Illinois, a state known for its progressive policies, is set to make history as it becomes the third state, after Maine and Nevada, to mandate paid leave for any reason. Starting January 1, 2024, Illinois employees will have the right to earn and utilize a minimum of 40 hours of paid leave within a twelve-month period as determined by their employer. This groundbreaking legislation, known as the Paid Leave for All Workers Act (PLAW), is considered one of the most comprehensive leave laws in the nation.
Even if an employer is located in an area that has chosen not to implement a local paid leave law or ordinance, they are still obligated to adhere to the provisions set forth in the Illinois Paid Leave for All Workers Act.
Under this new law, all employees working in Illinois will be entitled to accrue and use at least 40 hours of paid leave annually. The accrual rate is set at a minimum of one hour for every 40 hours worked, ensuring that employees can accumulate their well-deserved time off.
It's important to note that exempt employees, who are not eligible for overtime pay, will be assumed to work 40 hours per week for the purpose of paid leave accrual. However, if their regular workweek is less than 40 hours, their paid leave accrual will be based on their specific workweek.
To simplify the process, employers also have the option to front load their employees' paid leave instead of tracking accruals. This means that employers can provide their staff with the full 40 hours of paid leave at the beginning of the benefit year. However, if this approach is chosen, employers may enforce a use-it-or-lose-it policy, whereby employees must utilize their paid leave before the end of the benefit year or risk forfeiting any unused time off. Alternatively, if the use-it-or-lose-it policy is not implemented, paid leave must carry over from year to year.
Employers who already provide paid leave benefits that meet the PLAW's minimum requirements are not required to extend additional time off.
During their paid leave, employees must be compensated at their regular hourly rate of pay, ensuring that they do not suffer any financial loss while taking time off for personal reasons or emergencies.
The PLAW also outlines specific guidelines for when employees can begin accruing and using paid leave. Employees are required to start accruing paid leave either from the commencement of their employment or from the effective date of the PLAW, depending on which is later. Similarly, employees can start using their paid leave no later than 90 days after the commencement of their employment or from the effective date of the PLAW, again depending on which is later.
The PLAW does not mandate the payout of unused leave, unless the leave is credited to the employee's paid time off bank or employee vacation account. However, it is important for employers to also take into consideration their vacation payout obligations under the Illinois Wage Payment and Collection Act.
To aid employers in understanding and complying with this groundbreaking legislation, the Department of Labor is currently in the process of developing comprehensive guidance, resources, and materials. These efforts aim to educate employees about their rights and assist employers in navigating the complex landscape of paid leave requirements. If you have any questions you are encouraged to reach out to the Illinois Department of Labor.
AdminAssist is here to support your company in navigating and staying ahead of crucial compliance matters.
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