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Illinois Enacts Paid Leave

Illinois has passed the Paid Leave for All Workers Act, and Governor JB Pritzker has indicated that he will sign the bill. The law will take effect on January 1, 2024.

Covered Employers and Employees

All Illinois employers, except for certain school and park districts and employers covered by preexisting municipal or county ordinances that require paid leave will be required to provide up to 40 hours of annual paid leave to employees.  

Excluded from Leave

Employers are not required to provide paid leave for employees who are:

  • Temporary part-time student employees at colleges and universities;
  • Certain short-term workers employed at institutions of higher education;
  • Certain employees covered by collective bargaining agreements; and
  • Certain railroad workers.

Amount of Leave

Employees must be provided with a minimum of 40 hours of paid leave during a12-month period” which will accrue at the rate of one hour of paid leave for every 40 hours worked. Leave must begin to accrue immediately upon hire or the effective date of the law, whichever is later.

The “12-month period” may be any consecutive 12-month period designated by the employer in writing.

Employees may begin using their accrued paid leave after 90 days of employment or after 90 days of the effective date of the law, whichever is later.

Reasons for Leave

Unlike other state-mandated leaves which include specified reasons for leave, paid leave under this law may be taken for any reason of the employee’s choosing. Further, an employee may choose whether to use paid leave provided under this Act prior to using any other leave provided by the employer or state law.

Employees are not required to provide a reason for the leave and may not be required to provide documentation in support of the leave.

Increments of Use

Employees shall determine how much paid leave they need to use; however, employers may set a reasonable minimum increment for the use of paid leave not to exceed two hours per day.

Carryover of Paid Leave

Paid leave is required to be carried over annually; however, an employer may cap employee usage of leave to no more than 40 hours per year. There is an exception to the carryover requirement if an employer frontloads the 40 hours of paid leave.

Pay During Leave

Leave must be paid at the employee’s regular hourly rate. Employees engaged in an occupation that is paid by gratuities or commissions must be paid at least the full minimum wage in the jurisdiction in which they are employed when paid leave is taken.

Benefits During Leave

Employers must maintain group health plan benefits for the duration of the leave under the same terms and conditions had leave not been taken.

Employee Notice Requirements

Employers may require employees to provide up to seven calendar days’ notice before taking foreseeable leave. However, any notification policies must be in writing, and employers must make exceptions when an employee’s use of leave is not foreseeable, such as an emergency situation.

In addition, employees cannot be required to find coverage in order to use paid leave under the Act.

Accrued and Unused Leave at Separation

Employers are not required to payout any accrued but unused leave at separation of employment. However, if an employee is rehired within 12 months of separation by the same employer, previously accrued paid leave that had not been used by the employee shall be reinstated and employees would be entitled to use this leave immediately.

Additional Requirements

The law also includes recordkeeping requirements, notice and posting obligations and protections against retaliation. Employers that violate the Act may be liable for civil penalties up to $2,500 per offense, in addition to, back wages, compensatory damages, attorney fees and other costs.

Next Steps for Employers

Employers should review their existing leave policies and procedures and consider if any changes may be necessary to ensure alignment with the Act’s leave requirements. Employers that already provide at least the amount of paid leave required by the Act do not need to modify their policies, as long as the leave may be taken for any reason at the employee’s discretion. Of note, should an employer use an existing vacation or PTO policy to comply, payment for accrued but unused time must be paid out at separation consistent with Illinois’ Wage Payment and Collection Act and rules.

Prior to the effective date, employers should ensure that they are prepared to comply with law’s notice and recordkeeping requirements. In addition, as the law contains anti-retaliation provisions, it is recommended that supervisors/managers and those responsible for leave be trained on the organization’s obligations under this law.

HR Works will continue to monitor this topic and provide updated information as it becomes available.

HR Works, headquartered in Upstate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States for over thirty years. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.