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Illinois Employers Face New Paid Sick Leave Obligations

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Illinois will join Chicago and Cook County in requiring employers to provide paid sick leave to their employees. Once signed by Governor Pritzker, the Paid Leave for All Workers Act will become effective on January 1, 2024. The General Assembly declared that it was “in the public policy interests of the State for all working Illinoisans to have some paid leave from work to maintain their health and well-being, care for their families, or use for any other reason of their choosing.”

Who is covered?

All employees, including domestic workers, will be eligible for paid leave with limited exceptions. Exceptions include:

  • Employees covered by the federal Railroad Unemployment Insurance Act
  • Students working on a temporary part-time basis for their college or university
  • Short-term employees employed by institutions of higher education for less than 2 consecutive calendar quarters during the calendar year without a reasonable expectation of being rehired by the same employer for the same service in a subsequent calendar year
  • Employees working in the construction industry or providing transportation services nationally or internationally under collective bargaining agreements

Unlike many other employment laws, the new law includes the State and units of local government, any political subdivision of the State or units of local government and any State or local government agency. It does not include school districts organized under the Illinois School Code or park districts organized under the Illinois Park District Code.

What paid leave must be provided?

An employee working in Illinois will be entitled to earn up to a minimum of 40 hours of paid leave during a 12-month period. Interestingly, the paid leave may be used by the employee for any purpose as long as the paid leave is taken in accordance with the new law. The leave will accrue at a rate of 1 hour for every 40 hours worked up to the minimum of 40 hours.

What will be the frequency of use?

Employees will be allowed to determine how much paid time they wish to use but employers may set a reasonable minimum increment for the paid leave not to exceed 2 hours a day.

When must paid leave be made available to employees?

Paid leave will begin to accrue at the commencement of employment or January 1, 2024, whichever date is later. Employees will be able to begin using their paid leave 90 days after they start working or 90 days after January 1, 2024, again whichever date is later.

Employers will be able to frontload the minimum 40 hours of paid leave to the employees on the first day of their employment or the first day of the 12-month period. If an employer frontloads the paid leave, they will not be required to carry over paid leave from one 12-month period to the next and may utilize a “use it or lose it” policy.

The 12-month period may be any consecutive 12-month period designated by the employer in writing at the time of hire. An employer seeking to change the 12-month period must give notice to their employees in writing prior to the change and the changes may not reduce the eligible accrual rate and paid leave available to the employee. Should the employer change the designated 12-month period, it must provide the employee with documentation of the balance of hours worked, paid leave accrued and taken and the remaining paid leave balance.

How can employees use their paid leave and what notice will be required?

In a provision likely to cause anxiety to employers, employees may use their paid sick leave for any reason and do not have to provide a reason to their employers for the use of the leave. Employers will not be permitted to require documentation or certification as proof or in support of the leave. Also, employees may choose to use their paid sick leave prior to using any other leave provided by the employer or State law.

Employers will still be permitted to enforce a reasonable paid leave notification policy that requires their employees to provide an oral or written paid leave request.

  • If the leave is foreseeable, the employer will be permitted to require a 7-day calendar days’ notice
  • If the leave is not foreseeable, the employer will be permitted to require an employee to provide such notices as soon as practicable after the employee is aware of the need for the leave
  • If an employer changes its notification policy, it must notify the employees of the change within 5 calendar days

Employers may not require the employees to find a substitute or replacement worker.

Employees may not use more than 40 hours of paid leave in a 12-month period unless permitted by the employer.

Will employees be permitted to carry forward unused paid leave?

Employees shall be permitted to carry forward up to 40 hours of paid leave in a 12-month period. This is different from the Chicago or Cook County paid leave ordinances which allow employees to carry forward only one-half of the unused paid leave up to 20 hours.

At what rate will paid leave be paid?

Employers must pay for the leave at their employees’ hourly rate of pay. If a tipped employee, the employer shall pay at least the full minimum wage in the jurisdiction in which they are employed when the paid leave is taken.

Will the employer be required to payout unused sick leave at termination?

The new law will not require employers to pay out unused accrued paid leave at termination, resignation, retirement or other separation from employment unless the paid leave is credited to a vacation bank. In that scenario, the employer will be required to pay out the time at separation.

If an employee is transferred to a separate division, entity or location but remains employed by the same employer, the employee shall be entitled to all paid leave already accrued. If there is a separation from employment and the employee is rehired by the same employer within 12-months of the separation, the employer will be required to reinstate their previously accrued but untaken paid sick leave.

How does the new law impact employees covered by collective bargaining agreements?

The new law specifically provides that it will not interfere with, impede or in any diminish the right of employees to collectively bargain with their employers. Employees are permitted to waive the paid leave requirements of this Act in a bona fide collective bargaining agreement. The new law is not intended to affect the validity or change the terms of any collective bargaining agreement in effect on July 1, 2024.

What about Chicago’s and Cook County’s paid sick leave ordinances?

The new law expressly provides that it shall not apply to employers covered by a municipal or county ordinance that is in effect on January 1, 2024. If a local ordinance that provides paid leave is enacted or amended after January 1, 2024, it must comply with the new law or provide benefits, rights and remedies that are greater than or equal to the benefits, rights and remedies afforded under this Act.

Employers in a municipality or county that enacts or amends a local ordinance that provides paid leave after January 1, 2024, must comply only with the local ordinance so long as the benefits, rights and remedies are greater than or equal to the benefits, rights and remedies afforded under the new law.

What record keeping is required?

Employers will be required to maintain records for 3 years. Employers who provide leave on an accrual basis will be required to provide notice to their employees of their accrued and taken paid leave.

Do employers who already provide paid leave need to change their policies?

The new law provides that employers who allow their employees to use paid leave for any reason and provide at least as much paid leave as mandated by the Act will not need to modify their policy. Employers are encouraged to speak with employment counsel to verify their compliance with the new law.

Employers may take no adverse action against employees who exercise rights under the new law.

No employer may retaliate against their employees for requesting or taking paid leave or opposing any practice that the employee believes violates the new law or supports other employees’ exercise of their rights under the new law. Employers may not regard the use of paid leave when evaluating, promoting or disciplining their employees.

How should employers communicate the new law to their employees?

In a conspicuous place on their premises, employers will be required to post a Notice (to be prepared by the Illinois Department of Labor) and also provide written notice to their employees when they start work or within 90 days of January 1, 2024. This Notice will summarize the requirements of the law and provide information pertaining to the filing of a charge with the Illinois Department of Labor. Where an employer’s workforce is comprised of workers who are not literate in English, the employer is directed to notify the Department which will prepare a notice in an appropriate language.

What are the penalties for violating the new law?

The fine for failing to provide proper Notice is $500 for the first violation and $1,000 for subsequent violations.

An employer that otherwise violates the new law will be liable to the affected employee for underpayment, compensatory damages and a penalty of not less than $500 and no more than $1,000. The law also provides that employees may receive equitable relief, reasonable attorney’s fees, reasonable expert witness fees and other costs.

In addition, employers may be subject to a civil penalty of $2,500 for each separate offense. Any penalties collected from the employer that are not paid to the affected employees will be deposited into the Paid Leave for All Workers Fund, a special fund created in the State treasury dedicated to enforcing the Act.

Is there a private right of action?

There is no private right of action but employees will have three years to file a complaint with the Department.

When will the Department provide more guidance?

The Department is tasked with enforcing the new law. Part of their enforcement efforts will include developing Notices and crafting appropriate regulations.

HMB Legal Counsel will update you on the developments in this law and other employment law developments. Should you have any questions, we encourage you to reach out to Jeri Baran.


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