Connecticut job postings. Littler notes that the amended statute applies not only to jobs performed in Connecticut, but also to out-of-state positions that report to a Connecticut-based supervisor, office, or worksite.

That means employers should review remote and hybrid job postings carefully. A job may not be physically located in Connecticut, but it could still be pulled into the law if the reporting structure connects back to Connecticut.

2. Employment Promissory Note Restrictions Will Apply to All Employers

Connecticut already restricted certain employment promissory notes, including agreements requiring employees to repay amounts advanced for training, sign-on bonuses, or relocation expenses if they leave before working for a specified period. Historically, employers with 25 or fewer employees were exempt.

Beginning October 1, 2026, that small-employer exemption goes away. The restriction will apply to all employers, regardless of size.

This does not mean every repayment agreement is prohibited. Littler notes that the law does not prohibit voluntary agreements for repayment of amounts advanced by the employer.

Still, employers should review offer letters, training repayment agreements, sign-on bonus agreements, relocation agreements, and separation-related clawback language. Any provision that functions like a “stay or repay” arrangement should get a legal review before October 1.

3. Larger Employers Must Create a Pay Code Guide

Effective October 1, 2026, Connecticut employers with at least 100 employees must create a plain-language guide explaining pay codes used for overtime and commonly used pay differentials. Examples include shift differentials, on-call pay, hazard pay, callback pay, holiday or weekend pay, and geographic pay differentials.

If applicable, the guide must include at least 10 pay codes and must be updated when a new overtime or pay differential code is added. Employers must post the guide on their website in English, Spanish, and other commonly spoken languages of the workforce. The guide must also identify who handles employee questions or disputes about timekeeping and pay calculations.

Employees must receive access to the guide at hire, and employers must include a link on each record of hours worked provided to employees. Employers using a third-party payroll provider may be compliant if the provider supplies a guide that meets the statutory requirements.

This is one of those requirements that sounds simple until payroll, HRIS, legal, and communications all have to agree on what a “plain language” explanation looks like. Translation: start early.

4. Construction Contractors Face New Wage Liability

Construction employers should pay close attention to one of the Act’s biggest industry-specific changes.

For contracts entered into on or after January 1, 2027, general contractors may be jointly and severally liable for unpaid wages owed by subcontractors on construction, renovation, or rehabilitation projects in Connecticut. Before bringing a claim against the general contractor, the employee generally must provide 30 days’ notice describing the alleged violation, unless certain prior notice conditions apply.

General contractors may include subcontract language allowing unpaid wages to be satisfied from contract retainage. However, Littler notes that such language does not eliminate an employee’s right to bring a claim or waive the general contractor’s liability.

For general contractors, this is a major contract-management issue. It is no longer enough to assume the subcontractor is handling payroll correctly. GCs should consider stronger subcontractor vetting, payroll certification requirements, audit rights, indemnification language, retainage provisions, and procedures for responding to wage complaints.

5. Prevailing Wage Recordkeeping Gets More Detailed

Effective October 1, 2026, employers working on projects subject to Connecticut prevailing wage requirements must keep daily attendance records for mechanics, laborers, and other workers on covered job sites. These records must include the project name and location, date, each worker’s name, trade license number if applicable, and each worker’s arrival and departure times. Employers must submit the records weekly to the contracting agency.

Those records will be public records under the Freedom of Information Act, meaning they may be available for inspection or copying. Employers that fail to maintain and submit the records may face fines, imprisonment, or both.

Employers on public works projects should review their timekeeping process now. If daily attendance is currently tracked informally, this is the moment to tighten the system.

6. Service Contract Worker Retention Rules Are Coming

Beginning July 1, 2027, successor employers taking over certain service contracts at covered locations must retain covered service contract employees for at least 90 days. This may apply when an entity takes over a covered service contract, contracts out covered services, or receives property through a sale or transfer.

The law applies to employers with two or more employees operating in certain settings, including higher education facilities, large multifamily residential buildings, commercial buildings over 75,000 square feet, cultural centers, banks, shopping malls, warehouses, distribution centers, airports, and train stations.

The law includes notice requirements, written offer requirements, restrictions on termination during the 90-day retention period absent just cause, seniority rules when fewer workers are needed, preferential hiring list obligations, and post-retention performance evaluation requirements.

