Takeaways from the Illinois Paid Leave for All Workers Act

The Paid Leave for All Workers Act goes into effect January 1, 2024, positioning Illinois as the third state to mandate paid time off for all employees, regardless of the reason. This legislation underscores the state’s commitment to bolstering workers’ rights and ensuring access to vital benefits, fostering work-life balance and overall employee well-being.

We recently hosted a webinar reviewing the Act’s guidelines and offered best practices for implementation. In case you missed it, we have highlighted the following key takeaways below. Additionally, the Illinois Department of Labor (IDOL) has taken steps to address inquiries by publishing a series of FAQs on its website.

Who is Eligible

The Act encompasses nearly all employers, whether private for-profit or non-profit organizations. Likewise, the Act protects most employees, including full-time, part-time, and remote workers. There are some limitations within the new legislation; for instance, independent contractors are excluded from coverage. Employees covered by the Chicago or Cook County paid sick leave ordinances are also not covered.

Key Provisions

Under the Act, eligible employees can earn up to 40 hours of paid leave within 12 months. Employers can choose between accrual or “front-loading” methods to meet the Act’s requirements, with “front-loading” potentially including a “use-it-or-lose-it” policy. Employees with over 40 accrued hours can use only up to 40 hours within the 12-month period. Employers have the flexibility to determine the 12-month leave calculation period, with the requirement to provide proper notice if they decide to change it.

Key provisions to note include:

• Employees are entitled to take leave for any reason and cannot be compelled to provide reasons or documentation.
• Employers may only require up to seven days’ notice for leave if the leave is foreseeable.
  • If the leave is unforeseeable, employees only need to provide notice as soon as practicable.
  • This requirement should be clearly outlined in your PTO policy.
• Employers cannot set a minimum increment that exceeds two hours.

Benefits Coverage and Unused Leave

The Paid Leave for All Workers Act stipulates that employers must maintain individual and family coverage within group health plans during an employee’s leave. Notably, the Act does not mandate payouts for accrued, unused leave. Employers opting to utilize existing PTO policies to comply with the Act must align payouts for unused leave with established vacation or PTO guidelines while updating their policies accordingly. Employers should assess the implications of integrating existing PTO policies to fulfill the Act’s requirements, considering the potential impact on their workforce and organizational dynamics.

Maintaining Records

Employers are required to maintain meticulous records for each employee showing:

• Hours worked and, if applicable, accrued hours based on hours worked.
• The amount of paid leave earned and taken.
• The remaining paid leave balance.

These records must be retained for three years, given that employees have a three-year window to file claims for law violations. If an employee complains to the IDOL, this can trigger a comprehensive audit of ALL books and records.

Additionally, employers must prominently display a notice provided by the IDOL that outlines the Act’s provisions and offers guidance on how to file a charge. This notice must also be included in the company’s employee handbook.

Employer Prohibitions

Employers are prohibited from interfering with or altering an employee’s schedule to avoid providing paid leave. Any schedule changes must be demonstrated as necessary for business needs or per an employee’s request. Furthermore, employers are prohibited from retaliating against employees who exercise their rights under the Act, support others in exercising these rights, or oppose unlawful practices.

Employers cannot consider the use of paid leave as a negative factor in any employment decisions related to evaluation, promotion, discipline, or application of a no-fault attendance policy. Additionally, employees can’t be required to find replacements when taking time off.

Unionized Workers

Under the Act, paid leave can be voluntarily waived through a collective bargaining agreement, provided that the waiver is unequivocal and explicit in its terms. The Act does not extend its provisions to union employees in the construction industry or to union employees covered by a collective bargaining agreement with an employer engaged in national and international services for the delivery, pickup, and transportation of parcels, documents, and freight. These exemptions are key distinctions within the Act.

Employer Considerations

Simply having a PTO policy offering 40 hours of paid leave annually doesn’t automatically ensure compliance with the Act’s nuances. Employers are actively seeking strategies to mitigate financial and operational impacts while preserving employee morale, particularly in light of the Act’s intricate provisions. Multi-state employers are grappling with the challenge of navigating leave requirements across state lines. Nevertheless, employers are eagerly awaiting further guidance from the IDOL to address lingering questions.

Actionable Items

To ensure compliance with the Act, it’s imperative to be proactive. Begin by formulating a clear strategy for adherence to the Act’s provisions. You’ll want to ensure that your current payroll system is equipped to track the newly mandated leave. You should also adopt a written policy that aligns with the Act’s requirements or amend your existing policies well before January 1, 2024. Be sure to incorporate this policy into your employee handbooks and familiarize your managers with the new policy. Lastly, regularly monitor the Illinois Department of Labor’s website for updates, including the required poster to prominently display in your workplace, as part of your compliance efforts.