On March 13, 2023, Illinois governor J. B. Pritzker signed the Paid Leave for All Workers Act (the “Act”) into law which will require employers to provide paid leave to their employees for any reason. Illinois is now the third state to have such a law. The Act will go into effect on January 1, 2024 and will mandate paid leave for any reason of an employee’s choosing. Here is what Illinois employers need to know:
How much paid time off are employees provided?
Employees will accrue one hour of paid leave for every 40 hours worked up to 40 hours total during a consecutive 12-month period.
When will the 40 hours begin to accrue?
Paid time off under the Act will begin accruing once an individual has been employed for 90 days.
Can the 40 hours be frontloaded?
An employer may frontload the entire 40 hours to an employee at the beginning of a 12-month period.
Can the employer change the designated 12-month period?
In order to change the designated 12-month use or accrual period, the employer must:
- Provide written notice to employees prior to the change
- Provide employees with documentation of the balance of hours worked, paid leave accrued and taken, and their remaining paid leave balance
- Ensure that the change does not reduce eligible accrual or paid leave available to employees.
Can unused paid leave carry over to the next year, or 12-month period?
Employers who frontload the 40 hours to the employees will not be required to carry over any remaining paid leave from year to year. Employers who do not frontload the 40 hours must allow up to 40 hours to be carried over annually.
Do employers have to pay out unused accrued leave at the year’s end or at time of separation?
Employers are not required to pay out any unused accrued leave at the year’s end or at time of separation.
What is required of employees when requesting paid leave under the act?
When requesting leave under the Act, employees are not required to provide documentation or a certification so long as they have provided seven days’ notice of foreseeable leave. If leave is not foreseeable, employees should provide notice as soon as is practicable after the employee becomes aware of the necessity of the leave. Employees are also not to be required to search for or find a replacement worker to cover the employee’s hours during which the employee takes the leave.
Can the employer set up its own notice procedure?
The employer can set up an established notice procedure with its employees to request leave under the Act and should the employer seek to update this procedure, it must provide its employees notice of no less than five calendar days.
Can employers set a minimum increment of hours to be used at a time?
Employers can set a minimum increment of hours used at a time no greater than 2 hours per day.
Can employees use other leave prior to using paid leave under the Act?
Employees requesting leave may have it applied to another leave policy set up by the employer or under state law before using the leave they have accrued under the Act.
How much are employees required to be paid when taking leave under the Act?
Employees are required to be paid their regular hourly rate of pay. However, employees engaged in an occupation in which gratuities or commissions have customarily been part of an employee’s compensation are to be paid at least the full minimum wage in the jurisdiction in which they are employed when the paid leave is taken.
What if an employee is transferred or rehired?
An employee who is transferred to a separate division but remains working for the same employer is entitled to all paid leave previously accrued. If an employee is separated from employment but rehired within 12 months, the employee likewise is entitled to all previously accrued paid leave.
What else is required of employers?
Employers must provide their employees with written and conspicuously posted notice of the Act’s requirements either in a handbook or another location. This notice must accommodate for employees who are not literate in English. Employers must maintain records of hours worked, paid leave accrued and taken, and any remaining paid leave balance for at least three years. Employers must also inform their employees of the accrued, unused balance upon request.
What are the remedies for violations of the Act?
Similar to many wage, hour, and leave laws, employers are prohibited from retaliating or in any way interfering with employees’ request for leave under the Act. While the Act does not provide for a private right of action, penalties for violating the Act include civil penalties of up to $2,500 per offense to be paid into the state’s Paid Leave for All Workers fund. Additionally, an employee could recover for underpayment, compensatory damages, and payment of attorney’s and expert fees and costs through a Department of Labor Complaint.
Employers would be well served to review their leave policies prior to the Act’s effective date of January 1, 2024. Should you have any questions about how your business can ensure that it complies with the Act, please feel free to contact the attorneys at Segal McCambridge.