Employers involved in janitorial, security, maintenance, building services, warehouse, distribution, or similar service contracts should build this into contract transitions well before 2027. Waiting until the old contractor is walking out and the new contractor is walking in is how compliance gets spicy.

7. Healthcare and Education Workers Receive Expanded Workers’ Compensation Benefits After Assaults

The Act expands workers’ compensation protections for certain healthcare providers, teachers, and related employees who are unable to work because of a physical or negligent assault while performing their duties.

Covered employees may be entitled to benefits equal to 100% of their average weekly wage, without a cap, during periods of partial or total incapacity due to the assault. The Act also covers reasonably incurred medical and related expenses and lost wages tied to court appearances related to the assault. These absences cannot be charged against the employee’s PTO.

The covered healthcare definition is broad and includes employees and volunteers of certain healthcare facilities or institutions who have direct patient care or patient/family contact responsibilities. Covered education employees are also defined broadly.

One important practical issue: the statute does not define “physical or negligent assault,” which may create uncertainty about what situations trigger the enhanced benefits.

Healthcare and education employers should review workers’ compensation procedures, incident reporting, safety policies, PTO coding practices, and supervisor training.

8. ADA Notice Requirements Are Added

Effective October 1, 2026, the Connecticut Department of Labor must post English and Spanish information about the federal Americans with Disabilities Act on its website, including the definition of disability and reasonable accommodation obligations. Employers will be able to download the notice for workplace posting.

Employers must provide written notice of the right to reasonable accommodation to existing employees within 120 days of October 1, 2026, which makes the deadline January 29, 2027. After that, employers must provide the notice to new employees upon hire and within 10 days after an employee notifies the employer of a disability.

The trigger is important. As written, the law appears to require notice when an employee advises the employer of a disability, even if the employee has not requested an accommodation. Littler notes there may be future guidance on whether the obligation is triggered when a disability is readily observable but not communicated by the employee.

Employers should prepare a process for distributing the notice and documenting delivery. Managers should also be trained to alert HR when an employee mentions a disability, medical condition, or limitation that could trigger the notice requirement.

9. Lactation Accommodation Rights Expand

Connecticut previously required employers to make reasonable efforts to provide a private, sanitary location for employees to breastfeed or express milk during meal or break periods.

The new law expands that requirement by requiring employers to provide reasonable break times to breastfeed or express milk, not limited only to regular meal or break periods.

Employers should review lactation accommodation policies, break practices, scheduling expectations, and available private spaces. The key change is flexibility. Employers should not limit lactation breaks only to existing meal or rest periods if additional reasonable break time is needed.

What Employers Should Do Now

Connecticut employers should take a practical, staged approach.

First, identify which sections apply to your organization. A hospital, construction contractor, cannabis establishment, office building service contractor, and general private employer may each have very different obligations under the same Act.

Second, update job posting templates before October 1, 2026 to include good-faith wage ranges and benefits descriptions for both internal and external postings.

Third, review payroll and wage documents. Larger employers should begin developing the required pay code guide, including translations and website posting logistics.

Fourth, review repayment agreements and clawback provisions. Small employers that were previously exempt from Connecticut’s employment promissory note restriction should pay special attention.

Fifth, construction employers should update subcontract terms, wage compliance controls, daily attendance recordkeeping, and prevailing wage processes.

Sixth, healthcare and education employers should review workers’ compensation, assault response, PTO coding, incident reporting, and employee safety procedures.

Finally, prepare ADA and lactation accommodation updates. Notices, manager training, accommodation processes, and break policies should all be reviewed before the relevant effective dates.

Bottom Line

Public Act 26-12 is a major Connecticut employment law development. It is not one policy update. It is a multi-department compliance project.

The biggest employer takeaways are:

• Connecticut pay transparency expands to all employers on October 1, 2026.
• Employers with 100 or more employees must create a plain-language pay code guide.
• Construction general contractors may face liability for subcontractor wage violations on covered contracts beginning January 1, 2027.
• Prevailing wage projects will require detailed daily attendance records.
• Certain service contract successor employers must retain covered workers for 90 days beginning July 1, 2027.
• Healthcare and education employers face expanded workers’ compensation obligations for covered workplace assaults.
• Employers must prepare new ADA notice procedures and expanded lactation accommodation practices.

Connecticut employers should start now by mapping the law to their specific workforce and operations. This is one of those compliance changes where early planning is not just helpful. It is the whole game.

