Illinois Mandates Paid Leave for Employees

On January 10, 2023, both houses of the Illinois legislature passed the Paid Leave for All Workers Act (the Act). The Governor is expected to sign it, and it will take effect on January 1, 2024. The Act will require almost all employers to provide employees with up to 40 hours of paid leave per year, to be used for any purpose.

While employers that do not currently offer paid leave will need to adopt a written policy to comply with the Act, employers that do offer paid sick leave or paid time off will likely want to revisit their policies as well. The Act states that an employer that has a paid leave policy providing at least 40 hours per year of paid leave that can be taken for any reason is not required to modify the policy. However, the Act includes other provisions, such as requirements relating to notice from the employee, that an employer currently offering paid leave may need to incorporate in its policy.

Which employers and employees are covered?

The Act applies to all employers, including units of state and local government (except school districts and park districts). It applies to all employees, except:

• employees defined in the Railroad Unemployment Insurance Act
• students enrolled in a college or university who are employed on a temporary, part-time basis at the same college or university
• short-term employees of an institution of higher education who are employed for less than two consecutive calendar quarters
• workers in the construction industry covered by a bona fide collective bargaining agreement; and
• workers in package delivery companies covered by a bona fide collective bargaining agreement.

The Act does not change the terms of a bona fide collective bargaining agreement that is in effect on January 1, 2024 (or July 1, 2024 in the case of state agencies). After that date, the requirements of the Act may be waived in a bona fide collective bargaining agreement if the waiver is explicit.

How much paid leave is required?

The Act requires up to 40 hours during a 12-month period. The period is any consecutive 12-month period designated by the employer in writing at the time of hire. Employees will accrue paid leave at the rate of one hour of paid leave for every 40 hours worked up to 40 hours (or more if the employer provides more than 40 hours of paid leave). Employees may begin using paid leave 90 days after commencement of employment. Employers may set a minimum increment for the use of paid leave, not to exceed two hours per day. Employers are permitted to front-load the eligibility for leave (in which case the employer is not required to carry over leave). Employers who don’t front-load eligibility for leave must allow employees to carry over unused leave.

Must employers pay for unused leave when the employment terminates?

The employer is not required to pay the employee for unused accrued leave at time of termination. However, if the employer has a policy that paid leave under the Act is credited to an employee’s paid time off or vacation account, then unused paid leave must be paid to the same extent as vacation time.

Do employees have to provide notice in order to use paid leave?

If the need for leave is foreseeable, the employer may require 7 calendar days’ notice. Employers may not require the employee to find a replacement worker to cover the period of leave. If the need for leave is not foreseeable, the employee is to provide notice as soon as practicable. Employers must give employees written notice of the paid leave policy notification requirements.

Employers may not retaliate against an employee using paid leave permitted under the Act. This includes considering the use of paid leave as a negative factor in an employment action involving evaluating, promoting or disciplining the employee.

The Act will be enforced by the Illinois Department of Labor (DOL). The DOL is to prepare a notice summarizing the requirements of the Act which must be posted by employers.
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