The new Illinois Paid Leave for All Workers Act was signed into law in March by Governor J. B. Pritzker. The Act is the first statewide paid leave law in Illinois, and it mandates paid leave “for any reason” for employees. The Act will take effect on January 1, 2024.
Which Employers are required to comply?
According to the Act, all employers in Illinois, including state and local governments, must comply with the guidance with the exception of the following:
- Employers who provide paid leave, including sick leave, under a municipal and county ordinance in effect on January 1, 2024. Currently only Cook County and the City of Chicago have such ordinances.
- School districts organized under the School Code.
- Park districts organized under the Park Code.
Which employees does the Act not cover?
In addition to employees of the employers highlighted above, the Act does not cover:
- Employees under the federal Railroad Unemployment Insurance Act or the Railway Labor Act.
- College student employees that work part-time or on a temporary basis.
- Employees of an institution of higher learning that work for less than two consecutive quarters in a calendar year and do not expect to be rehired.
- Employees working in the construction industry, who are covered by a Collective Bargaining Agreement (CBA).
- Employees covered by a CBA that provide national and international delivery, pickup and transportation of parcels, documents, and freight.
Key Requirements of the Act
Accrual Methods: Under this method, covered employees will accrue one hour of paid leave for every 40 hours they work up to 40 hours per a 12-month period. For purposes of using the accrual method to calculate leave, exempt employees are considered 40-hour per week employees. Exempt employees working less will calculate leave accrual using their timesheet. Employers can also choose to provide 40 hours of paid leave to employees beginning on the first day of the 12-month period.
Minimum Paid Leave: The minimum paid leave states that Illinois employees are entitled to at least 40 hours of paid leave within a 12-month period. The 12-month period may be any consecutive period designated by the employer in writing at the time of hire.
Paid Leave for Any Reason: The new guidance permits employees to use paid leave from work for any reason without providing their employer supporting documentation for the leave. Employees can also choose to exhaust this leave before taking any other company-provided or state-mandated leave.
Carryover Rules: Under an accrual system, employees can carryover all unused paid leave from one 12-month period to the next – however, the new Act does not require an employer to provide employees more than 40 hours of leave per 12-month period.
Carryover from year-to-year is not required, and any unused leave can be forfeited at the end of the 12-month period.
Use of Leave: Employees can use their paid leave after completing 90 days of service or as of being employed on March 31, 2023. Employers are permitted to set a reasonable minimum increment of no less than two hours of employee leave per day.
Notice of Leave Need Requirements: Foreseeable leaves must be requested by employees at least seven days in advance. Leaves that are unforeseeable need to be requested as soon as possible.
Treatment of Paid Leave Upon Separation: The guidance states that employers are not required to pay out accrued but unused time at the time of employment separation. However, if an employee is rehired within 12 months from their initial termination, that previously accrued time must be reinstated and made available to them for use.
Posting/Notice Requirements: Employers must post the notice that will be provided by the Illinois Department of Labor in a conspicuous place on the employer’s premises and provide written notice to employees of the company’s paid leave policy complying with the Act. Employers with large non-English speaking employee populations will also need to provide these notices in the predominant language of their employee population.
No Retaliation: No adverse action may be taken against employees that are exercising their rights under the Act, opposing practices in violation of the Act, and supporting coworkers with exercising their rights under the Act.
The new requirements for Illinois will come as a major change for many employers. We recommend beginning to prepare your organizations for this change by working through an analysis of the compliance strategy of the business’s current paid leave policy, developing new policies that satisfy this mandate, and considering any additional expenses paid leave could add for the organization’s 2024 budget.
If you have any questions about how the Act will impact your business or would like to discuss steps to take to prepare for compliance with the Act, please reach out to us.