The 102nd General Assembly adjourned on 1.11.23 after a consequential two years, with over 200 laws going into effect on 1.1.23 in addition to a flurry of activity during January’s lame duck session. Here are some highlights of issues affecting nonprofit employers and stakeholders across the state.
A coalition backed this significant bill. Illinois is only the third state in the country to pass similar legislation. Effective January 1, 2024; the requirements include those hired before 1/1/24, but the paid leave benefit begins 1/1/24 for previous hires.
- Requires all employers, including nonprofit employers, to provide their employees with a minimum of 40 hours (or five days) of paid leave during a 12-month period to be used for any reason using their hourly rate of pay (tipped workers at minimum wage). Employers may still choose to offer more than 40 hours paid leave.
- “Employer” is defined according to Sections 1 and 2 of the Illinois Wage Payment and Collection Act and includes State and units of local government, any political subdivision of the State or units of local government, or any State or local government agency, but excludes school districts organized under the School Code or park districts organized under the Park District Code and students employed temporarily and less than full-time by a college or university at which they are enrolled.
- The 12-month period may be any consecutive 12-month period designated in writing at the time of hire and is subject to change with notice (without reducing the benefit).
- There are no exceptions for small employers.
- There are no exceptions for part-time employees. (Thus, a part-time employee working 20 hours a week will take two weeks to accrue 1 hour of leave, earning 26 hours per year.)
- Employers may choose whether to award the benefit using an accrual method or an advanced-lump sum method.
- For the advanced lump-sum method, the full benefit of 40 hours of leave is made available on the first day of employment or the first day of the 12-month period. Employers that use the lump sum method are not required to carry over paid leave from 12-month to -12-month period and may require employees to use all paid leave prior to the end of the benefit period.
- For the accrual method, employers must carry over unused leave but are not required to provide more than 40 hours of leave in a 12-month period even in the case of carry over.
- Employers are not required to cash out the balance of an outgoing employee’s paid leave, regardless of the award method chosen.
- Employers may require 7 days’ notice to take leave for foreseeable events (with an exception provided for unforeseeable events).
- Employers may not require the employee to find a replacement worker to receive leave under this benefit and may not disrupt health coverage during paid leave.
- Employers must comply with posting requirements and maintain related records for 3 years.
- Employers cannot circumvent these requirements by transferring employees to a separate division, entity, or location or by separating employees and rehiring within the same 12-month period.
- Employers that violate the act would be subject to penalties, including fines and compensatory damages for the affected employee; related funds deposited into the paid Leave for All Workers Fund at Treasurer’s Office dedicated to enforcement.
Employee Benefits and Responsibilities
- Workers are eligible to begin earning paid leave on their first day of their employment and/or the first day of the 12-month period at a rate of one hour of leave for every 40 hours worked.
- Exempt employees are deemed to work 40 hours for purposes of accrual unless their regular work week is less than 40 hours, in which case paid leave accrues based on that regular work week.
- Employees may use their paid leave starting on the 90th day of employment; this provision is intended to offset the impact to employers with seasonal/temporary staff, both full and part time. (Employers may still choose to offer workers the use of paid leave before reaching 90 days of employment.)
- Employees are not required to cite a reason for leave and may use this benefit before any other leave provided by the employer or State law.
- If the use of leave is unforeseeable, an employee is directed to provide notice as soon as practicable.