Global Compliance Desk – Illinois
Illinois: Mandatory Paid Leave for All Employees
Illinois Governor JB Pritzker made a historic move on March 13, 2023, by signing into law Senate Bill 208, or the “Paid Leave for All Workers Act.“ Effective January 1, 2024, this legislation grants all eligible Illinois employees the right to accrue and use paid leave over 12 months for personal reasons.
Currently, Illinois has no specific legislation that offers paid leave to employees for situations like illness, family emergencies, or personal time off. The introduction of the new law will offer employees greater flexibility and financial security, allowing them to manage personal matters and respond to emergencies without the additional worry of unpaid time off.
Illinois does provide personal sick leave benefits to employees under ‘The Employee Sick Leave Act (ESLA)’ which permits employees to use available sick leave benefits to care for family members. Personal sick leave benefits include any paid or unpaid time available to an employee under an employer’s plan or policy to cover an employee’s absence from work due to personal illness, injury, or medical appointment.
Duration of the Leave: An employee will be entitled to receive one hour of paid leave for every 40 hours worked up to 40 hours (i.e. 5 days) of paid leave beginning on January 1, 2024, or when employment begins (though employers may permit additional accrual).
Employees shall have complete autonomy to use their accrued leave ‘for any reason of their choice,‘ with no preset limitations, providing them with maximum flexibility and control over their time off.
Exempt employees are considered to have a standard 40-hour workweek unless their regular workweek is shorter, in which case paid leave accrues according to that specific workweek.
Eligibility Criteria of the Leave: The Act shall apply to all private employers in Illinois, as well as state and units of local government or any state or local government agency.
Usage of the Leave: Eligibility for taking leave begins 90 days after an employee’s start date or 90 days after January 1, 2024, whichever is later.
Employees can decide when and how much leave to use, but employers can set a reasonable minimum increment which shall not be less than 2 hours per day.
The employer shall have the right to set the leave period at their discretion and communicate the period in writing to the employee at the time of hiring. Any changes to the period are permitted if the employer notifies the employee in writing in advance. The change shall not mean a reduction in the rate of accrual or the total duration of the leave.
Carryover and Front loading of the leave: An employee shall have the option to carry over unused paid leave from one 12-month period to the next one. However, the Act does not mandate employers to permit employees to accumulate more than 40 hours of leave in 12 months.
Alternatively, employees shall be permitted to opt for a front-loading approach, wherein employees shall be allowed to “front-load” 40 hours of paid leave at the beginning of the 12-month period. Under this method, there shall be no requirement to carry over unused leave from one year to the next, and any remaining leave will be forfeited at the end of the 12 months, essentially implementing a “use it or lose it” policy.
If an employee is rehired within 12 months of separation, any unused leave shall be reinstated and made available for their use.
Termination of employment: Employers are not obligated to compensate employees for any unused paid leave upon their termination, resignation, retirement, or separation unless the employer has added this leave to the employee’s paid time off or annual leave balance.
Record and Notice Requirement: Employers must maintain records for each employee showing the employee’s hours worked; paid leave accrued and taken; and remaining paid leave balance. Records must be kept for at least 3 years and must be available for inspection by the Labor Authority.
Employers can request a notice of up to 7 calendar days before employees take paid leave, which can be given orally or in writing. In cases of unforeseeable leave, employees are only required to provide notice as soon as reasonably possible. If notice for unforeseeable leave is needed, employers must have a written policy in place that outlines the notification procedures for employees.
Employees may take paid leave for any reason and are not required to provide their employers with the reason for the leave or documentation or certification as proof or support of their leave. As a condition of taking paid leave, employers cannot require employees to search for or find a replacement to cover the hours during which they are out on leave.
Employers with leave policies: Employers offering paid leave policies that meet the minimum requirement (i.e. minimum of 40 hours) do not need to make adjustments if their policies grant employees the freedom to take leave for any reason at their discretion.
Take away – Illinois employers must take proactive steps to comply with the amendments before January 1, 2024. They must review and potentially revise their policies to align with the upcoming changes to the existing leave requirements.
