The Illinois General Assembly recently passed the Paid Leave for All Workers Act (PLFAW), which will require most Illinois employers to provide paid leave to their workers. Governor J.B. Pritzker has indicated he plans on signing the bill into law shortly. Once passed, Illinois would be one of just three states—Maine and Nevada included—to require paid leave for any reason. Below is a brief guide to the bill’s most significant provisions.
What Does the Law Require?
The PLFAW mandates a minimum of 40 hours of paid leave for employees per 12-month period. The 12-month period may be a regular calendar year, or any other period set out in writing by the employer.
Employers may simply offer the 40 hours of leave to their employees up front as a lump sum, or they may institute an accrual system. If the latter, employees are to accrue at least one hour of paid leave for every 40 hours worked.
Workers who are “exempt” under the Federal Labor Standards Act (FLSA), meaning they are not eligible for overtime pay, will be seen as having worked 40 hours per each workweek. If their regular work hours are less than 40, however, they will accrue paid leave hours on a pro rata basis, according to their workweek.
The bill states numerous times that employees may use their paid leave “for any purpose” or “for any reason.” Employers are not permitted to ask for documentation before granting leave.
Businesses are not required to change their policies if they already offer paid leave that equals the minimum amount of leave guaranteed by the PLFAW and if employees can take that leave for any reason. Those employers may simply use their already existing leave policy to comply with the bill.
Employers are forbidden for retaliating in any way against employees who avail themselves of leave under the PFLAW. This means that employers may not negatively review workers or fail to promote them for taking their leave, and cannot use leave as a basis for meting out discipline. Businesses also may not change work days or work hours to avoid employees taking paid leave.
Employers are also prohibited from asking employees to waive their rights under this bill. Any such waiver is void under Illinois public policy.
Can Employees Carry Over Unused Hours?
If employers provide 40 hours of paid leave in a lump sum fashion, employees cannot carry over leave from one 12-month period to the next; they forfeit any unused days. If the employer operates on an accrual basis, employees may carry over up to 40 hours from one 12-month period to the next.
Employers are not required to pay out unused paid leave to a separating employee under the PLFAW. If an employer satisfied the PLFAW by using vacation time, however, it may have to pay the equivalent of unused time to a separating employee according to the Illinois Wage Payment and Collection Act (IWPCA).
Is Advance Notice Required?
Employees are not required to provide notice to their employers for taking paid leave under the bill. The bill does, however, permit employers to institute a mandatory notice period of up to seven calendar days. If employers establish a mandatory notice period, they must also have a written policy on notice requirements.
If an employee’s need for leave is unforeseeable, the bill requires that the employee give as much notice as one reasonably can. Employers may not require that an employee taking paid leave find a replacement; that burden rests with the employer.
What Are Employers’ Posting and Recordkeeping Obligations?
Employers must post a notice in the workplace that explains the PLFAW. The appropriate notice will be made available by the Illinois Department of Labor (IDOL). Businesses must also incorporate information concerning the PLFAW into a written employment handbook, policy manual, or some other written documentation.
Further, employers are required to maintain records indicating which employees have taken leave, how much leave they have taken, how much leave they have left, and their hours worked. These records must be maintained for at least three years.
Which Employers Are Covered?
The PWFLA pertains to most employers in Illinois, both public and private, with certain exceptions. Employees in most school districts and park districts are not covered by the bill, as well as workers bound by a collective bargaining agreement (CBA), especially those in the construction industry. Rail workers are largely exempted from the bill, as well as student-employees in institutions of higher learning.
Employers should note, however, that domestic workers are covered in the definition of “employee” in the PWFLA.
Does the PWFLA Affect the Law in Cook County and Chicago?
Upon enactment, the PWFLA is not meant to apply to employers subject to any municipal or county ordinances that provide any type of paid leave to employees, including paid sick leave. The PWFLA would only immediately apply to employers not covered by any such pre-existing laws.
From January 1, 2024, any new or amended local leave ordinances must establish paid leave benefits at least as generous as those implemented by the PWFLA.
The PWFLA therefore establishes a floor of paid leave requirements for workplaces that currently enjoy no paid leave. The bill also establishes a minimum requirement for new ordinances as well as existing ordinances at the time of any future amendments. Eventually almost all Illinois employers will be bound by the PWFLA.
What Are the Penalties for Violating the PWFLA?
The IDOL is charged with enforcing the PLFAW. Businesses that fail to properly abide by the PWFLA will owe the affected employee any underpayments, compensatory damages, and a penalty between $500 and $1,000. Employees will be entitled to attorneys’ fees and other costs of any legal action.
Employers will also owe a penalty of $2,500 to the State of Illinois. If an employer fails to post notice of the PWFLA in the workplace, it will face a fine of $500 for the first time, and $1,000 subsequently. Although the IDOL is primarily responsible for enforcement of the bill, the Attorney General of Illinois may also bring an action to enforce collection of penalties.
When Does the PLFAW Take Effect?
The bill is awaiting Governor Pritzker’s signature. Once signed into law, the PLFWA will take effect on January 1, 2024. Paid time will begin to accrue for current employees at that time, and for subsequent employees at the time of hire.
Employees must be able to start using their paid leave after 90 days of employment or 90 days after the effective date of the bill, whichever is later. Employers, however, have the choice to allow their workers to use paid leave before that time.
What Should Employers Do?
As this bill will almost certainly become law, employers can begin preparing themselves in a variety of ways. They should consider the following:
Updating written policies, including employment handbooks, to reflect the new requirements.
Establishing a written process for employees to request paid leave.
Putting into place a system for covering shifts for the occasional last-minute leave request.
Developing a system to maintain accurate employment records for employees.
Providing training to human resources departments and managers, or anyone who can approve leave requests.
As always, consult experienced employment attorneys if you have additional questions