Illinois Passes Paid Leave for Any Reason – Effective January 1, 2024
Illinois became only the third state to require that employers provide paid leave to its employees for any reason. The new law goes into effect on January 1, 2024, and it impacts nearly every employer and employee in the state of Illinois.
Covered Employees and Employers
The new “Paid Leave for All Workers Act” (the Act) includes a broad definition of employee and employer under the Illinois Wage Payment and Collection Act and excludes only a small set of employers including:
- Employees under the federal Railroad Unemployment Insurance Act
- Temporary college student-employees
- Short-term employees at a higher learning institution
- Employees in the construction industry subject to a Collective Bargaining Agreement (CBA)
- Employees covered by a bona fide CBA in the business of delivery and pickup of freight and similar items.
- A CBA may waive the obligations of the Act, but only upon an explicit waiver of clear and unambiguous terms.
Accrual, Carryover, Frontloading
- Under the Act, employees are eligible to accrue and use a minimum of 40 hours of paid leave during a 12-month period (determined by the employer).
- Non-exempt employees are eligible to earn 1 hour of paid sick leave for every 40 hours of work.
- Exempt employees will be deemed to work 40 hours per week for purposes of accruing paid leave unless the employee typically works less than 40 hours in a work week.
- Accrual of leave will begin at the commencement of employment, but an employer may require an employee to work for at least 90 days before the leave can be used.
- Employers may frontload the 40 hours of paid leave at the beginning of the 12-month period (or pro-rata for partial years). If an employer frontloads the leave, then the employee is not eligible to carry over any leave to the subsequent 12-month period.
- If an employee earns paid leave based on hours worked, then the employee may carry over as many as 40 hours to the subsequent year. However, the Act does not “require an employer to provide more than 40 hours of paid leave for an employee in the 12-month period.”
Use and Reason for Leave
The Act provides that “Paid leave under this Act may be taken by an employee for any reason of the employee’s choosing.” This means an employee is not required to provide any documentation to support any leave taken. The Act also allows an employee to use their paid leave prior to using any other leave provided by the employer or applicable state law (e.g., it could be taken prior to and not concurrently with other leave).
To use Paid Leave, an employer may require that an employee follow specific notice requirements, provided, however, that such notice requirements are in writing and comply with the Act. Employees only need to provide 7 calendar days of notice if the leave is foreseeable, and, if the leave is not foreseeable, provide notice to their employer “as soon as is practicable.”
While an employee uses paid leave, an employer must maintain the employee’s health coverage.
Separation, Transfer and Re-hire
Upon separation of employment accrued but unused, paid leave does not need to be paid. However, the Act does require that if an employee is rehired within 12-months, then the balance of their paid leave prior to leaving must be reinstated. If an employee is transferred, then the employee must be credited with their accrued leave upon transfer.
Existing Policies; Local Ordinances
If an employer provides leave that is more generous than the Act, such leave may be used to meet their obligations under the Act. Even if a Paid Time Off (PTO) policy complies with the act, unused PTO must be paid upon separation of employment.
If a local municipality requires more generous benefits than provided under the Act, employers subject to the more generous ordinance must comply with such ordinance.
Record Keeping and Notice
Employers must keep records evidencing compliance with the Act, for a minimum of 3 years. Such records must be available upon request by the Illinois Department of Labor.
An employer is required to post a notice about the Act, created by the Illinois Department of Labor (IDOL), and include in a handbook, if one exists, this required notice. In addition, upon request, employers must notify an employee of their accrued but unused balance of paid leave, if the employer uses the accrual method provided under the Act.
Anti-Retaliation
The Act includes strong anti-retaliation provisions. Not only is an employer prohibited from retaliating against an employee for exercising rights under the Act, but the Act specifically provides that an employer may not take into consideration that employees used such paid leave when considering employees for hiring, promotion, or discipline.
Enforcement
The Illinois Department of Labor handles enforcement of the Act. Employees may file a complaint within 3 years after the alleged violation. Employees will be able to recover damages including the amount of underpayment, compensatory damages, and a penalty of not less than $500 and no more than $1,000. In addition to damages, the Act allows an employee to recover attorneys’ fees and costs.
In addition, violators of the act are subject to a civil penalty of $2,500 for “each separate offense” (except for the notice requirements). These civil penalties collected under this section shall be deposited into a Paid Leave for All Workers Fund, a fund dedicated to funding the enforcement of the Act. Accordingly, the failure to maintain required records could result in a significant penalty based on the number of employees impacted.
Walker Lawrence chairs Levin Ginsburg’s employment law practice and has extensive experience with employment law and corporate counseling. Should you have any questions about navigating these changes, feel free to contact Walker at 312-368-0100.
Levin Ginsburg is a full-service law firm that prides itself on being counselors for all types of businesses and individuals. Regardless of your need, our attorneys exercise great care in being thorough, organized, and efficient in serving our clients, not just their matters.
