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KAHRMA HR Off the Clock

    July 24, 2023


    Paid Leave for All Workers Act

    As of January 1st, 2024, a new Act will go into effect.  The Paid Leave for All Workers Act allows employees to use leave for any reason.

    Beginning January 1st or when employment begins (whichever is later), covered employees must accrue at least one hour of paid leave for every 40 hours worked, for up to 40 hours of paid leave for every 12-month period. 

    Definitions:

    An “employer” is any individual, partnership, association, corporation, limited liability company, business trust, state of Illinois, or employment and labor placement agency.

    An “employee” includes all individuals who work in Illinois, except individuals who meet the legal definition of an independent contractor and state and federal government employees.

    The Act does not apply to:

    • Employees as defined in the federal Railroad Unemployment Insurance Act or the Railway Labor Act
    • Temporary college or university student employees
    • Certain short-term employees of an institution of higher learning
    • Construction industry employees who are covered by a bona fide collective bargaining agreement (CBA)
    • Employees who are covered by a bona fide CBA with an employer that provides national and international delivery and transportation services for parcels, documents, and freight.

    Requirements:

    Employees are eligible to begin taking leave after 90 days of employment or 90 days after January 1st, whichever is later.  Employees determine when they use the leave and how much to use, but employers may set a minimum leave increment of up to two hours per day.  Employers must allow employees to earn and use up to 40 hours of leave during a 12-month period.

     Carryover and Front-Loading:

    Employers can choose between an accrual system or a front-loading system.  If the employer chooses the accrual system, paid leave will build over the course of 12 months.  The employer must allow employees to carry over all unused paid leave from one 12-month period to another.

    If the employer chooses the front-loading system, the employees will receive all 40 hours of paid leave on their first day of the 12-month period and this option does not require a carryover from year to year.  The employer would then enforce the “use it or lose it” policy that requires unused paid leave to be forfeited at the end of the 12-month period.

    Pay Requirements:

    Employees are paid their normal hourly rate of pay when utilizing their paid leave.  For employees who are paid gratuities or commissions as part of their pay, their pay rate will be at least minimum wage.  Employers are not required to pay unused paid leave upon an employee’s separation unless the employer has a PTO or Vacation policy that stipulates so. 

    Recordkeeping Requirements:

    Written notice of the Act must be posted in a conspicuous place at the workplace and in the employee handbook.  The notice must include:

    • The Illinois Department of Labor's (IDOL) prescribed notice regarding the Act.
    • If applicable, a notice that employees are responsible for paying their share of any health insurance to maintain coverage while on leave.

    Employers also must keep track of each employee’s showing:

    1. Number of hours worked;
    2. Number of paid leave hours accrued and taken;
    3. Remaining paid leave balance

    These records must be kept for 3 years.  Employers must also provide notice to employees within five calendar days after making any changes to its paid leave policy.

    Disclaimer:  I am not a lawyer, and this should not be considered legal advice.  You should seek appropriate counsel for your own situation.  And please note, this post is directed toward readers in the United States.  If you are conducting business outside the United States, I highly encourage you to find and understand your obligations regarding disclosure.

    Resources gathered from the IDOL, Venable, LLP, and Illinois General Assembly