Illinois Joins the Fold and Adopts Paid Leave – What Employers Need to Know

Shortly after beginning his second term, Governor J.B. Pritzker signed the Paid Leave for All Workers Act (“PLAW”), adding Illinois to a still small but growing list of states which require employers to offer paid leave to their employees.  Beginning in January 2024, Illinois employers will be required to provide employees with 40 hours of paid leave per 12-month period which can be used for any reason, and with little notice and no documentation.  Importantly, however, employers who either: (a) have paid leave policies that satisfy the minimum amount of leave required by PLAW; or (b) are subject to a local ordinance requiring any type of paid leave, are not required to modify their policies.  Read on for what employers need to know at this time.

• Effective Date: January 1, 2024
• Covered Employers: All employers in Illinois except school districts and park districts.  However: 
• Employers who are covered by a municipal or county ordinance that, as of January 1, 2024 requires employers to provide paid leave – such as the Chicago Paid Sick Leave Ordinance and the Cook County Earned Sick Leave Ordinance – are NOT required to comply with the PLAW.
• Employers who provide any type of paid leave that satisfies the minimum amount of leave required by PLAW are not required to modify their existing policy so long as the paid leave policy allows employees to take paid leave for any reason.

Amount of Leave

Employees are entitled to earn and use up to a minimum of 40 hours of paid leave per 12-month period (which can be any 12-month period designated by the employer at the time of hire, such as a calendar year or a year that begins with the employee’s hire date).  Employers can either require accrual over time (and permit “carryover”) or can frontload the leave (and require “use it or lose it”):

• Accrual plus Carryover: Employees accrue 1 hour of paid leave for every 40 hours worked, up to 40 hours of paid leave during the designated 12-month period. Exempt employees generally earn 1 hour of paid leave per week. Employees must be permitted to “carryover” accrued but unused leave into the next 12-month period.  However, employers are not required to permit employees to use more than 40 hours of paid leave during any one 12-month period.  Employers must provide notice of the amount of leave accrued or used upon employee request.
• Front Load, Avoid Carryover, and Require “Use It or Lose It”: Employers may both avoid the carryover requirement and require employees to “use or lose” the 40 hours of paid leave during the 12-month period by making available the minimum number of hours of paid leave on the first day of employment / first day of the 12-month period. 

Using Paid Leave

• Waiting Period: Employees can be required to wait to use accrued paid leave until 90 days after beginning their employment.
• Increments of Leave: Employees can be required to use leave in reasonable minimum increments of no more than 2 hours per day.
• Reasons for Leave: Employees can use leave for any reason, and cannot be required to state the reason.
• Documentation: Employees cannot be required to provide documentation or certification as proof or in support of leave. 
• Order of Use: Employees may choose whether to use leave under PLAW prior to using any other leave provided by the employer or State law.
• Notice:
  • Foreseeable Leave: Employees can be required to provide 7 calendar days’ notice before leave is to begin.
  • Unforeseeable Leave: Employees can be required to provide notice as soon as is practicable after the employee is aware of the need for leave.
• Replacement: Employees cannot be required to find a replacement worker to cover the hours during which leave is taken.
• Amount of Pay: Employees are paid their hourly rate of pay for paid leave.

No Payout on Termination

Employers are not required to pay out unused PLAW paid leave to an employee upon termination unless PLAW paid leave is credited to an employee’s paid time off bank or employee vacation account, because earned but unused PTO/vacation leave is subject to pay out upon termination under the Illinois Wage Payment and Collection Act. Given this language, an employer may wish to track PLAW leave separately from leave under a vacation or PTO policy,  in order to reduce the risk that employees would be entitled to payout of unused PLAW leave upon termination of employment. The Illinois Department of Labor is expected to issue guidance and regulations before the January 1, 2024 implementation date, which may provide greater clarity on this issue.

Policy/Poster

Employers must provide a written policy that contains any notice requirements and procedures.  The IDOL will prepare a notice concerning PLAW which must be both posted in the workplace and included in any written manual/policy. 

Other Requirements:

• Record Keeping: Records of hours worked, paid leave accrued and taken, and the paid leave balance for each employee must be created and maintained for a period of at least 3 years, and available for IDOL inspection upon request.
• No Retaliation: Employers may not consider the use of paid leave by an employee as a negative factor in any employment action that involves evaluating, promoting, disciplining, or counting leave under a no-fault attendance policy.
• Penalties and Fines: An employer who violates PLAW can be fined a civil penalty of $500 for the first violation and $1,000 for any subsequent violation.

Next Steps For Employers: 

• Determine whether the PLAW applies to its workforce.
• Watch for regulations, FAQs, and the required “notice” (poster) from the IDOL.
• Compare current leave policies with the PLAW requirements. Consider adopting a paid leave policy that provides at least 40 hours of paid leave to be used for any reason, or modifying current policies to meet that requirement, ahead of the effective date of PLAW so as to potentially have more control over certain parameters of the policy, such as details relating to notice, documentation, increments of use, etc.
• Determine preferred approach on matters left to employers (e.g., definition of 12-month period; accrual vs. frontload; whether to require permitted notice before use and procedures for same) and prepare for tracking / record-keeping.
• Ensure compliance with any other applicable leave laws, e.g., Illinois Employee Sick Leave Act; Chicago Paid Sick Leave Ordinance; Cook County Earned Sick Leave Ordinance; Illinois Victims’ Economic Security and Safety Act(VESSA); Illinois Family Bereavement Leave Act; federal Family and Medical Leave Act.