On January 1, 2024, the Illinois Paid Leave for All Workers (PLFAW) took effect, making Illinois the third state in the country (after Maine and Nevada) to require private employers to provide earned paid leave to employees to be used for any reason. Employers that already have paid leave policies that provide at least 40 hours of leave per year are not required to modify their policies, as long as the leave can be taken for any reason.
Key Requirements
The PLFAW requires employers to provide Illinois workers with a minimum of 40 hours of paid leave, or a pro rata number of hours, during a designated 12-month period. Employers can choose to frontload the leave on the first day of employment or the first day of a designated 12-month period or use an accrual method. Under the Act, leave accrues at the rate of one hour of paid leave for every 40 hours worked.
The Act deems exempt employees to have worked 40 hours in each workweek for purposes of the PLFAW Act accrual unless their regular workweeks are less than 40 hours.
Employees may use the PLFAW leave after 90 days on the job unless the employer allows them to utilize leave earlier.
Employees may determine how much leave to use, but employers may set a reasonable minimum of increment of no less than two hours per day.
The Act does not require employees to give a reason for taking leave. Employers are not permitted to require any documentation or certification of the need to take leave. However, employers may require up to seven calendar days’ notice of foreseeable leave if they have a written policy provided to employees outlining notice requirements and procedures. If the leave is not foreseeable, employees must provide notice as soon as practicable.
Rate of Pay
Leave under the PLFAW will be paid at the employee’s hourly rate of pay for the hours of paid leave he or she takes. An employee who is paid gratuities and commissions must be paid at least the full minimum wage in Illinois, or their hourly rate, whichever is greater.
Carry-over
Unused accrued PLFAW Act leave will carry over annually, but the employer will not be required to provide more than 40 hours of paid leave for an employee in the designated twelve-month period. Employers that choose to frontload the 40 hours will not be required to carry over unused paid leave to the next 12-month period.
Termination of Employment
The Illinois Wage Payment and Collection Act requires employers to pay out earned vacation time at the end of the employment relationship. However, the PLFAW Act expressly states that employers do not need to pay unused paid leave under the Act at the end of the benefit year or any other time, provided the employer has not credited PLFAW Act leave to an employee’s paid time off bank or employee vacation account. In other words, if paid leave under the PLFAW Act is separately tracked and separate from the employee’s vacation or other PTO account, it need not be paid out at termination. If, however, an employer maintains a single account of PTO for an employee and does not distinguish between leave provided under the PLFAW Act and leave provided under the employer’s policy, then the amount of leave attributable to the PLFAW Act must be paid out at termination. The Act also requires employers to restore the PLFAW Act leave of employees who leave their employers but return to the same employer within 12 months.
Records
The PLFAW Act requires employers to create records documenting hours worked, leave accrued and taken and remaining paid leave balances. These records must be maintained for at least three years, and employers must allow the Illinois Department of Labor (IDOL) access to the records. Employers that provide PLFAW Act leave on an accrual basis must provide notice of the amount of leave accrued or used by an employee upon request. Employers who fail to comply with the record-keeping requirements are subject to a penalty of $2,500 per offense.
Posting Requirement
Employers are required to post, where other notices are customarily posted, a notice (prepared by IDOL) summarizing the requirements of the Act and giving information on filing a charge. Employers that have workforces comprised of a significant portion of workers who do not read English are required to request a noce in the appropriate language from IDOL. Violations of the posting requirements could subject employers to a $500 penalty for the first violation, and $1,000 for each subsequent violation.
Retaliation
The PLFAW Act prohibits employers from taking adverse action against employees for:
- Exercising their rights under the PLFAW Act;
- Opposing practices the employee believes to be in violation of the Act; or
- Supporting others’ exercise of rights under the Act.
In addition, the Act prohibits employers from considering the use of leave under the PLFAW Act in making discipline, promotion or evaluation decisions.
Remedies
The IDOL is responsible for administering and enforcing the PLFAW Act. Employees may file complaints with the IDOL within three years of the alleged violation. Employers found to violate the Act are subject to actual damages, compensatory damages, attorneys’ fees/costs, expert witness fees and civil penalties, as well as being subject to equitable relief. The IDOL can conduct investigations and refer matters to hearing. The Illinois Attorney General may enforce collection of awards.
Exclusions
The Act does not affect the validity or change the terms of bona fide collective bargaining agreements in effect on January 1, 2024. However, after January 1, 2024, the requirements of the Act may be waived by a collective bargaining agreement only if the agreement includes a clear and ambiguous waiver. The PLFAW Act does not apply to:
- School districts or park districts;
- Students employed on a part-time, temporary basis by the college or university they attend;
- Short-term employees of higher education institutions who are employed for less than two consecutive calendar quarters during a calendar year without reasonable expectation that they will be rehired in a subsequent calendar year.
- Employees working in the construction industry covered by a bona fide collective bargaining agreement;
- Employees covered by a bona fide collective bargaining agreement with an employer that provides national or international services of delivery, pickup and transportation of parcels, documents and freights; or
- Employers covered by municipal or county ordinances in effect on January 1, 2024, that provide leave or paid sick leave;
- After January 1, 2024, any municipal or county ordinance enacted or amended must comply with the PLFAW Act or give greater protections to employees.
Darcy L. Proctor is a partner in Tressler’s Local Government Practice Group. Darcy concentrates her practice in the defense of local governments in all aspects of tort, civil rights liability and employment litigation. She also defends private sector employers across a variety of employment law issues. A seasoned litigator, Darcy has taken dozens of cases to trial in both state and federal court. Clients trust Darcy to provide them with the best defense possible in court based upon her proven record of successful results. She also counsels her clients with training seminars, educating on best practices and loss prevention strategies to mitigate liability.
Drew O’Donnell is an associate in Tressler’s General Defense Litigation Practice Group. Drew concentrates his practice in the areas of employment, tort and personal injury litigation. He provides both consultation and litigation services to corporate, insurance and not-for-profit clients.