Chicago employers have another paid leave update to put on the radar. Because apparently, paid leave compliance wanted a little pre-summer glow-up.

The City of Chicago has finalized revised rules for its Paid Leave and Paid Sick and Safe Leave Ordinance, with the updated rules taking effect June 1, 2026. The changes do not completely overhaul the ordinance, but they do clarify several important areas that have caused practical questions for employers, especially around childcare-related absences, suspected misuse of sick leave, joint employer liability, successor liability, and combined PTO policies.

For employers with Chicago employees, this is a good time to review your policies, manager training, payroll practices, and vendor or staffing relationships before the effective date.

Quick Refresher: Chicago’s Paid Leave Structure

Chicago’s ordinance requires covered employers to provide both paid leave and paid sick and safe leave to eligible employees. The City’s guidance explains that employees generally accrue one hour of paid leave for every 35 hours worked, up to 40 hours in a 12-month period, and also accrue paid sick leave under the ordinance.

Paid leave may generally be used for any reason, while paid sick and safe leave is tied to specific qualifying reasons, such as illness, medical care, domestic violence or sex offense-related needs, public health closures, and certain family care responsibilities.

The revised rules are important because they help explain how those rights should be administered in real life. And real life, as HR knows, does not always fit neatly into a policy paragraph.

1. Childcare Disruptions May Qualify More Broadly Than Some Employers Expected

One of the most practical clarifications involves childcare.

Chicago’s ordinance allows paid sick and safe leave when an employee needs to care for a family member whose school, class, or place of care has been closed. The revised rules clarify that a “place of care” may include informal childcare arrangements, such as a babysitter, family member, or friend who provides care while the employee works. The rules also clarify that a closure can include an unexpected unavailability of that childcare provider.

This matters because some employers may have interpreted “closed” to mean only a formal school, daycare center, or childcare facility. Under the revised rules, the analysis is broader.

For example, if an employee’s regular babysitter becomes unexpectedly unavailable, or a family member who normally watches the employee’s child cannot provide care, the employee may be able to use paid sick and safe leave if the absence otherwise meets the ordinance requirements.

Employers should be careful not to deny leave simply because the childcare arrangement is informal. Many employees rely on grandparents, neighbors, friends, or rotating family care. The rules recognize that reality.

2. Employers May Address Patterned Misuse, But Documentation Matters

The revised rules also confirm that employers may discipline employees for misuse of paid sick leave, including suspicious patterns of use. Littler notes that the rules provide examples such as unscheduled sick leave around weekends, holidays, vacation days, paydays, previously denied leave days, or shifts the employee may view as undesirable.

This is helpful for employers because paid sick leave laws often create tension between two legitimate concerns:

Employees must be able to use protected leave without interference or retaliation.

Employers also need a way to address abuse when there is an objective, documented pattern.

The key word is pattern.

An isolated Friday absence should not automatically become a disciplinary issue. But if an employee repeatedly calls out using paid sick leave every Friday after a payday, or only on shifts they previously complained about, the employer may have a legitimate basis to review the situation.

The best practice is to train managers not to make emotional or inconsistent decisions. A supervisor saying, “She always does this,” is not enough. HR should look for actual records, dates, scheduling history, prior requests, call-in reasons, and whether similarly situated employees are treated consistently.

In other words: document the pattern, not the vibe.

3. Joint Employers Need to Pay Attention

The revised rules add clearer standards for joint employer liability. According to Littler, multiple entities may be responsible for compliance when they share control over the terms and conditions of employment, including arrangements involving staffing agencies, PEOs, and similar models. The rules also indicate that joint employers may be jointly and severally liable and that covered employees must be counted by each entity when determining employer size and coverage thresholds.

This is a big deal for employers using:

Staffing agencies
Temporary workers
PEOs
Shared worksites
Affiliated entities
Franchise or multi-entity operating models
Contract labor arrangements where control is shared

Employers should not assume that “the staffing agency handles that” is enough. If the company exercises control over scheduling, work conditions, discipline, supervision, or other terms of employment, it may have exposure under the ordinance.

Now is the time to review contracts with staffing agencies and PEOs. The agreement should clearly address which party is responsible for tracking hours, calculating accruals, providing notices, maintaining records, paying leave, and handling employee questions or complaints.

