New Illinois Leave Law: Paid Leave for Any Reason
Illinois will become the third state (including Nevada and Maine) to mandate employers to provide employees with paid time off for any reason. The new law, which we summarize below, will become effective in 2024.
The Law Reaches Most Employers, But Does Exempt Those Subject to Local Leave Ordinances.
The Act covers all individual, public, and private employers that have one or more employees in Illinois, except certain federal and state employers.
Notably, the Act also exempts employers that are covered by a “municipal or county ordinance that is in effect on the effective date of this act that requires employers to give any form of paid leave, including paid sick leave or paid leave.” Thus, the law would not apply to employers subject to the Cook County or Chicago paid sick leave ordinances. Further guidance will need to be issued to help employers otherwise subject to this exemption understand whether and how the new leave requirements may apply when they utilize a hybrid working model that has employees working inside and outside exempted jurisdictions.
The Law Covers Most Employees, Although Several Exceptions Apply.
The Act covers “all employees. . . in this state” and “shall include any individual permitted to work by an employer in an occupation,” but it does contain certain specific exceptions (e.g. certain unionized workers). Further guidance will also need to be issued in the remote work context to understand when an employee is considered working in Illinois.
The Law Provides for Up to 40 Hours of Paid Leave in a 12-Month Period.
At its core, the law provides employees up to 40 hours of paid leave annually, which employees may use for any reason.
The leave accrues at the rate of one hour for every 40 hours worked, but employers may choose instead to frontload the leave.
Employers have the ability to designate a 12-month annual leave period. For example, it may be the calendar year, the employer’s fiscal year, an employee’s employment anniversary, or whatever 12-month period the employer designates. Whatever the leave period, employers must communicate it to employees at the time of hire, and the employer must document in writing any changes to this period and provide it to employees.
Employees may begin taking leave 90 days after they begin employment or 90 days after the law is effective, whichever date is later.
The Law Utilizes Employee-Friendly Use Provisions.
The law does recognize that an employer may require its employees to follow its leave notice procedures, but it also places constraints. For example, employers may only require up to 7 days’ advance notice of the need for leave where such need is foreseeable (if the leave is unforeseeable, employees should provide notice as soon as practicable). The law also limits an employer from requiring an employee to use more than 2 hours of leave at a time. The law also allows employees to use this new leave before using any other leave afforded to them, but says nothing about concurrent leave use.
Further, the law does not require the employee to disclose the reason for leave to the employer. But, it also goes further: employers may not ask for documentation or certification as proof or in support of the leave. It also prohibits employers from requiring an employee to find a replacement while the employee is on leave.
There are a number of potential disruptions to an employer’s operations, particularly because notice is limited to only 7 days and employees are permitted to use as little as 2 hours of leave at a time. The law says nothing about how employers should handle conflicting requests from multiple employees for which they cannot accommodate, an employer’s need for blackout periods, or requests that may cause other serious operational issues. The law also does not address an employer’s ability to discipline an employee, nor does it address or otherwise limit an employee’s ability to utilize leave under false pretenses.
The Law Has Differing Carryover and Unused Payment Requirements.
Employers adopting an accrual based leave policy must permit employees to carry over unused leave year over year, but they can cap leave use at 40 hours annually. Employers using the frontload method need not permit any carryover.
At year-end, employers need not pay out the employee for any unused leave. Likewise, employers need not pay out unused leave at separation. However, employers who credit leave under this law to another paid time off or vacation account, are required to pay out such unused time consistent with Illinois’s wage and hour law.
The Law has Several Notice, Posting and Recordkeeping Requirements.
Employers who already maintain leave policies need only review (and, as necessary, conform) those policies to ensure they meet the law’s minimum requirements. Employers without such policies will have to implement new ones.
The law imposes a recordkeeping obligation, which requires employers to preserve records that show hours worked, leave accrued, leave taken, and the remaining balance of available leave for three years. Employers must make these records available to the IL DOL upon request.
Employers must also post a notice describing the law’s requirements and procedures for filing a charge. The IL DOL will prepare and publish this notice.
Administration and Enforcement.
The IL DOL is responsible for the law’s administration and enforcement. There is no private right of action. Employers who violate the law are subject to damages (including compensatory damages), attorneys’ fees and costs, a civil penalty of up to $1,000 per employee (paid to each affected employee), a civil penalty of $2,500 per violation (paid to the IL DOL), and equitable relief. If an employer fails to post the required notice, the law imposes a penalty of $500 for the first violation, and $1,000 for any subsequent violations.
Illinois employers should soon begin reviewing their existing leave policies and consider necessary changes. Employers should also consider how they will track and administer this leave – for example – if they will track this leave separately or integrate it with other leaves. Mintz’s Employment team will continue track developments, including updating this post with information from the IL DOL’s guidance or regulations if and when published.