By: HUB's Absence Management Team

On March 13, 2023, the Illinois Governor signed into law Illinois Senate Bill 208, the Paid Leave for All Workers Law. The law which will become effective January 1, 2024 will provide 40 hours of paid leave for any reason for Illinois employees.

Overview: The Paid Leave for All Workers Law

Illinois Senate Bill 208 was introduced to allow workers to take paid time off for any reason. The law is similar to Maine and Nevada which provides a much more generous approach to paid time off. While many states and jurisdictions have paid sick leave, the Illinois greatly expands the definitions under traditional paid sick time programs.

Covered Employers and Employees

The law applies to all employers in Illinois, including units of state and local government and government agencies. The law excludes school districts organized under the School Code or park districts organized under the Park District Code.

All employees under a covered are employer are eligible for the benefit with the following exceptions:

  • Employees as defined in the federal Railroad Unemployment Insurance Law or the Railway Labor Law
  • Temporary college or university student-employees
  • Certain short-term employees of an institution of higher learning
  • Employees working in the construction industry who are covered by a collective bargaining agreement (CBA)
  • Employee who are covered by a CBA with an employer that provides services nationally and internationally of delivery, pickup, and transportation of parcels, documents, and freight.

It does not affect the validity or change the terms of a valid CBA in effect on January 1, 2024. Following that date, the requirements of the Law can be waived in a CBA if the waiver is set forth explicitly in the agreement in clear and unambiguous terms.

Intersection with Chicago and Cook County Paid Sick Leave

The legislation requires employers not covered by these ordinances to provide paid leave. The legislation does not preempt either of these in force laws. Instead, it states that the legislation “shall not apply to any employer that is covered by a municipal or county ordinance that is in effect on the effective date of the legislation that requires employers to give any form of paid leave to their employees, including paid sick leave or paid leave.”

For any local ordinances passed or amended on or after January 1, 2024, an employer must comply only with the provisions of the local ordinance to the extent that it provides benefits, rights, and remedies that are greater than or equal to the benefits, rights, and remedies afforded under the legislation. In short, the legislation sets a new baseline, but the local ordinance can raise the ceiling.

How the Benefit Works

On January 1, 2024, or when and employee is hired, whichever is later, employees will accrue one hour of paid leave for every 40 hours worked. Exempt employees are presumed to work 40 hours per workweek for the purposes of accrual unless their regular workweek is less than 40 hours, in which case paid leave accrues based on that regular workweek.

Employees can accrue up to 40 hours in a 12-month period. A 12-month period may be any 12-month period designated by the employer in writing at the time of hire. Employees may carry over up to 40 hours of paid leave from one 12-month period to the next.

Employers may choose to grant (or “frontload”) 40 hours of paid leave on the first day of the 12-month period in lieu of accruing time. If the full 40 hours is frontloaded at the beginning of the 12-month period, carryover from year to year is not required, and any unused leave will be forfeited at the end of the 12-month period.

Employees cannot use their paid leave until they have completed ninety calendar days of employment, or March 31, 2024, whichever is later.

Documenting Paid Leave

Employers may require up to seven days’ advance notice of a foreseeable need for paid leave. If leave is unforeseeable, employees need only provide notice as soon as practical. An employer that requires advance notice for unforeseeable absences must adopt a written policy that contains procedures for the employee to provide notice. Despite these advance notice requirements, however, the law does not appear to provide any vehicles to determine if this advance notice has been met.

Unlike most paid leave laws, the law expressly prohibits employers from requiring documentation or certification to support an employee’s need for leave. In other words, employers are required to take the employee’s word that leave is needed, regardless of the reason.

Using Leave

Employers may set a reasonable minimum increment of use for paid leave under the law, but it cannot be more than two hours. If an employee’s shift length is less than two hours, the minimum increment of use will be the length of the employee’s scheduled shift.

Employees must receive their hourly rate of pay when using paid leave, which does not include commissions or gratuities. The law does not mention how bonuses are handled as it relates to total compensation. An employee’s hourly rate of pay for leave under the law cannot drop below the applicable minimum wage where the employee works.

Using Existing Leave Policies

Employers may use other types of paid leave policies to satisfy their obligation to provide paid leave under the Law. Employer is “not required to modify their current policies if it satisfies the minimum amount of leave required under the Law and the employee is permitted to take paid leave for any reason. If current policies meet the minimum time requirement but not the reason requirement, then policies should be updated accordingly.

Next Steps

Based on how other paid leave enforcement agencies have interpreted similar statutory language, it is more likely that the Illinois Department of Labor (IDOL) will view this language as the condition under which employers can use pre-existing, more generous policies to comply with their new obligations than any type of exemption to compliance requirements under the Law.

While the above is an overview of what is in the legislation, we expect that the Illinois DOL will provide additional rules and guidance surrounding how to address employers with current policies.

For employer’s who choose to use another type of vacation/time off bank to satisfy its obligations under the Law, any unused leave must be paid out upon separation from employment, consistent with the requirements under the Illinois Wage Payment and Collection Law.

Since the new law does not go into effect until January 1, 2024, employers should begin to review their paid sick leave policies for employees who work in Illinois to determine if they are required to update their policies. It is recommended that employers hold off on any changes until the IL DOL provides comments on how the law is to be interpreted.

HUB’s Workforce Absence Management (WAM) team will continue to monitor for any updates or changes from the IL DOL surrounding this issue.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s specific circumstances. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your organization’s particular needs.