That said, a contract cannot always eliminate legal exposure. It can, however, reduce confusion and create a cleaner compliance process.

4. Successor Employers May Inherit Leave Obligations

The revised rules also clarify obligations in business transactions. Chicago’s ordinance already requires that employees retain accrued but unused leave after a sale, transfer, or assignment of the business when they continue working in Chicago. The revised rules go further by connecting failures to transfer or recognize leave balances to the ordinance’s broader requirement that employees have meaningful access to leave.

This means paid leave compliance should be part of due diligence in any transaction involving Chicago employees.

Buyers and successor employers should ask for:

Current paid leave and paid sick leave balances
Accrual records
Usage records
Policy documents
Payroll records
Employee counts
Prior complaints or disputes
Any special arrangements under PTO or sick leave policies

The seller and buyer should also clearly document how leave balances will transfer and how employees will be informed.

This is one of those areas where HR, payroll, legal, and finance all need to be in the same room, or at least the same very organized email thread.

5. Combined PTO Policies Are Still Allowed, But They Must Actually Comply

Many employers prefer to use one combined PTO bank instead of separate paid leave and paid sick leave banks. The revised rules confirm that combined PTO policies may still satisfy Chicago’s ordinance, but only if the policy meets all statutory requirements, including accrual, carryover, use, and other ordinance protections.

This is an important distinction.

A combined PTO policy is not automatically compliant just because it is generous. Employers must make sure the portion of PTO being used to satisfy Chicago’s paid leave and paid sick leave requirements follows Chicago’s rules.

For example, employers should review:

Accrual rates
Annual caps
Carryover rules
Waiting periods before use
Permissible reasons for use
Minimum use increments
Notice requirements
Documentation rules
Payout requirements, if applicable
Recordkeeping obligations

A policy that works in one state or city may not work in Chicago without adjustments.

What Employers Should Do Before June 1

Chicago employers should take a practical compliance pass before the revised rules take effect.

Start by reviewing your written paid leave, paid sick leave, and PTO policies. Make sure informal childcare disruptions are not being improperly excluded from covered sick and safe leave reasons.

Next, review attendance and discipline procedures. If your organization intends to address suspicious patterns of sick leave use, make sure HR is involved before discipline is issued and that managers are trained to avoid retaliation risk.

Employers using staffing agencies, PEOs, or shared employment structures should review contracts and internal processes. Confirm who tracks leave, who pays it, and who communicates rights to workers.

Organizations involved in acquisitions, transfers, reorganizations, or other business transactions should include Chicago leave balances in the due diligence process.

Finally, review payroll and HRIS settings. Paid leave compliance often fails not because the policy is wrong, but because the system is not calculating accruals, carryover, or balances correctly. Technology is wonderful until it quietly betrays your handbook.

Bottom Line

Chicago’s revised paid leave rules do not rewrite the entire ordinance, but they do sharpen expectations in several high-risk areas. The biggest employer takeaways are:

Childcare-related leave may apply to informal care disruptions.

Patterned misuse of paid sick leave may be addressed, but only with objective and consistent documentation.

Joint employers may share liability.

Successor employers must be careful with leave balance transfers.

Combined PTO policies remain permissible, but only if they meet Chicago’s specific requirements.

Employers with Chicago employees should use the June 1, 2026 effective date as a prompt to clean up policies, train managers, check systems, and review third-party workforce arrangements. Paid leave compliance is not just a handbook issue anymore. It is an operations, payroll, staffing, and risk-management issue all rolled into one.

Chicago employers covered by the city’s Fair Workweek Ordinance have another June 1 deadline to prepare for. The Chicago Office of Labor Standards has adopted updated rules implementing the ordinance, and those changes take effect June 1, 2026. The revisions do not create an entirely new law, but they do clarify several operational details employers need to get right, especially around scheduling notices, good-faith estimates, predictability pay, right-to-rest consent, access-to-hours rules, and recordkeeping.

In HR terms: this is not just a handbook update. This is a scheduling, payroll, timekeeping, and manager-training issue all wearing one compliance trench coat.

Quick Refresher: What Is Chicago’s Fair Workweek Ordinance?

Chicago’s Fair Workweek Ordinance is a predictive scheduling law. It generally applies to covered employers in certain industries, including building services, healthcare, hotels, manufacturing, restaurants, retail, and warehouse services. Covered employees are generally those who work primarily in Chicago, work in a covered industry, and earn at or below the city’s applicable wage threshold. The city’s ordinance also uses employer-size thresholds to determine coverage.

