We are writing to provide an additional update regarding Illinois’ new Paid Leave for All Workers Act.
We previously reported the Illinois General Assembly’s passage of the Paid Leave for All Workers Act on January 10, 2023. On March 13, 2023, Illinois Governor J.B. Pritzker signed the Paid Leave for All Worker Act into law, officially making Illinois only the third state to mandate paid leave for workers for any reason.
As we previously reported, the law’s paid leave requirements will commence January 1, 2024. The new law requires Illinois employees be allowed to accrue paid leave at a rate of one hour for every 40 hours worked, with an annual earnings leave cap under the law of 40 hours a year. Naturally, an employer can allow employees to accrue more paid leave.
As a reminder, employers may front-load the 40 hours of paid leave or offer it on a pro rata basis from an employee’s first day of employment or on the first day of any consecutive 12-month period designated by the employer in writing when the employee is hired. An employer will have to take very specific steps to change the designated 12-month use or accrual period. Remember, if employers choose to front-load leave, they are not required to carry over paid leave from year to year and may require that the unused paid leave be forfeited at the end of the calendar year that marks the accrual period. An employer who chooses to front-load the leave may find doing so more efficient than managing the record keeping requirements associated with an accrual process throughout the year. If employers chose not to front-load the time, they must allow up to 40 hours of paid leave to be carried over annually but can cap the annual leave used in any particular year to 40 hours. Those employers will also have record keeping requirements associated with ensuring the proper accrual of the paid leave.
Don’t forget: It is assumed that employees exempt from the overtime requirements of the Fair Labor Standards Act work 40 hours in a week for the purposes of leave accrual. If any such employee has a workweek less than 40 hours, accrual is based on that employee’s regular workweek. Employees who work days less than two hours will have to use the duration of their work day to determine their amount of paid leave. Also, employers can set a reasonable minimum increment for use of paid leave not to exceed 2 hours per day.
It is also important to remember that the leave required under the new law is paid leave for any reason, so long as the leave is used in accordance with the employer’s leave policy. That means that employers cannot require employees to provide a reason for leave or to provide documentation to support leave when using any time provided under this law. Employers may require employees to wait 90 days from the start of employment prior to using any leave but may not delay leave accrual from beginning the actual first day of employment. Employers can require employees to provide seven days’ notice before taking foreseeable leave and notice as soon as practical when leave is unforeseeable. More stringent notice requirements will likely be prohibited.
While it is likely that most employers of a certain size meet this new law’s general requirements, it will be imperative for those employers to review current policies to ensure that their terms do not run afoul of the specific requirements of the new law, e.g., accrual rates, record keeping requirements, and notice rules. It is also important to consider that the Illinois Wage Payment Collection Act, as well as other Illinois laws, will govern the payout of accrued leave credited to an employee’s paid time off bank or employee vacation account. Like other wage and hour laws, employers will have posting requirements under this new law.
Chico & Nunes attorneys are on standby to assist you in reviewing and updating your current leave laws and employment handbooks to ensure compliance with Illinois’ new leave requirements.
Sincerely,
Gery Chico, Jonathan Leach, and James R. Glenn Chico & Nunes, P.C.