On February 27, 2023, Governor Pritzker is expected to sign the Paid Leave for All Workers Act (the "Act") into law. Illinois will become the third state (joining Maine and Nebraska) to mandate that almost all private employers provide employees working in Illinois with up to 40 hours of paid leave each year. The paid leave may be used by employees "for any purpose," as emphasized by the Act's declaration: "The General Assembly finds that it is in the public policy interests of the State for all working Illinoisans to have some paid leave from work to maintain their health and well-being, care for their families, or use for any other reason of their choosing." The Act will become effective on January 1, 2024.
The Act applies to all private employers in Illinois, and covers all employees, with certain industry exceptions. The Act also exempts employers already covered by municipal or county ordinances that provide for paid leave or paid sick leave, such as the Chicago Minimum Wage and Paid Sick Leave ordinance or the Cook County Earned Sick Leave Ordinance – meaning employers in Chicago will not be required to provide paid leave under the Act on top of the paid sick leave they already required to provide.
Under the provisions of the Act, nearly all employees who work in Illinois are entitled to earn and use a minimum of 40 hours of paid leave "for any reason of the employee's choosing" during a 12-month period, at their standard hourly rate of pay. Because leave may be taken for any reason, employers may not require employees to submit documentation to support the leave. Employers, however, may require employees to provide 7 days' notice for "foreseeable" paid leave and notice "as soon as is practicable" for unforeseeable leave. Employers may also set a minimum increment of 2 hours for the use of paid leave.
A key consideration for Illinois employers is that they may elect to offer the mandated paid leave in one of two ways – much like paid sick leave under the Chicago Ordinance. First, employers may allow employees to accrue one hour of paid leave for every 40 hours worked, accruing up to 40 hours in a 12-month period. If an employer elects this accrual option, they must allow employees to carry over any accrued but unused paid leave from one 12-month period to the next. Second, employers may alternatively front-load the 40 hours of paid leave, by granting it to employees on the first day of the 12-month period. With this election, employers may choose whether or not to allow employees to carry over paid leave beyond the 12-month period. It is worth noting that under the Act, accrued and unused paid leave does not need to be paid out upon separation of employment.
To the extent, Illinois employers are not already providing all employees – including part-time employees, with paid leave, they should be prepared to implement new leave policies in compliance with the Act by 2024. For compliance purposes, the Act also requires employers to keep records of employees' hours worked, paid leave accrued and taken, and remaining paid leave balance. Once the Act goes into effect, Employers will also be required to post a notice to employees and update employee manuals or policies with a summary of the Act's requirements and employees' rights under the new law.
If you have questions regarding the Act or compliance with any of its provisions, or would like assistance preparing to provide this additional leave, please contact any of our Labor & Employment lawyers.