Illinois lawmakers passed the Paid Leave for All Workers Act, which was signed by Governor Pritzker on March 13, 2023 and will become effective on January 1, 2024. This new legislation is significant because it requires employers to allow paid leave for any reason or no reason at all. The only other states in the nation with type of mandate so far are Maine and Nevada.
The Legislative Purpose Behind the Act
The legislature's stated purpose for passing this legislation is "to establish a minimum paid leave standard for all workers in Illinois." By providing such a standard, the law hopes to increase employment and economic security for employees. It ia based upon the maxim of protecting the welfare, health and safety of all citizens of Illinois. It also states this this Act is not meant to discourage employers from continuing paid sick leave, paid holidays, or any other more generous paid time off than outlined in the Act.
Employee Rights Under the New Law
- Illinois employees are entitled to earn and use up to a minimum of 40 hours of paid leave during a twelve month period. The paid leave may be used for any purpose. The employee is not required to tell the employer why they need leave, or present documentation regarding the leave.
- Employee shall be paid their regular hourly rate for the leave.
- Paid leave accrues at the rate of one hour of paid leave for every 40 hours worked up to a minimum of 40 hours of paid leave or the greater amount if the employer provides more than 40 hours under policies already in place.
- Employees who are exempt from the overtime requirements of the Fair Labor Standards Act shall be deemed to work 40 hours in each workweek for purposes of paid leave accrual unless their regular workweek is less than 40 hours, in which case paid leave accrues based on that regular workweek.
- Employer cannot require employee taking leave to find a replacement to cover their missed hours.
- An employer may make available the minimum number of hours of paid leave, subject to the pro rate requirements provided in subsection (b), to an employee in the first day of employment or the first day of the 12 month period. Employers who provide a minimum number of paid leave hours on the first day of employment or the first day of the 12 month period, do not have to carry over paid leave from 12 month period to 12 month period and may require employees to use all of the leave before the end of the period.
- The 12 month period may be any consecutive 12 month period designated by the employer in writing at the time of the hire. Changes to the 12 month period may be made by the employer if notice is given to employees in writing prior to the change and the change does not reduce the eligible accrual rate and the designated 12 month period. The employer shall provide the employee with documentation of the balance of hours worked, paid leave accrued and taken, and the remaining paid leave balance.
- Employers with a paid leave policy in place before the effective date of this bill are not required to update the existing policy so long as it meets the minimum requirements of this bill and allows employees to take leave for any reason.
- Employers already under a municipal or county ordinance that requires them to provide paid leave for any reason are not impacted by this law to the extent that the rules in place already meet the minimum standards for this law as well.
- Employers can opt to provide a 40 hour lump sum of paid leave at the beginning of the 12 month period and also require employees to use all of the time within the specified 12 month period or else lose the time. The time does not carryover.
- Employees may choose how much time to use on a particular day, but employers can set minimum increments so long as it is not in excess of two hours per day.
- Employer may designate any 12 month periods it would like at the time of the hiring of the employee. Any changes to the allotted time period must be provided to the employee in writing and the employer must also provide the employee with a record of hours worked, paid leave accrued and used and the number of hours of paid leave that they have remaining.
Generally, an employee may not waive their rights to the benefits of this law. Any such attempted waiver is void as against public policy. The only exception to this general rule is in the case of a collective bargaining agreement. The Act will not impact collective bargaining agreements in effect on Jan.1, 2024. Collective bargaining agreements that go into effect after Jan. 1, 2024 may waive the requirements of the law, but only if the waiver is set forth in clear and unambiguous terms.
How Does an Employee Give Notice of an Intent to Take Leave Under the Act?
- An employee may request leave either by written or verbal means.
- An employer can require the employee to give notice of intended leave if:
- Employer may require an employee to give 7 days' notice before the leave begins if it is foreseeable.
- If leave is not foreseeable, then the employer can ask the employee to give notice as soon as practicable.
- Employers who wish to require notice should produce a formal policy and share notice preferences with employees as well as the protocol for how to give notice of upcoming leave.
Which Employers Are Subject to This Act?
The Act is construed broadly and covers a wide spectrum of employees, including domestic workers. The only excluded workers are those covered by the Railroad Unemployment Insurance Act or Railway Labor Act, some employees in higher education, and some independent contractors.
This Act is unique in that it specifically includes domestic workers and affords them protections under its provisions. A domestic worker is defined as, "a person who performs housekeeping, house cleaning, home management, nanny services, chauffeuring and household services in a private home. These workers also qualify for the 40 hours of paid leave per the 12 month period if they normally work at least eight hours per week or more in the aggregate each week. The eight hours accumulate in this manner even if they work in multiple households. All employers will then be mutually responsible for the accrued paid leave. If an employer requests proof of the eight hours per week, a signed statement by the domestic worker stating that they work at least 8 hours per week will be sufficient to overcome this barrier. The employer must submit such a request in writing and give the domestic worker at least 7 days to reply. If the signed statement is delivered to the employer, they cannot deny the paid leave.
Gratuities and Commissions
The Act contemplates those workers who have a base pay less than minimum wage, but routinely receive gratuities or commission. In this circumstance, the employer must pay at least full minimum wage for any paid leave time the employee takes off.
Temporary and Part-Time Workers
Employees are entitled to one hour of paid leave for every 40 hours they work.
Employers Who are Out-of-State
If an employer is out-of-state, but has remote employees in the State of Illinois the implications of the Act become a bit more complicated. Whether or not the Illinois Act will apply are determined on a case-by-case basis.
Unused Paid Leave
Under the new law, employers do not have any obligation to pay employees who retire, resign, separate, or are fired, any unused paid leave time. The only exception to this is if the money was credited to a paid time off bank or employee vacation account. In that case, under the Illinois Wage Payment and Collection Act, the employer must pay the amount of the earned time at the time the employment relationship comes to an end.
If an employee is transferred within the company, the employee remains entitled to all of the paid leave accrued before the transfer took place. Finally, if an employee leaves the company, but returns within the applicable 12 month period, they are entitled to any previously accrued paid leave that was yet unused before they left.
Providing Notice to Employees of the Change in the Law
Employers will be provided a form notice from the Illinois Department of Labor that will summarize the new provisions. This notice must be posted by the employer in a "conspicuous place" to which all employees have access and are likely to see it. If the business also employs a large number of employees who speak a language other than English, then it will be required to post the notice in the alternate language(s) as well. The employer can obtain the notices in various languages by requesting those from the Department of Labor.
The Act specifically mandates that employers refrain from taking adverse action or threatening employees who exercise their rights under this new legislation. Taking paid leave is protected conduct and employers may not retaliate against an employee who takes paid leave. Employers also may not use an employee's decision to take paid leave under the Act as a reason to give them a poor performance review, or take any other adverse employment action.
Next Steps for Employers
- Revise leave and vacation policies to reflect the new policies of the law by January 1, 2024.
- Inform and educate employees on upcoming changes in policy.
- Develop a system for tracking paid leave if one is not already in place.
The attorneys at Wood, Smith, Henning and Berman are following the developments and implementation of this law as it take effects on January 1, 2024. Please do not hesitate to reach out to a member of our team for legal guidance should you have any questions or concerns.