The Paid Leave for All Workers Act, expected to be signed soon by Illinois Governor J.B. Pritzker, would require nearly all covered Illinois employers to provide employees paid leave to be used for any purpose. Illinois would be just the third state to mandate paid leave – only Maine and Nevada have similar laws.
Once signed, the Act would take effect on Jan. 1, 2024, and provide nearly all Illinois workers with a minimum of 40 hours of paid leave, or a pro rata number of hours, during a designated twelve-month period.
Covered Employers and Employees
The Act applies to all employers in Illinois, including units of state and local government and government agencies. It does not, however, cover school districts organized under the School Code or park districts organized under the Park District Code.
The Act covers all employees, with the following exceptions:
- Employees as defined in the federal Railroad Unemployment Insurance Act or the Railway Labor Act
- Temporary college or university student-employees
- Certain short-term employees of an institution of higher learning
- Employees working in the construction industry who are covered by a bona fide collective bargaining agreement (CBA)
- Employees who are covered by a bona fide CBA with an employer that provides services nationally and internationally of delivery, pickup, and transportation of parcels, documents, and freight.
The Act does not affect the validity of or change the terms of a valid CBA in effect on January 1, 2024. Any subsequent agreements, however, will need to either comply with the Act or explicitly waive its requirements in the CBA.
Accrual, Frontloading, and Carryover
On January 1, 2024, or whenever employment begins, covered employees will accrue one hour of paid leave for every 40 hours worked. Employers are permitted to cap accrued leave at 40 hours annually. Exempt employees will be deemed to work 40 hours in each workweek unless their regular workweek is less than 40 hours, in which case paid leave accrues based on that regular workweek.
Employees can accrue up to 40 hours in any 12-month period as designated by the employer at the time of hire. Employers may also frontload 40 hours of paid leave on the first day of that 12-month period to employees in lieu of an accrual system. Employees may carry over paid leave from one 12-month period to the next. If employers choose to frontload the leave, however, the Act allows employers to require employees to forfeit all unused paid leave at the end of the 12-month period.
Employees may begin using paid leave 90 days after the start of employment or on March 31, 2024, whichever is later.
Use and Documentation of Paid Leave
The Act allows employees to use the paid leave for any reason of the employee’s choosing. Employers may not require the employee to provide a reason for taking the leave or provide documentation of the leave. Employers also cannot require employees to search for or find a replacement worker to cover their leave.
Employees may determine how much leave to use, but employers may set a reasonable minimum of increment of no less than two hours per day. If an employee’s scheduled workday is less than two hours, then the employee’s scheduled workday will be used to determine the amount of paid leave.
Employers may require up to seven calendar days’ notice of foreseeable leave if they have a written policy outlining notice requirements and procedures. If the leave is not foreseeable, employees must provide notice as soon as practicable.
Payment on Termination
The Act states that it will not require payout of earned, unused paid leave upon separation of employment. Unused time must be reinstated and made available for use if a separated employee is rehired within 12 months of separation.
Intersection with Local Paid Sick Leave Laws
The Paid Leave for All Workers Act does not preempt the local and municipal ordinances that require employers to give paid leave to their employees, including paid sick leave. This means that employers that are subject Cook County Earned Sick Leave Ordinance or the Chicago Minimum Wage and Paid Sick Leave Ordinance are not covered by the provisions of the Act.
Any local ordinance that provides paid leave, including paid sick leave or other, paid leave, enacted or amended after the effective date of the Act must comply with the requirements of the Act or provide benefits, rights, and remedies that are greater than or equal to those of the Act.
Employers should consider thinking through their leave policies and procedures in advance on the law taking effect on January 1, 2024. While employers that already have paid leave policies that provide at least forty hours of leave per year are not required to modify their policies as long as the leave can be taken for any reason, employers may want to consider creating a policy specifically addressing the Paid Leave for All Workers Act and may want to change existing accrual policies. We will continue to monitor passage of the law and the Illinois Department of Labor’s website for the release of further guidance.