On Monday of last week, Illinois Governor J.B. Pritzker signed into law the “Paid Leave for All Workers Act” (Act) which establishes a minimum paid leave standard for all workers in Illinois, with the exception of certain railway, construction, and student employees. Starting January 1, 2024, employees who work within the geographical boundaries of the state of Illinois will accrue a minimum of one hour of paid leave for every 40 hours worked. Employees may use this leave for any reason, or for no reason at all. Salaried employees exempt from overtime under the federal Fair Labor Standards Act will be deemed to work 40 hours per workweek and will accrue leave at a rate of one hour of paid leave each week.
Leave Accrual and Use. As a general rule, employees will begin accruing paid leave on their first day (although employers can delay use of leave until after 90 days of employment), and may carry over up to 40 hours of leave from one employer-designated 12-month leave period to the next. The Act does, however, incentivize employers to front-load leave hours and allow employees to access paid leave earlier than required. Employers that front load at least the minimum of 40 hours of paid leave and allow employees to use paid leave starting on their first day of employment or the first day of the designated 12-month leave period are not required to roll over paid leave hours and may require forfeiture of paid leave at the end of the designated 12-month period.
Rate of Compensation for Leave. Under the Act, employees must be paid their standard hourly rate for all hours of paid leave taken by the employee. For tipped employees engaged in an occupation in which gratuities or commissions have customarily and usually constituted and have been recognized as part of the remuneration, this rate equals at least the full minimum wage for the jurisdiction where employed.
Pay at Termination. The Act does not require employers to pay out accrued but unused paid leave hours upon separation, unless an employer’s policy provides otherwise.
Notice. Employers may require employees to provide notice at least seven days in advance of the absence when the leave is foreseeable, and as much notice as practicable for leave that is not foreseeable. Employers may not require employees to find their own replacement to cover hours during which the employee will be absent and taking paid leave. The Act does not address scenarios under which an employer may deny requested paid leave, such as undue hardship or operational interference.
Employers must also provide their own notice to employees. Specifically, employers must conspicuously post a state-prepared notice summarizing the requirements of the “Paid Leave for All Workers Act.” The Illinois Department of Labor has not yet made the notice publicly available.
Existing Paid Leave Policies May Satisfy Requirements. The Paid Leave for All Workers Act does not require employers who already have paid leave policies that meet the requirements of the Act to provide any additional leave, but employers are not discouraged from adopting a leave policy with terms which are more generous those set forth in the Act.
Penalties. Retaliation related to accrual or use of paid leave hours is expressly prohibited. Employers who violate the Act may be subject to a $2,500 monetary penalty for each separate violation. The Illinois Department of Labor is charged with enforcement of the Act; at this time there appears to be no provision allowing wronged employees to initiate their own private actions for paid leave violations.
Ballard Spahr’s Labor and Employment attorneys routinely assist employers in interpreting new leave laws and in developing compliance measures, including policies.