At a high level, the ordinance is designed to give covered employees more predictability in their schedules. Depending on the circumstances, covered employers may need to provide advance notice of work schedules, issue good-faith estimates, offer additional hours to existing employees before hiring new workers, pay predictability pay for certain schedule changes, and obtain consent when employees work shifts too close together.

1. “Week” Now Means Seven Consecutive 24-Hour Periods

One important clarification is the replacement of “calendar week” with “week.” Under the updated rules, a “week” means seven consecutive 24-hour periods and may begin on any day of the week and at any hour of the day. Littler notes that this definition is consistent with the Fair Labor Standards Act approach.

This matters because scheduling obligations often depend on measuring time correctly. Employers should confirm that their scheduling systems, payroll platforms, and internal policies are using the correct workweek structure.

For example, if your payroll week begins on Sunday at midnight but your scheduling system uses a different week, you may need to confirm whether that creates any compliance gaps. The issue is not just what the policy says. It is what the system actually does.

2. Employer Coverage Calculations Are Clarified

The updated rules also clarify how employer size should be calculated when determining whether the ordinance applies. Existing employers will look at the average number of global employees and covered employees during a 12-month period. New employers will use a 90-day period.

This is an important reminder that Chicago’s Fair Workweek coverage analysis is not limited to the number of employees physically working inside Chicago. The ordinance can consider global employee counts, and employers with multi-location or multi-state operations should not assume they are too small based only on their Chicago headcount.

For restaurants and employers operating through affiliated entities, franchises, or multiple locations, this calculation should be reviewed carefully. One location may feel “small,” but the legal coverage analysis may tell a different story.

3. Work Schedules Must Be Time-Stamped

The revised rules require posted work schedules to include the date and time of posting.

That may sound minor, but it is a big practical point. If there is a dispute later about whether the employer provided timely notice, the timestamp may become key evidence.

Employers should review how schedules are posted and distributed. This may include physical postings, scheduling apps, employee portals, text/email notifications, or other electronic systems. The process should show not only what schedule was posted, but when it was posted and how employees received access to it.

A screenshot floating around a manager’s phone is probably not the compliance strategy we’re looking for here.

4. Good-Faith Estimates Need More Detail

The updated rules add requirements for good-faith estimates. Employers must include the date the estimate was provided to the covered employee and indicate whether the employee is expected to work any on-call shifts.

Good-faith estimates are often treated as a basic onboarding form, but they deserve more attention. These estimates help employees understand what their work schedule is expected to look like. If the estimate is vague, incomplete, or missing on-call expectations, the employer may have a compliance problem before the employee even works the first shift.

Employers should update templates for new hires and employees moving into covered positions. HR should also make sure managers understand that a good-faith estimate is not a casual guess. It should reflect a reasonable expectation based on available information.

5. Tipped and Dual-Role Work Must Be Tracked

The updated rules require employers to record whether a covered employee receives tips or performs duties in both tipped and non-tipped positions.

This is especially important for restaurants, hospitality, and other employers where employees may shift between roles. For example, an employee might work as a server on one shift and perform non-tipped duties on another. The employer’s records need to reflect those distinctions.

This change also reinforces a broader wage-and-hour reality: if employees work in different roles, at different rates, or under different pay structures, the employer needs clean records. “Everybody knows how we do it” is not a recordkeeping system. Cute, but no.

6. Short-Notice Schedules Are Clarified for Certain Transitions

The revised rules address situations involving new employees, employees returning from leave, and employees who are transferred, promoted, or assigned to a new job classification.

For new covered employees at hire, or existing covered employees returning from leave, the employer may provide a written work schedule with less than 14 days’ notice that runs through the last date of the currently posted work schedule. The same concept applies when existing covered employees are transferred, promoted, or assigned to a new job classification.

This is a helpful clarification for real-world operations. Employers do not always onboard, return, transfer, or promote employees exactly 14 days before a schedule cycle begins. The updated rule gives employers a clearer path for handling these transitions.

That said, employers should still document the reason for the shorter schedule notice and make sure the schedule only runs through the last date of the currently posted schedule.

