This January, the Illinois legislature passed the Paid Leave for All Workers Act (Act), which will require employers to provide Illinois employees with earned paid leave beginning January 1, 2024. Illinois employees will be entitled to accrue 1 hour of paid leave for every 40 hours worked, up to a minimum of 40 hours of leave in a 12-month period. Employees will be able to use this paid leave for any reason after 90 days of employment.
The Illinois Department of Labor (Department) is responsible for administering and enforcing the Act and is charged with adopting rules for this purpose.
How much paid leave are employees entitled to under the Act?
Eligible employees who work in Illinois are entitled to earn and use up to a minimum of 40 hours of paid leave during a 12-month period. Eligible employees are entitled to accrue 1 hour of paid leave for every 40 hours worked, up to a minimum of 40 hours of paid leave (employers can choose to provide more than 40 hours). Alternatively, employers can “frontload” the 40 hours (or a prorated amount, as applicable) on an employee’s first day of employment or the first day of the 12-month period.
Paid leave must begin to accrue (or must be frontloaded) at the commencement of employment or on the effective date of the Act (January 1, 2024), whichever is later.
What is the 12-month period?
The 12-month period can be designated by an employer in writing at the time of hire. Changes can be made to the designated 12-month period if the employer (1) provides advance written notice to employees prior to any change; (2) does not reduce the eligible accrual rate or paid leave available; and (3) provides employees with documentation of the balance of the hours worked, paid leave accrual taken, and the remaining leave balance.
Does unused leave carryover?
Unused paid leave must carryover; however, employers are not required to provide more than 40 hours of paid leave in a 12-month period, unless the employer chooses to do so.
For which reasons can employees take leave?
The paid leave may be used by an employee for any reason of the employee’s choosing. Employees cannot be required to provide their employer a reason for leave or documentation in support of the leave.
Further, an employer may choose whether to use leave provided under the Act prior to using any other leave provided by the employer or pursuant to state law.
How much must employees be paid during the leave?
Employees must be paid their hourly rate of pay during the leave. However, if an employee is in a position in which gratuities or commissions customarily have been recognized as a part of their renumeration, their employer must provide them with at least the minimum wage of the applicable jurisdiction when leave is taken under the Act.
Must employers continue healthcare benefits during the leave?
Yes, employers must maintain coverage for the employee and any family member under any group health plan for the duration of the leave under the same conditions that would have been provided if the employee was not on leave. Employers must notify employees that they are still responsible for contributing any employee share of the cost of coverage.
When can employees start taking leave?
Employees are eligible to begin using the paid leave after 90 days of employment or 90 days following the effective date of this Act (January 1, 2024), whichever is later.
Can employers require employees to provide notice before they take leave?
An employer can implement a “reasonable” paid leave notification requirement if the following conditions are met:
- If the use of paid leave is foreseeable, the employer may require the employee to provide notice within 7 calendar days before the leave is to begin.
- If the use of paid leave is not foreseeable, the employer may require the employee to provide notice as soon as practicable after the employee is aware of the need for leave. If an employer requires this, they must provide a written policy that contains procedures for the employee to provide such notice.
- Employers must provide a written notice of the paid leave policy notification requirements.
- Employers cannot require that an employee search or find a replacement worker to cover hours during the time the employee is taking leave.
Are employers required to compensate employees for unused paid leave upon the separation of employment?
No, employers are not required to provide financial or other payment to an employee for unused leave upon the employee’s termination, resignation, retirement, or other separation of employment.
How is accrued leave treated when an employee is rehired or transferred to another division by the same employer?
If an employee is transferred to a separate division, entity, or location, but remains employed by the same employer, the employee is entitled to all paid leave previously accrued. If an employee is rehired within 12 months of a separation of employment, the employer must reinstate any unused accrued paid leave.
What records must employers keep?
Employers must retain records documenting hours worked, paid leave accrued and taken, and remaining paid leave balances for each employee for at least 3 years (and for the duration of any pending claim). Employers must allow the Department access to these records upon their request.
If an employer provides paid leave on an accrual basis, they must provide employees with the amount of paid leave used and accrued upon their request.
Are employers required to notify employees of leave entitlements under the Act?
Employers are required to post a notice summarizing the requirements of the Act in a conspicuous place at worksites. Employers must also include this notice in a written document or employee manual/policy (if the employer has one). The Department will develop a notice for this purpose and will make it available to employers.
If an employer’s workforce is comprised of a significant portion of workers who are not literate in English, the employer must notify the Department and the Department will prepare the notice in the appropriate language.
Employers who fail to comply with these notice requirements may be subject to a civil penalty of $500 for the 1st violation and $1,000 for any subsequent violation.
What are the potential penalties for non-compliance?
The Department is responsible for administering and enforcing the Act. The Department has the power to conduct investigations, depositions, and discovery and issue subpoenas.
Employees may file a complaint with the Department within 3 years of an alleged violation of the Act. Employers may be liable to pay aggrieved employees any underpayments, compensatory damages, penalties between $500 and $1,000, reasonable attorney and expert witness fees, and other costs of a legal action.
Further, employers may be subject to a civil penalty of $2,500 for each separate violation of the Act.
Employers with Illinois employees should prepare to comply with the Act before the January 1, 2024 effective date. Employers may want to do the following in preparation:
- Determine whether to provide leave entitlements on an accrual basis or by frontloading the requisite hours. If providing leave on an accrual basis, determine how to track accruals and how to provide employees with their accrual balances upon any request.
- Determine whether to require employees to provide reasonable notification of the need for leave, and if required, develop a policy for the notification process.
- Develop a plan to retain records that document hours worked, paid leave accrued and taken, and paid leave balances for each employee.
- Plan to post the required notice at worksites and incorporate it into written materials or any employee handbook after the Department releases the notice. Determine whether employer needs to request the notice in another language from the Department (i.e., if a significant portion of employees are not literate in English), and if needed, submit such a request.
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