Brief Summary: Starting January 1, 2024, employers with employees working in Illinois will be required to provide up to 40 hours of paid leave per year for any reason.
On January 10, 2023, the Illinois Legislature passed the “The Illinois Paid Leave for All Workers Act” (IL Paid Leave Act) requiring employers with employees in Illinois to provide up to 40 hours of paid leave for any reason. The IL Paid Leave Act bill was then sent to Governor Pritzker who expressed his strong support in a statement and is expected to sign the bill soon.
Illinois joins Maine and Nevada as the third state requiring employers to provide paid leave to employees for any reason (rather than just paid sick leave as currently required in a slew of states and local jurisdictions). Read on for more information.
Covered Employers
Employers subject to the IL Paid Leave Act include nearly all employers with one or more employees working in Illinois, except for certain school and park districts in Illinois subject to specific state regulations.
Further, employers subject to current local paid sick leave ordinances (such as the Cook County, Illinois and Chicago paid sick leave ordinances) are not required to comply with the IL Paid Leave Act requirements. Note that after January 1, 2024, any local paid leave ordinance enacted or amended must comply with the IL Paid Leave Act or provide greater protections to employees.
Covered Employees
Employees covered under the IL Paid Leave Act include mostly all employees working in Illinois with limited exceptions as noted below.
Employees covered under bona fide collective bargaining agreements (CBA) in effect after January 1, 2024 that clearly and unambiguously waive the IL Paid Leave Act requirements are exempt. Additionally, the following employees are also exempt from the IL Paid Leave Act requirements:
- Employees as defined under the federal Railroad Unemployment Insurance Act or the Railway Labor Act
- Temporary student-employees employed at their colleges and universities
- Certain short-term employees at higher education institutions
- Employees covered under a bona fide CBA working in the construction industry
- Employees covered under a bona fide CBA working for an employer providing national and international services of delivery, pickup, and transportation of parcels, documents, and freight.
Accrual of Paid Leave
Employees will accrue IL Paid Leave Act time at the rate of one hour for every 40 hours worked up to 40 hours of paid leave time during a 12-month period. Exempt employees are deemed to work 40 hours per week unless their regular workweek is less than 40 hours, in which case IL Paid Leave Act time accrues based on their regular workweek.
Employers may require employees to use IL Paid Leave Act leave in minimum increments of no less than two hours per day.
Employees will begin accruing paid leave under the IL Paid Leave Act on January 1, 2024 or upon their date of hire, if later. Employees may begin using their IL Paid Leave Act time 90 days after their date of hire. Employees hired before January 1, 2024 may begin using their accrued IL Paid Leave Act time on March 31, 2024.
Rate of Pay & Carryover Rules
Employees must be paid their regular hourly rate of pay when using their IL Paid Leave Act time. Employees who are typically paid gratuities and commissions must be paid the greater of their hourly rate or the full minimum wage for their jurisdiction.
Employees will carry over unused, accrued IL Paid Leave Act time annually up to a cap of 40 hours within the designated 12-month period. Employers may choose to frontload 40 hours of IL Paid Leave Act leave at the start of the 12-month period for employees, rather than carrying over unused IL Paid Leave Act time.
Termination of Employment & Rehires
Employers are not required to pay out accrued, unused IL Paid Leave Act time to employees upon termination of employment. If a terminated employee is rehired within 12 months by the same employer, previously accrued, unused IL Paid Leave Act time must be reinstated and available for use at the time of rehire.
Employers are advised to consult with their employment and labor law counsel to determine how these particular IL Paid Leave Act termination pay-out provisions interact with applicable state wage and hour laws in certain instances.
Notice Requirements
Employers may require employees to provide notice of their need to take IL Paid Leave Act time seven calendar days in advance when the need is foreseeable. If the need for paid leave is not foreseeable, then employers may require notice from employees as soon as practicable in accordance with the employer’s written paid leave notice policies.
Employers cannot require employees to provide a reason or documentation/certification for taking IL Paid Leave time. Employees using their IL Paid Leave Act time may take time for any reason, including, but not limited to, vacation, personal, family, and illness-related purposes.
Employers are prohibited from requiring employees to search for or find replacement workers to cover for them while taking IL Paid Leave time.
Existing Paid Leave Policies
Employers with existing paid leave policies providing at least 40 hours of paid leave that provides employees the option, at their discretion, to take paid leave for any reason will satisfy the IL Paid Leave Act requirements.
Posting & Recordkeeping Requirements
The Illinois Department of Labor (IL DOL) will prepare and publish an IL Paid Leave Act model notice that employers must post in a conspicuous place for employees to access as well as include in employee handbooks or other written policies, as applicable. If a significant portion of an employer’s workforce population cannot read or understand English, the employer may contact the IL DOL to request a notice in an appropriate language.
Employees are required to maintain IL Paid Leave Act records documenting hours worked, paid leave accrued and taken, and remaining paid leave balance for each covered employee for a period of three years and must provide these records to the IL DOL upon request.
Enforcement
The IL DOL is responsible for administration and enforcement of the IL Paid Leave Act. The IL DOL will conduct investigations and impose civil penalties against employers for violations along with other damages payable to the affected employees. Employees can file a complaint with the IL DOL within three years of an alleged violation.
Employers are prohibited from retaliating or taking any adverse action against employees for using or attempting to use their IL Paid Leave Act time.
Next Steps for Employers
As the January 1, 2024 effective date for the IL Paid Leave Act approaches, employers with employees working in Illinois are advised to consult with their employment and labor law counsel to create new or update existing paid leave policies and employee handbooks to comply with the Act’s requirements.
Risk Strategies is closely following this new Illinois paid leave development and will provide updates when available. Reach out to your Risk Strategies representative with questions or contact us at benefits@risk-strategies.com.