7. Predictability Pay Rules Get More Specific

The revised rules clarify how predictability pay interacts with the regular rate of pay. For predictability pay purposes, the regular rate does not include overtime, holiday pay, or other premium rates. However, certain differentials, such as shift differentials for weekends or nights, are not treated as excluded premiums if they compensate the employee for working under different conditions.

The rules also clarify that predictability pay is not treated as another hour worked and does not affect accrual of paid leave or paid sick leave.

This is a payroll-system issue. Employers should not assume their current payroll configuration already handles this correctly. If predictability pay is being calculated, coded, or included incorrectly, the error may ripple into regular rate calculations, leave accruals, reporting, and paystub accuracy.

Covered employers should contact payroll vendors now and ask specifically how predictability pay is calculated and whether the system distinguishes between excluded premiums and included differentials.

8. Access-to-Hours Rules Are Clarified

Chicago’s ordinance includes an access-to-hours requirement, which generally requires covered employers to offer additional available shifts to covered employees before hiring new employees in certain situations.

The updated rules clarify two points. First, predictability pay is not required for shifts accepted through the access-to-hours process. Second, the access-to-hours requirement does not apply to hiring new covered employees at a new location within the city.

This matters for employers opening new Chicago locations or trying to staff additional hours. Operations teams should understand when the access-to-hours process applies and when it does not. Otherwise, employers may either overpay unnecessarily or, more concerning, skip a required process.

9. Right-to-Rest Consent Can Be Ongoing, But Must Be Revocable

The revised rules address the “right to rest” requirement. Under the ordinance, employees have protections when scheduled to work a shift that begins less than 10 hours after the end of the previous day’s shift. The updated rules clarify that written, voluntary consent may be situational or ongoing, as long as the employee can revoke consent at any time.

This gives employers some flexibility, but the consent must still be real, voluntary, written, and revocable.

Employers should review any right-to-rest consent forms to ensure they do not imply that consent is permanent or required as a condition of continued employment. A best practice is to include a clear revocation process and train managers not to pressure employees into consenting.

10. Recordkeeping Requirements Are Expanded

The updated rules add several recordkeeping expectations. Employers must maintain and produce records to the city upon request, including written consent for short-rest shifts, written consent to schedule changes, documentation showing compliance with schedule posting requirements, documents showing compliance with initial estimates and advance notice requirements, access-to-hours records, right-to-rest records, flexible work arrangement request records, and handbooks or manuals covering these policies.

This may be the most important practical takeaway.

A compliant policy is only step one. Employers also need records proving they followed the policy.

Managers should not be handling schedule changes through informal side conversations without documentation. If an employee agrees to a change, accepts additional hours, or consents to a short-rest shift, the employer needs a reliable way to capture and retain that information.

What Employers Should Do Before June 1

Covered Chicago employers should use the June 1, 2026 effective date as a prompt to conduct a focused compliance review.

Start by confirming whether the ordinance applies to your organization based on industry, employee count, covered employee count, location, and wage thresholds. Do not rely on last year’s analysis without checking current operations.

Next, review your scheduling system. Confirm that schedules are posted at least 14 days in advance when required, that posted schedules are time-stamped, and that managers understand how to document changes.

Update good-faith estimate templates to include the date provided and whether on-call shifts are expected.

Review payroll settings for predictability pay, regular rate treatment, shift differentials, and leave accrual impact.

Update right-to-rest consent forms and make sure employees can revoke ongoing consent.

Review access-to-hours procedures, especially for employers adding shifts or opening new locations.

Finally, train managers. Most Fair Workweek violations do not begin in the legal department. They begin when a supervisor makes a “quick schedule tweak” without realizing that tweak has legal consequences.

Bottom Line

Chicago’s updated Fair Workweek rules are technical, but they are not theoretical. They affect how schedules are created, posted, changed, documented, paid, and retained.

The biggest employer takeaways are:

Covered employers should review coverage calculations.

Schedules need reliable date-and-time posting records.

Good-faith estimates need additional detail.

Payroll systems must properly calculate predictability pay.

Right-to-rest consent must be written, voluntary, and revocable.

Access-to-hours procedures need to be clearly understood.

Recordkeeping must be strong enough to prove compliance.

For Chicago employers, June 1, 2026 is more than a policy deadline. It is an operations deadline. The employers in the best position will be the ones who align HR, payroll, scheduling managers, and vendors before the rule changes take effect.