The Governor is expected to sign and enact the Paid Leave for All Workers Act (the “Act”), which will go into effect January 1, 2024. Senate Bill 208, which creates the Act, was passed by both houses on January 10, 2023 and the Governor has said he will sign the bill. The Act establishes 40 hours (5 days) of minimum paid leave per 12-month period for all workers (full and part time) in Illinois, which employees can take without penalty. This Act applies to all employers in Illinois, including local governments, except for school districts and park districts. However, if a municipality has an ordinance or adopts an ordinance before January 1, 2024 providing any form of paid leave for its employees, then they do not have to comply with the Act (and the ordinance will control).
The Act states that its provisions are to be “liberally construed in favor of providing workers with the greatest amount of paid time off from work and employment security.”
A copy of the Act can be found here.
Mechanics of Paid Leave
Every employee in Illinois is entitled to earn and use up to 40 hours (5 days) of paid leave during a 12-month period. Employees will accrue 1 hour for every 40 hours of work. Thus, part-time employees will be able to earn paid leave on a pro-rated basis. Critically, if there is a municipal or county ordinance requiring employees to receive any form of paid leave, including sick leave, then this legislation does not apply to this employer. However, any municipal or county ordinance passed or amended after the effective date of the Act must provide benefits that are equal to or greater than the benefits under this Act.
The paid leave does carry over from one 12-month period to another unless the employer makes the minimum hours of paid leave (40 hours) available to an employee on the first day of employment or the first day of the 12-month period. In other words, by making the paid leave available at the earliest opportunity, the employer appears to be able to “opt out” of the carryover requirement. If paid leave is going to carry over annually, nothing in the Act requires an employer to provide an employee more than 40 hours of paid leave in the 12-month period. If an employee leaves their role the employer is not required to compensate the employee for the value of unused leave time; employee must use it or lose it. This differs from vacation time, in that if an employer provides vacation time, once that employee leaves the employer, they must pay the employee the value of any earned but unused time. That is not the case with this paid leave. However, if the employer credits the time under the Act to an employee’s paid time off bank or employee vacation account, then any unused paid leave shall be paid to the employee upon the employee’s separation to the same extent as vacation time is required to be paid out under applicable law. The right to paid leave cannot be waived by the employee unless it is done within the context a collective bargaining agreement, as discussed below.
This policy should be implemented within 90 days of the effective date of this Act (January 1, 2024) or the commencement of employment, whichever is later.
Employees do not need to give an employer a reason as to why they are taking this leave and should be paid their hourly rate of pay for the leave. Employees will be entitled to begin using paid leave 90 days following the commencement of their employment or 90 days following the effective date of the legislation (January 1, 2024), unless the employer elects to make it available on the first day of employment or the first day of a twelve-month period. Employees may be required to give seven days’ notice before the leave is to begin if the absence is foreseeable, and that requirement is set forth in a written policy. However, if the paid leave under this Act is not foreseeable then the employee should provide notice as soon as is practicable. It is not the responsibility of the employee to find coverage for their work but rather the responsibility of the employer. Employees may use their leave in as small as 2-hour increments. Employees can choose to use the leave under the Act prior to using any other leave provided by the employer or State law.
Employers must make and preserve records documenting paid leave accrued and taken as well as remaining leave time for a minimum of three (3) years. The Department of Labor must be able to have access to these records at reasonable times during business hours.
Employers must keep and post in a conspicuous place a sign detailing these new rights and the new policy must be detailed in an employee handbook or manual. The language for this new policy and signage will be developed by the Department of Labor.
No employer may threaten to take or take any adverse action against an employee who exercise or attempts to exercise this right. Employers must not disadvantage employees who attempt to make use of these rights, including with respect to evaluations, hiring decisions or decisions relating to promotions.
Enforcement of Act
The Department of Labor is tasked with enforcing this Act. Employees have within three (3) years to make a claim for an alleged violation. Employers are liable for the cost of action including witness fees and attorneys’ fees, a penalty of between $500 to $1000, compensatory damages, and any other equitable remedies.
Additionally, any employer that violates this Act, aside from the notice requirement, or any rule adopted by the Department to enforce this Act shall be subject to a civil penalty of $2,500 for each separate offense that will go towards the Paid Leave for All Workers Fund.
Impact on Collective Bargaining Agreements
The requirements under the Act will not affect the validity or change the terms of collective bargaining agreements in effect on January 1, 2024. However after that date, the terms of the Act will apply unless explicitly waived in the collective bargaining agreement. Any such waiver must be explicit and in clear and unambiguous terms.