Beginning Jan. 1, 2024, the recently enacted Paid Leave for All Workers Act (the “Act”) will require most employers in Illinois to provide covered employees with at least five days of paid leave per year. This new legislation makes Illinois just the third state in the country to require employers to provide paid leave that employees can use “for any purpose.”
Notably, the Act does not apply to employers who must provide paid sick leave pursuant to the Chicago Paid Sick Leave Ordinance, the Cook County Earned Sick Leave Ordinance, or any other municipal or county ordinances that provide for paid leave or paid sick leave that are in effect as of Jan. 1, 2024. Any municipal or county ordinances enacted or amended after Jan. 1, 2024, will have to meet or exceed the requirements of the new Act, however.
The Act also does not apply to school or park districts, certain student and temporary employees of higher education institutions, certain railroad employees, and certain employees who are subject to collective bargaining agreements.
Leave Accrual and Use
Subject to the exemptions noted above, the Act now requires employers to provide their employees with at least 40 hours of paid leave per year that the employees can take “for any purpose.” The Act forbids employers from requiring employees to document their need for the leave. Rather, employees are entitled to take leave for any reason they may choose. Likewise, an employer may not require an employee taking leave to find another employee to cover the hours for which the employee takes paid leave.
Employers can elect to make the minimum 40 hours of leave either (1) available for use all at once, or (2) accrue over time at a rate of one hour per every 40 hours worked. Salaried employees are presumed to work 40 hours per week for purposes of the accrual rule unless they are scheduled to work part time.
Employees must be permitted to use their accrued leave by the later of (1) 90 days from the beginning of their employment, or (2) March 31, 2024. An employer may permit employees to use their leave earlier than these deadlines if the employer elects to do so.
Employers may set a “reasonable minimum increment” for the use of paid leave, provided that the minimum increment does not exceed two hours per day for a full time employee. Likewise, employers may require employees to provide up to seven calendar days’ notice where the leave is foreseeable. Where the leave is not foreseeable, an employee need only provide notice as soon as practicable.
Any leave an employee takes pursuant to the Act must be paid at the employee’s regular hourly rate. Where tips and/or commissions normally comprise a portion of the employee’s salary, the employee must receive at least the applicable minimum wage for their jurisdiction.
If an employer elects for leave to accrue over time, any accrued leave must carry over into the next year, except that employers are not required to provide more than 40 hours of paid leave in a 12?month period. If an employer elects to make 40 hours available all at once, any unused leave need not roll over to the next 12?month period.
Whether an employee is entitled to payment of any unused leave accrued under the Act at termination will depend on the employer’s policies. If an employer’s policies permit paid leave taken pursuant to the Act to be charged to an employee’s paid time off or vacation account, then any unused accrued leave the employee may have at the time of termination must be paid out to the employee. On the other hand, if the employer’s policies do not permit leave taken under the Act to be charged to the employee’s paid time off or vacation account, then the employer need not pay out the unused leave at termination. However, if an employee is rehired within twelve months, any unused leave they had accrued prior to their termination must be restored to them. Additionally, an employer must provide written notice if changes to its policies will affect the employee’s right to final compensation for unused leave at the time of termination.
Additional Employer Requirements
Employers must maintain for at least three years records adequate to determine the amount of accrued, used, and unused leave under the Act. Employers must also post in a conspicuous place in the workplace and include in their employee handbooks notice about the Act’s requirements. It is anticipated that the Illinois Department of Labor (IDOL) will provide additional guidance regarding these notice requirements in the coming days.
The Act prohibits employers from considering an employee’s use of paid leave as a negative factor in any employment decision or taking any adverse action against an employee because they exercised or attempted to exercise their rights under the Act, opposed practices the employee believed to be in violation of the Act, or supported the exercise of rights of another under the Act. Given the broad language in the Act, a cautious employer may wish to avoid questioning employees too closely about the foreseeability of their need for leave, lest they be perceived as attempting to discourage an employee’s exercise of his or her rights under the Act.
An employee who believes that his or her rights under the Act have been violated may file a complaint with the IDOL. Aggrieved employees may recover their actual damages, compensatory damages, penalties of up to $1,000 per offense, equitable relief, and reasonable attorney’s fees and costs. An employer found to have violated the Act may also be subject to a civil penalty of up to $2,500 per offense, payable to the state treasury.
It is expected that further guidance on these important provisions will be forthcoming, so employers should stay tuned for further developments. In the meantime, feel free to contact any member of Taft’s Employment and Labor Relations group in Chicago with any questions.