By: Samuel J. Castree, Jr., Senior Vice-President & General Counsel, Staff Management, Inc.
Effective January 1, 2024, the Paid Leave for All Workers Act will provide almost all employees who work in the State of Illinois up to 40 hours of annual paid leave to be used whenever and however they want. A brief summary of significant provisions include:
Covered Employers and Employees. Employees of almost all private and public employers are covered by the Act, whether they are full-time, part-time, temporary, or other designation. It’s easier to list who is not covered. Excluded employers are:
School districts organized under the Illinois School Code;
Park districts organized under the Illinois Park District Code; and
Employers covered by a municipal or county ordinance in effect on the effective date of the Act requiring employers to provide paid leave to their employees, including paid sick leave or paid leave.
Excluded employees include:
Employees covered by a bona fide collective bargaining agreement in the: construction industry; and national and international parcel, document, and freight delivery and pickup services industry.
Employees covered under the Railroad Unemployment Insurance Act;
Student workers attending a college or university who work for the college or university on a temporary and less than full-time basis;
Short-term employees employed by an institution of higher education for less than two consecutive calendar quarters during a calendar year, and who do not have a reasonable expectation they will be rehired by the same employer for the same service in a subsequent calendar year.
Leave Benefit. Employees earn and can use one hour of paid leave per 40 hours worked. The Act caps earning and using leave at 40 hours (although employers can be more generous), in a 12 month period designated by the employer. Leave can be accrued or frontloaded.
Accruing Leave. Employee’s start accruing leave on the first day of employment. Employers using the accrual method must allow employees to carry over unused paid leave; however, an employer need not allow an employe to use more than 40 hours of paid leave for an employee in the designated 12-month period.
Frontloading Leave. Alternatively, employers can front load an employee’s entire leave benefit on the employee’s first day of employment, and subsequent first day of the designated 12-month period. Employers who front load leave are not required to carryover an employee’s unused paid leave.
Use of Leave. Employees have an unfettered right to use leave “for any reason of the employee's choosing.” An employee has the right to choose whether to use paid leave under the Act before using any other paid or unpaid leave provided by the employer or State law. Employees also have the right to decide how much paid leave they need to use; however, an employer may establish a minimum paid leave increment not to exceed two hours per day. Although leave begins to accrue on the first day of employment, employers may choose to restrict employees from using paid leave until 90 days after the start of their employment.
Employee Notice. Employees may request paid leave either verbally or in writing in accordance with the “employer's reasonable paid leave policy notification requirements.” Such requirements may include seven days’ notice if the need for leave is foreseeable, or notice as soon as practicable if the need for is unforeseeable. An employer may not, however, require employees to provide a reason for the leave, nor require employees to provide documentation or certification in support of the leave.
Rate of Pay. Leave under the Act is paid at an employee’s “hourly rate of pay.”
Payment on Termination. Payment for unused leave upon termination of employment is not required, unless an employer provides paid leave as part of its vacation or paid time off policy as described below.
Interaction with Other Paid Leave. Paid leave under the Act can be separate from other paid leave an employer may offer, such as vacation, or paid time off. An employer may decide, however, to fulfill its obligations and offer paid leave as part of its vacation or paid time off policy (as long as those policies meet all other conditions for leave under the Act). In such cases, unused leave must be paid out upon termination like other vacation as required by the Illinois Wage Payment and Collection Act.
The Act does not necessarily require employers to provide a new category of leave, or more paid leave than they may already be providing. Many employers already have paid vacation, personal, or sick leave policies similar to what will be required by the Act. Some careful editing of existing policies to bring current plans into compliance may be all that is necessary. In other circumstances, more significant revisions or a new policy may be advisable.
The Act will certainly impact employers, especially those who currently have no similar paid time off policies, or who do not provide paid leave to part-time or other employees. January 1 will be here in the blink of an eye. Start your compliance efforts now.
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