By Daniel Finerty
Effective January 1, 2024, the Illinois Paid Leave for All Workers Act (Act) will grant most Illinois employees the right to earn up to 40 hours of paid leave annually, setting a minimum paid leave standard for all Illinois employers. According to Governor Pritzker’s press release, the Act will provide about 1.5 million employees with the right to earn paid time off starting in 2024. We previously discussed the new Act here.
Under the Act, covered employees, defined to include part-time and temporary employees, are entitled to earn up to 40 hours of paid leave in a 12-month period. Paid leave is earned at a rate of one hour of leave per 40 hours worked. While exempt employees are deemed to work 40 hours per week, both hourly and salaried employees who work less hours are entitled to proration. While an employer may set a reasonable minimum increment for an employee’s use of paid leave not to exceed 2 hours per day, it is the employee who “shall determine” how much paid leave is necessary. While the obligations under the Act explicitly cover domestic workers, independent contractors are not included.
As opposed to ongoing accrual as an employee works, an employer can elect to provide employees with the minimum number of hours of paid leave on the first day of employment or the first day of the 12-month period. As an incentive, employers that choose this method are not required to carryover paid leave from one 12-month period to the next and may require employees to “use it or lose it” by the end of the year. Regardless of method, employees are entitled to begin using paid leave 90 days following commencement of employment or 90 days following the effective date of this Act, whichever is later. As applicable here, an employee that begins accrual under the Act on January 2, 2024, the first workday of the year, will not be able to access paid leave until April 1, 2024.
Designation of “Year”
Provided it does so at the time of hire in writing, an employer may designate any 12-month period it chooses. Should an employer wish to modify the 12-month period, notice must be given to employees in writing prior to the change. That said, an employer’s modification of the 12-month period may not reduce the eligible accrual rate or reduce the paid leave available, like a transition between the calendar method and the rolling method under the Family and Medical Leave Act (FMLA). Advanced, written notice must be provided to employees and implementation must not reduce eligible accrual rates or each employee’s available paid leave.
Differences from FMLA
Outside of the administrative basics, the Act may also create some operational challenges. First, an employee may take leave under this Act for any reason of the employee’s choosing, which broadens the reasons for which leave may be requested or taken well beyond the FMLA. Second, an employee is not required to provide the employer with a reason for the leave. Third, an employer may not require an employee to provide documentation or certification as proof of the need for the leave or in support of the leave. Fourth, while most employees must be compensated at their regular hourly rates for paid leave, employees engaged in gratuity- or commission-based employment must be paid at least the full minimum wage in the jurisdiction in which they are employed when paid leave is taken.
Similarity to FMLA
Like other acts under state or federal law, nothing in the Act precludes an employer from providing greater leave than that required by the Act. Likewise, nothing in this Act shall be construed to waive or otherwise limit an employee’s right to final compensation for any type of leave promised to be paid under a contract of employment or employment policy and earned by the employee.
The Act requires an employer to provide paid leave upon an employee’s oral or written request in accordance with the employer’s reasonable paid leave policy notification requirements which may contain certain requirements. First, where paid leave is foreseeable, an employer may require the employee to provide seven (7) calendar days’ notice before the date the leave is to set to begin. Second, where paid leave is not foreseeable, the employee can be required to provide such notice as soon as is practicable after the employee is aware that leave is necessary provided the employer has a written policy that contains a notice procedure applicable to requiring leave that is not foreseeable. Third, regarding any employer policy detailing the Act’s paid leave obligation, an employer must provide at least five (5) days’ notice of any policy change(s). Notices regarding the Act must also be posted in the employer’s workplace.
Like similar Illinois provisions, the Act provides that it is “unlawful for any employer to threaten to take or to take any adverse action against an employee because the employee (1) exercises rights or attempts to exercise rights under this Act, (2) opposes practices which the employee believes to be in violation of this Act, or (3) supports the exercise of rights of another under this Act.” Violations, such as where an employer considers an employee’s use of paid leave as a negative factor in any employment action that involves evaluating, promoting, disciplining, or counting paid leave under a no-fault attendance policy, are filed with the Illinois Department of Labor, and may subject an employer to civil penalties as outlined in the Act as well as “all legal and equitable relief as may be appropriate.” One noted example of interference would be requiring an employee to find a replacement for his or her shift during which leave under the Act is requested.
Employers that will be required to provide leave must plan in advance of January 1, 2024, to prepared for the impact of the Act upon operations to ensure that all aspects of the Act, including administration, policy development, providing leave and all other aspects, can be addressed prior to implementation and that existing leave policies can be modified accordingly. The Illinois Department of Labor has created a Frequently Asked Questions page with additional helpful information.