Illinois Passes Expansive Paid Leave Legislation: The Paid Leave for All Workers Act

Authored by Ruth Binger with assistance from Sarah L. Ayers

One of the most expansive paid leave laws in the nation has passed in Illinois. When the “Paid Leave for All Workers Act” goes into effect on January 1, 2024, Illinois will be one of only a few states, including Maine and Nevada, that require employers to offer paid leave for any reason or no reason at all.

Who Does the New Law Apply To?

The Paid Leave for All Workers Act applies to all individuals and public and private entities that employ at least one person in the state of Illinois. However, federal government employers, school districts organized under the Illinois school code, park districts organized under the Illinois school code, and employers who have already started to allocate sick leave under the Chicago or Cook County Ordinance are exempt.

“Employees” are broadly defined as “[a]ny individual permitted to work by an employer in an occupation.” The new law applies to in-state employees and remote employees based in Illinois who work 40 or more hours in Illinois within a 12-month period.

Under the Paid Leave for All Workers Act, domestic workers are considered employees, but the following workers are not:

• Independent contractors,
• Workers who meet the definition of employee under the Federal Railroad Unemployment Insurance Act or Railway Labor Act,
• College or university students who work part-time at the institution they attend, and
• Short-term employees who work for an “institution of higher learning” for less than two consecutive calendar quarters and do not have an expectation to be rehired.

Another important note is that individual employees cannot waive their rights under the Paid Leave for All Workers Act. However, bargaining unit employees can waive the right in a “bona fide collective bargaining agreement” if it is explicitly stated in “clear and unambiguous terms” within the agreement. Employers who have union employees are required to implement the Paid Leave for All Workers Act, even if it is inconsistent with the terms of the collective bargaining agreement, if the bargaining agreement is not set to expire for several years.

What Does the New Law Require?

The Paid Leave for All Workers Act requires that covered employees can earn and use a minimum of 40 hours of paid time off within a 12-month period. Accrual happens at the rate of one hour of paid leave for every 40 hours worked. Employers who already satisfy the requirements of the act with paid time off and vacation policies do not need to allow for an additional 40 hours of paid time off.  Employers can implement the new law through two options:

1. They can elect to provide a block grant of 40 hours at the beginning of the 12-month period; or
2. They can have employees begin to accrue it at the start of their employment or the effective date of the new law, whichever is later.

Employers can designate the 12-month period, but the period must be communicated to employees at the time of their hire. If any changes to the period are made, the employers must provide documentation to the employee of (1) the balance of hours worked, (2) the paid leave accrued and taken, and (3) the paid leave remaining. Employees must be paid at their normal hourly rate for paid leave. In the event an employee’s normal payment includes gratuities or commission, then the paid leave must be paid at the full minimum wage.

After 90 days of employment in a 12-month period, employees are eligible to start taking their paid leave for any reason of their choosing. Employees can request to take paid leave orally, in writing, or in accordance with an employer’s reasonable paid leave policy. Employers may require a seven-day notice for foreseeable leave, as much notice as possible for unforeseeable leave, and set a “reasonable” minimum time increment for use of leave that does not exceed two hours per day. Employers cannot require employees to find coverage for their leave or require documentation or certification regarding the reason for the leave.

Covered employers are required to post a notice of the new law provided by the Illinois Department of Labor and maintain the notice within a written document or written employment manual or policy. Covered employers must also retain records for three years that reflect every employee’s (1) balance of hours worked, (2) paid leave accrued and taken, and (3) paid leave remaining. Additionally, paid leave records must be available to an employee upon request.

In the event of a violation of the Paid Leave for All Workers Act, employers can be liable for $1,000 in civil damages, any actual underpayment, compensatory damages, equitable relief as may be appropriate, reasonable attorneys’ fees, witness fees, and other costs of maintaining an action against the employer. Employers can also be subjected to a $2,500 fine for each separate violation. Employees who believe their employer has violated the new law can file a complaint with the Illinois Department of Labor within three years of the date of the alleged violation. Additionally, employers cannot threaten or take adverse action against an employee who exercises their rights under the new law. The law also explicitly prohibits consideration of the use of paid leave as a negative factor in discipline, promotion, or evaluation decisions.

Every Illinois employer should consult with an attorney to determine if it is a covered employer under the Paid Leave for All Workers Act and if so, to ensure that its policies and practices comply with this new law.

Posted by Attorney Ruth Binger with assistance from Sarah L. Ayers. Binger serves both emerging and mature businesses concentrating in corporate law, intellectual property and technology law, cybersecurity, digital media law, and labor and employment law. Her commitment to the success of small to medium-sized businesses, and her understanding of multi-faceted issues inherent in operations, are what distinguish Binger’s practice. Ayers is a law clerk with Danna McKitrick. She attends Saint Louis University School of Law and is a graduate of Westminister College.

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