By: Jerry Redmond, Esq., Associate General Counsel & Senior Consultant
The Illinois Paid Leave for All Workers Act (Act), which requires employers to provide Illinois employees with earned paid leave, went into effect on January 1, 2024. Under the Act, Illinois employees will be entitled to accrue one hour of paid leave for every 40 hours worked, up to a minimum of 40 hours of leave in a 12-month period. Employees will be able to use this paid leave for any reason after 90 days of employment. Additionally, employers may use their pre-existing paid time off (PTO) policies for compliance without modifying that policy if it: (1) provides employees with at least 40 hours of paid leave per year, which (2) can be used for any reason.
How much paid leave are employees entitled to under the Act?
Eligible employees who work in Illinois are entitled to earn and use up to a minimum of 40 hours of paid leave during a 12-month period. Eligible employees are entitled to accrue 1 hour of paid leave for every 40 hours worked, up to a minimum of 40 hours of paid leave (employers can choose to provide more than 40 hours). Alternatively, employers can “frontload” the 40 hours (or a prorated amount, as applicable) on an employee’s first day of employment or the first day of the 12-month period. Paid leave must begin to accrue (or must be frontloaded) at the commencement of employment or on the effective date of the Act, whichever is later.
What is the 12-month period?
The 12-month period can be designated by an employer in writing at the time of hire. Changes can be made to the designated 12-month period if the employer: (1) provides advance written notice to employees prior to any change; (2) does not reduce the eligible accrual rate or paid leave available; and (3) provides employees with documentation of the balance of the hours worked, paid leave accrual taken, and the remaining leave balance.
Does unused leave carryover?
Unused accrued paid leave must carryover; however, employers are not required to provide more than 40 hours of paid leave in a 12-month period, unless the employer chooses to do so. Frontloaded leave does not have to be carried over.
For which reasons can employees take leave?
Paid leave may be used by an employee for any reason of the employee’s choosing. Employees cannot be required to provide their employer a reason for leave or documentation in support of the leave. Further, an employee may choose whether to use leave provided under the Act prior to using any other leave provided by the employer or pursuant to state law.
How much must employees be paid during their leave?
Employees must be paid their hourly rate of pay during the leave. However, if an employee is in a position in which gratuities or commissions customarily have been recognized as a part of their remuneration, their employer must provide them with at least the minimum wage of the applicable jurisdiction when leave is taken under the Act.
Must employers continue healthcare benefits during the leave?
Yes, employers must maintain coverage for the employee and any family member under any group health plan for the duration of the leave under the same conditions that would have been provided if the employee were not on leave. Employers must notify employees that they are still responsible for contributing any employee share of the cost of coverage.
When can employees start taking leave?
Employees are eligible to begin using the paid leave after 90 days of employment or 90 days following the effective date of the Act, or whichever is later.
Can employers require employees to provide notice before they take leave?
An employer can implement a “reasonable” paid leave notification requirement if the following conditions are met:
- If the use of paid leave is foreseeable, the employer may require the employee to provide notice within 7 calendar days before the leave is to begin.
- If the use of paid leave is not foreseeable, the employer may require the employee to provide notice as soon as practicable after the employee is aware of the need for leave. If an employer requires this, they must provide a written policy that contains procedures for the employee to provide such notice.
- Employers must provide a written notice of the paid leave policy notification requirements.
- Employers cannot require that an employee search or find a replacement worker to cover hours during the time the employee is taking leave.
Are employers required to compensate employees for unused paid leave upon the separation of employment?
No, employers are not required to provide financial or other payment to an employee for unused leave upon the employee’s termination, resignation, retirement, or other separation of employment. However, if an employer uses their existing PTO policy to satisfy the requirements of this paid leave, all unused time must be paid out at the end of employment in accordance with state law that governs vacation time and PTO policies.
How is accrued leave treated when an employee is rehired or transferred to another division by the same employer?
If an employee is transferred to a separate division, entity, or location, but remains employed by the same employer, the employee is entitled to all paid leave previously accrued. If an employee is rehired within 12 months of a separation of employment, the employer must reinstate any unused accrued paid leave.
Are employers required to notify employees of leave entitlements under the Act?
Employers are required to post a notice summarizing the requirements of the Act in a conspicuous place at worksites. Employers must also include this notice in a written document or employee manual/policy (if the employer has one). The Illinois Department of Labor and Industry offers free, downloadable workplace posters in English, Spanish, and Polish.
What records must employers keep?
Employers must retain records documenting hours worked, paid leave accrued and taken, and remaining paid leave balances for each employee for at least three (3) years (and for the duration of any pending claim). Employers must allow the Illinois Department of Labor access to these records upon their request.
If an employer provides paid leave on an accrual basis, they must provide employees with the amount of paid leave used and accrued upon their request.
Recommended Employer Action
Employers may want to do the following in preparation:
- Determine whether to provide leave entitlements on an accrual basis or by frontloading the requisite hours. If providing leave on an accrual basis, determine how to track accruals and how to provide employees with their accrual balances upon any request.
- Determine whether to require employees to provide reasonable notification of the need for leave, and if required, develop a policy for the notification process.
- Develop a plan to retain records that document hours worked, paid leave accrued and taken, and paid leave balances for each employee.
- Plan to post the required notice at worksites and incorporate it into written materials or any employee handbook. Determine if the notice is needed in another language (i.e., if a significant portion of employees are not literate in English).
If you are an employer with additional questions on this topic or any other HR topics, we are here to assist you and your organization. Feel free to call our HR Helpline at 855-873-0374.
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