New Illinois Law Mandates Paid Leave for Employees
The Illinois Paid Leave for All Workers (PLFAW) Act was passed by the Illinois legislature in January and was signed into law by Governor Pritzker on March 13, 2023. Effective January 1, 2024, it will require nearly all private sector employers in Illinois to provide employees a minimum of 40 hours of paid leave per year, which can be used for any reason. PLFAW makes Illinois only the third state in the country to mandate paid time off for any reason.
Here is a summary of the law’s key provisions:
- Virtually all employees must be provided paid leave at a rate of 40 hours per year:
- Employers already covered by the mandatory paid sick leave ordinances in Cook County or the City of Chicago will not be covered by PLFAW.
- The State of Illinois and units of local government are covered by PLFAW.
- School districts and park districts are not covered.
- Certain transportation and construction employees are not covered.
- Short-term and student employees of an institution of higher education are not covered; and
- PFLAW requirements may be waived via a bona fide collective bargaining agreement that includes a clear and unambiguous waiver.
- Employees may use the paid leave for any reason, and employers may not ask about the reasons for taking such leave.
- Employers may base the leave on an accrual method (one hour of leave for every 40 hours worked) or alternatively employers may “frontload” all 40 hours at the beginning of the leave year.
- This leave will carry over annually if the accrual method is used, but no carryover is required if employers frontload all 40 hours at the beginning of each year.
- The time off must be paid at the employee’s regular hourly rate of pay:
- Special rules apply for employees who earn tips and/or commissions, who must be paid the greater of minimum wage or their hourly rate.
- Exempt employees are deemed to work 40 hours per week for purposes of accruing PLFAW leave.
- If employers choose to use the accrual method (rather than frontloading the leave), then employees must begin to accrue at the start of employment or on the effective date of PLFAW, whichever is later.
- Employees may begin using the leave 90 days following the commencement of employment or 90 days after the effective date of PLFAW (1/1/24), whichever is later.
- Employer policies may:
- Provide for leave accrual or frontloading as noted above.
- Require reasonable notice for taking the leave (7 days for foreseeable leave but only as practicable for unforeseeable need for leave) (employers must have a written policy that contains procedures for any notice requirements); and
- Require that employees use this leave in increments not greater than 2 hours.
- Employers may not require employees to find a replacement worker to cover the hours during which an employee takes PLFAW leave.
- Employers must create and maintain records documenting hours worked, leave accrual (unless leave is frontloaded), and remaining PLFAW balances, and be prepared to confirm this information upon an employee’s request.
- Employers may not retaliate because an employee uses PLFAW leave or otherwise exercises his/her rights under the Act or consider an employee’s use of PLFAW leave as a negative factor in any employment action.
- Unlike vacation or other PTO that (pursuant to the Illinois Wage Payment and Collection Act) must be paid out upon an employee’s separation from employment, paid leave under PLFAW that is accrued but unused need not be paid upon termination.
- Employers must post a notice of PLFAW rights.
Next Steps for Employers
Illinois employers should begin now to plan for this new law. Many employers already have paid leave policies that provide at least 40 hours of leave per year. However, even employers that already provide PTO will want to consider updating their leave policies in light of PLFAW’s provisions. Please contact the author, or the Fox Swibel attorney with whom you usually work, to discuss any questions or for guidance on your organization’s leave policies and practices.
This article was written by Steven L. Brenneman who is the Chair of the Employment Law Group at Fox Swibel, and an editor of the Illinois Employment Law Letter.
He can be reached at [email protected].