Employers Take Note:  Paid Leave for All Illinois Workers Starting In 2024

In March 2023, the ICS’ Governmental Relations Director Ben Schwarm reported that Governor Pritzker had signed into law the Paid Leave for All Workers Act.   Although some question existed as to whether the legislature would extend its effective date, it now appears that the Act will go into effect on January 1, 2024.  The law applies to almost every employer in Illinois, including physician offices.  

Summary of Paid Leave Requirements:

• Paid Leave Required Each Year — An employee who works in Illinois is entitled to earn and use up to a minimum of 40 hours of paid leave during a 12-month period, or a pro rata number of hours for employees who work fewer than 40 hours per week.  This paid leave may be used by the employee for any purpose, which the employee is not required to identify.
• Rate of Accrual — Paid leave accrues at the rate of one hour of paid leave for every 40 hours worked up to a minimum of 40 hours.  For example, an employee who works 40 hours per week accrues a minimum of 40 hours paid leave per year.  Employers are not limited to this amount and may provide more than the minimum.
•  Some Jurisdictions Governed by their own Paid Leave Ordinances — The Act is not applicable to an employer that is already governed by and complying with the Cook County Sick Leave Ordinance that has been in place since 2017 (see https://www.cookcountyil.gov/service/earned-sick-leave-ordinance-and-regulations.  The City of Chicago recently adopted a paid leave ordinance that is more generous than the State’s and will go into effect on January 1, 2023.  The City’s requirements up to December 31, 2023, may be found here:  https://www.chicago.gov/city/en/depts/bacp/supp_info/paidsickleaveinfo.html).  For a discussion of the amendment that will go into place on January 1, 2023, see:  https://www.bakerlaw.com/insights/chicago-enacts-sweeping-new-paid-leave-ordinance/[i]
• Employer May Choose One of Two Methods of Accrual of Hours — The Act allows employers to choose one of two methods for the accrual of paid leave hours:
  • The employer can provide all 40 hours of paid leave at the start of the 12-month period, in which case employees must use all 40 hours during the 12-month period or lose all unused hours at the end of the period.
  • Alternatively, the employer can have its employees accrue paid leave hours as they work during the year. If this method is used, employees can carry over unused paid leave to the following year.
• Employee Not Required to Disclose Reason for Paid Leave — An employee may take paid leave provided under this law for any reason and is not required to provide a purpose or documentation in support of the leave. An employee may choose whether to use paid leave provided under this law prior to using any other leave provided by the employer or State law.
• Employees to be Paid Their Regular Rate — Employees are to be paid their regularly rate of pay for paid leave.    
• Leave Time May be Used Beginning 90 Days from Start Date — Employees may begin using paid leave 90 days following the beginning of their employment.

Additional Provisions

The new law spells out additional details that include minimum paid leave time increments, employee advance notice requirements, employer recordkeeping, and sanctions on employers for non-compliance.

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While an employer may set a minimum increment of hours of leave that can be used per day, that increment cannot exceed two hours per day.  For example, an employer may require an employee to use a minimum of two hours’ leave for a doctor’s appointment, even if the employee is absent for fewer than 2 hours.

Also, for paid leaves that are foreseeable, an employer may require their employees to request the leave at least 7 calendar days in advance. For paid leave requests that are not foreseeable, employees must notify the employer as soon as reasonably possible after becoming aware of the necessity for the leave. The employer is required to provide employees with a written policy explaining procedures for giving notice of a request for paid leave.

The Act requires employers to keep accurate records of paid leave hours accrued and taken. It also allows the Illinois Department of Labor to impose civil penalties for violations of the law.

Current Status and Recommended Compliance

The Paid Leave for All Act is set to become effective on January 1, 2024.  This issue will likely garner media attention and employees will expect paid leave according to the new law. Therefore, the ICS advises members to implement required paid leave as of January 1. 

The Illinois Department of Labor has file proposed rules that reiterate the main points of the law and add details and examples.  One additional detail is that an employer is required to count all time that an employee works, including overtime hours worked, for purposes of calculating accrual of paid leave.  However, an employer is not required to count time when an employee is on paid or unpaid leave or other noncompensable time.   The ICS recommends that members use this guideline unless and until final rules change it. 

The Paid Leave for All Workers rules will not become final until the completion of a minimum of two 45-day comment periods.  As always, the ICS will monitor the rulemaking process and advise members of the final rule or any changes in paid leave requirements.

For additional information about the Paid Leave for All Act, the Illinois Department of Labor has posted answers to frequently asked questions here.

Frequently Asked Questions

Is this required for part-time and full-time employees?

Yes. It applies to all employees, but you can apply slower accrual rules for part-time employees.

How do I calculate the hours that a Part-Time employee earns or how quickly a full-time employee earns his or her 40 hours?

Illinois Department of Labor indicates employees should “earn paid leave time at a rate of one hour of paid leave for every 40 hours worked.” For example, if an employee works 10 hours a week, this part-time employee would earn one hour after 4 weeks of work (or 13 total hours for the year). This applies to both full and part-time employees. However, employers can choose to give all 40 hours up-front.

Is there an exemption for businesses with fewer or even one employee?

All employers – any business structure with any number of employees. Only school districts and unions that meet very specific requirements are exempt. If you have a policy that provides more leave than the act requires, then you adjust the policy to make sure that it meets all provisions of the law.

Can employees waive their right to leave under this requirement?

No. The act states, “An agreement by an employee to waive his or her rights under this Act is void as against public policy.”

When do I have to give policies or handbooks to employees regarding their leave?

If you have a written leave policy or an employee handbook, it should include leave that meets the state requirements at a minimum. You must provide a copy of the policy or handbook to employees either when they begin working for you or by March 31, 2024, whichever is later.

Is there a required poster for the Paid Leave for All Act?

The Illinois Department of Labor will make a poster available, and it must be posted with your other employment posters by March 31, 2024.

How will employees know how much time they have accrued?

Employers are required to “provide an accounting of the employee’s unused balance of paid leave time on each paystub or form that the employer normally furnishes to the employee to notify them of wage payments and deductions from wages.”

I live in Cook County, does this apply to me?

It depends. If you live in the City of Chicago, then the current City of Chicago ordinance supersedes this new state law. Please review the City of Chicago paid leave requirements here.

If you live in Cook County but not in Chicago AND your municipality did not opt-out of Cook County’s Paid Sick Leave ordinance, then the Cook County Paid Sick Leave ordinance supersedes this new state law. Please review the Cook County Paid Sick Leave ordinance here.

If you live in Cook County but not in Chicago AND your municipality opted-out of Cook County’s Paid Sick Leave ordinance, then the new state law applies to you (please read and follow the information above).

The law mentions 40 hours minimum, do I have to give my part-time employees 40 hours of paid leave?

The minimum in this case indicates that employers MAY choose to offer more than 40 hours of paid leave. In other words, if you offer your employees 2 weeks of vacation, then the law does NOT require you to lower your amount of paid leave.

As mentioned above in the part-time FAQ, the law indicates “shall accrue at the rate of one hour of paid leave for every 40 hours worked up to a minimum of 40 hours.” The “up to” indicates that if the accrual calculation may result in less than 40 hours. In another section, the law indicates “minimum number of hours of paid leave, subject to pro rata requirements.” “Pro rata” is referencing the accrual amounts.

[i] Baker Hostetler Insights Blog, “Chicago Enacts Sweeping New Paid Leave Ordinance,” 11/13/2023.