Following the national trend of more generous and accessible paid leave laws at the state level, Illinois enacted the “Paid Leave for All Workers” Act which took effect January 1, 2024. The act permits employees who work in Illinois to earn and to use up to a minimum of 40 hours of paid leave each year, which can be used for any reason. Employers may not require employees to provide a basis for their time off request, nor documentation as proof or in support of the leave requested.
Employees first eligible for leave under the act may begin exercising paid leave as of March 31, 2024.
Key Details
- Employees accrue one (1) hour of paid leave for every forty (40) hours worked, with employers required to provide up to forty (40) hours of paid leave in a 12 month period.
- An employer may, but is not required to provide more than forty (40) hours of paid leave in a 12-month period.
- The 12- month period may be any consecutive 12-month period established by the employer in writing at the time of hire.
- Employees are permitted to begin using accrued paid leave after the expiration of ninety (90) days either from the effective date of the Act (January 1, 2024) or following commencement of employment, whichever is later.
- Employees shall be paid at their regular rate of pay for paid leave. For those employees whose pay is customarily and usually comprised of gratuities and commissions, they shall receive at least the full minimum wage from their employer in the applicable jurisdiction in which they are employed for the purpose of meeting their regular rate of pay under the Act.
- For leave which is foreseeable, employees are required to provide seven (7) calendar days’ notice to their employer prior to the date on which leave begins. If leave is not foreseeable, then an employee shall provide notice to their employer as soon as is practicable after the employee becomes aware of the necessity for such leave.
- Except in certain circumstance, paid leave shall carry over annually to the extent not used by the employee.*
For employees exempt from overtime requirements of the FLSA, they shall be deemed as working forty (40) hours per week for accrual purposes if they regularly work forty (40) hours or more. For non-exempt employees who work more than forty (40) hours per week, the employer should count all hours worked, including overtime hours for purposes of accrual. Even where an employee may accrue paid leave more quickly as a result of overtime, however, an employer is not required to provide more than forty (40) hours of paid leave in a 12-month period, and may cap an employee’s accrual at forty (40) hours.
If employees begin accruing paid leave on January 1, 2024 (the effective date of the Act), they are entitled to begin using any accrued leave after 90 days, which would be March 31, 2024. Employees may determine how much paid leave to use, but may be required to utilize a reasonable minimum increment, not to exceed 2 hours per day.
Are Any Employers Exempt?
The application of the Illinois Paid Leave Act for All Workers is expansive as its name suggests, but is not universal. Public school districts organized under the School Code are exempt from the Act. A private school, not organized under the school code, however, is not exempt from the Act.
Employers should consult the Illinois Department of Labor website for additional information and resources including proposed rules and FAQs.
Employer Posting and Recordkeeping Requirements
All subject employers, even those with an existing paid time off policy that complies with the Act’s requirement, are required to provide notice of the law’s requirements via poster which must be placed where employee notices are customarily placed, as well as include such document in a written document, or written employee manual or policy if the employer has one. The Illinois Department of Labor official workplace notice can be located here. Employers also have recordkeeping obligations under the Act which requires them to document:
- hours worked;
- paid leave accrued and taken, and
- remaining paid leave balance for each employee.
Employers are required to maintain the above records for a period of not less than 3 years and shall allow the Department access to such records, at reasonable times during business hours, to monitor compliance with the requirements of the Act. In addition, the records shall be preserved for the duration of any claim against the employer which alleges a violation of the Act.
Additional Considerations for Employers
Employers with existing paid leave plans which meet the requirements of the Act may be used to meet their obligations under the law.
Employers may front-load an employee’s paid leave on the first day of employment or on the first day of the applicable 12-month period if they choose to. *For employers in this circumstance, they are not required to carryover paid leave from 12-month period to 12-month period and may require employees to use all paid leave prior to the end of the benefit period or forfeit the unused paid leave.
Employers are not required to payout accrued, but unused leave upon an employee’s termination, resignation, or retirement unless the leave is credited to the employee’s paid time off bank or employee vacation account. Employers should consult the Illinois Wage Payment and Collection Act for their obligations in that regard.