Come 2024, Almost All Illinois Workers Will Be Entitled to Paid Time Off
11.02.23
Starting January 1, 2024, almost all Illinois employers who do not provide employees with at least 40 hours of paid time off, or those that limit employees’ use of paid time off for certain reasons, such as sick time, may need to modify their paid leave policies to comply with the Illinois Paid Leave for All Workers Act (“PLAWA”).
This alert provides a summary of some of the key provisions of PLAWA and answers to many commonly asked questions. Additional information is expected in the coming weeks as the Illinois Department of Labor (“Department”) plans to issue draft rules interpreting PLAWA before the new law becomes effective.
Key Provisions of PLAWA:
- Eligibility: Under PLAWA, all Illinois employees (with a few narrow exceptions) including full-time, part-time, temporary and seasonal, are eligible for paid leave regardless of the size of the employer.
- Accrual: Employees must accrue paid leave at the minimum rate of one hour for every 40 hours worked, up to a maximum of 40 hours per 12-month period. Employers can also frontload paid time off at the beginning of the 12-month. Accrual or frontloading must start on day 1 of employment or January 1, 2024, whichever date is later.
- Use of Leave: Employees must be permitted to use paid time off for any reason, including, without limitation, for illness, vacation, personal time off, to care for a family member, or to attend a funeral.
- Permissible Use Waiting Period: Employers may require employees to wait up to 90 days to use paid time off.
- Carryover: If an employer accrues paid time off under PLAWA, employees must be allowed to carryover all unused paid time off into the subsequent year. However, employers can cap use of paid time off to 40 hours per 12-month period.
- Payout Upon Termination: Employers are not required to payout paid leave provided under PLAWA at the time of separation.
- Notice and Documentation: Employers may require employees to provide seven (7) days’ notice before taking leave for reasons that are foreseeable, and reasonable notice for leave that is not foreseeable. Notice must be allowed to be provided verbally or in writing. Employees may also be required to provide documentation for absences exceeding three consecutive work days.
- Reinstatement: Employers must reinstate employees’ unused accrued paid leave if they are rehired within 12 months after separation.
- No Retaliation: An employer cannot retaliate against an employee for using paid leave under PLAWA.
- Record-keeping: Employers must maintain records of paid leave accrual and use for at least three (3) years.
Answers to Commonly Asked Questions
1. If an employer already offers 40+ hours of paid leave, does their policy need to comply with the other requirements of PLAWA?
If an employer’s existing policy provides at least 40 hours of leave in a 12-month period and employees can take that leave for any reason, the policy does not need to be modified. See Department FAQ #3,12. A sick leave policy providing at least 40 hours of leave would not comply with PLAWA if an employee could only take time off due to illness.
2. Many municipalities opted out of the Cook County Earned Sick Leave Ordinance.Can municipalities opt out of PLAWA? No. See Department FAQ #8.
3. Can an employer place restrictions on an employee’s use of leave under PLAWA?
Yes. Nothing in the law prohibits an employer from adopting a policy that establishes some parameters for taking leave, and limited reasons the employer may deny leave for operational necessity. The policy must be communicated to employees, applied equally to all employees and conform with other applicable state and federal laws. See Department FAQ #10.
4. At what increments can an employee take leave under PLAWA?
An employee may take leave under PLAWA at a minimum of two-hour increments, although an employer can allow an employee to take leave in smaller increments. See Department FAQ #11. This means that, if an employer requires employees to take leave in half-day increments, that policy would not comply (except as stated above in #1).
Employers may frontload PLAWA benefits for part-time employees at a pro rata amount consistent with the employee’s work schedule. However, if the employee works more hours than the employer anticipates, the employee is entitled to accrue more hours at a rate of one hour for every 40 hours worked, up to 40 hours for the 12-month period. On the other hand, if a part-time employee works fewer hours than anticipated, the employer cannot recoup used or unused frontloaded paid leave benefits. See Department FAQ #14.
6. How does accrual apply to employees who work more than 40 hours in a week, but who are exempt from overtime requirements of the Fair Labor Standards Act?For purposes of PLAWA, exempt employees are deemed to work 40 hours in each workweek if they regularly work 40 or more hours in a workweek. If an employee’s regular workweek is less than 40 hours, their paid time accrues based on the number of hours in their regular workweek. See Department FAQ #17.
An employer may only require an employee to repay borrowed accrued leave if that policy is disclosed in the employer’s written paid leave policy and the employee agrees to that policy in writing prior to taking any leave. All payroll deductions must comply with the requirements of the Illinois Wage Payment and Collection Act. See Department FAQ #18.
8. If an employer frontloads paid leave at the beginning of the 12-month period, an employee uses all of their leave before the end of the 12-month period and then quits, can the employer require the employee to repay the paid leave?No. Benefits that have already been provided may not be retroactively diminished. See Department FAQ #19.
9. How is paid leave under PLAWA treated under a collective bargaining agreement?Parties to a collective bargaining agreement may waive rights under PLAWA if the waiver is explicit and unambiguous. Pre-existing collective bargaining agreements that do not comply with PLAWA are grandfathered in for the term of the agreement and do not need to be modified to comply with PLAWA.
10. What rate of pay should be used for paid leave for tipped workers?Employees who earn tips or commissions must be paid by their employer at least the full minimum wage in the jurisdiction in which they are employed when paid leave is taken. This wage shall be treated as the employee’s regular rate of pay for purposes of PLAWA. See Department FAQ #23.
To ensure compliance with PLAWA, Illinois employers should immediately review and update their paid leave policies to align with PLAWA’s requirements, train management as to the requirements of PLAWA and communicate changes to paid leave policies to employees. All of these actions should be taken before PLAWA becomes effective on January 1, 2024. If you have any questions about this alert or require assistance in updating and implementing a paid leave policy for your Illinois workforce, please contact Amy M. Gibson or the Aronberg Goldgehn attorney with whom you regularly work.
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