The Illinois legislature passed the Paid Leave for All Workers (PLFAW) Act on January 10th, 2023. The passing of this law makes Illinois the third state in the U.S. to require private employers to provide earned paid leave to employees to be used for any reason. Maine and Nevada are the other states who have implemented similar laws.
The act will take effect on January 1st, 2024, and will provide nearly all Illinois employees with a minimum of 40 hours of paid leave or a pro-rata number of hours throughout a 12-month period. Leave accrues at the rate of one hour of paid leave for every forty hours worked. In addition, the law will consider exempt employees to have worked 40 hours in each workweek for purposes of the PLFAW Act accrual unless their regular workweeks are less than 40 hours. It permits employees to use their leave after 90 days on the job unless an employer allows them to utilize leave earlier. Employers can set a minimum increment of no less than two hours per day.
The PLFAW Act does not require employees to provide a reason to their employer for taking leave. Employers will not be permitted to require documentation or certification of the need to take this leave. However, employers may require their employees to give at least seven days’ notice of foreseeable leave if they have a written policy that outlines the notice requirements and procedures. Foreseeable leave can include the following:
- Expected birth
- Placement for adoption or foster care
- Planned medical treatment for a serious health condition of an employee or family member
- Planned medical treatment for a serious injury or illness of a covered service member
Employees must provide notice of leave as soon as possible if leave is foreseeable.
Additional Considerations You Should Be Aware Of
Leave under the PLFAW Act will be paid at the employee’s hourly rate of pay for the hours of paid leave they take. If you have employees who make tips and commissions, they must be paid at least the full minimum wage for the jurisdiction, or their hourly rate, whichever is higher. Any unused accrued leave will carry over every year; however, employers will not be required to provide more than 40 hours of paid leave for an employee in the 12-month period. Should you allocate the 40 hours upfront, you will not be required to carry over unused paid leave for the following 12-month period.
As with many aspects of running a business, you must keep records documenting the following under the PLFAW Act:
- Hours worked
- Leave accrued and taken
- Remaining paid leave balances
These records should be kept for at least three years and allow the Illinois Department of Labor (IDOL) to have access to these records. If you don’t comply with the recordkeeping requirements, employers can face penalties of $2,500 per offense. Finally, employers must post a notice summarizing the requirements of this act. This should be posted in a common area where other workplace posters are hung. Should you not comply with the posting requirements, employers can face a penalty of $500 for the first violation and $1,000 for any other violations.
The law does not apply to the following:
- School districts or park districts
- Students employed on a part-time or temporary basis by the college or university they attend
- Short-term employees of higher education institutions who are employed for less than two consecutive calendar quarters during a calendar year without a reasonable expectation that they will be rehired in a subsequent year
- Employees working in the construction industry are covered by a bona fide collective bargaining agreement
- Employees covered by a bona fide collective bargaining agreement with an employer that provides national or internal services of delivery, pickup, and transportation of parcels, documents, and freight
- Employers covered by municipal or county ordinances in effect on January 1st, 2024, that provide for paid leave or paid sick leave
Start Preparing Now!
While a year may seem like a long time to get ready to ensure you comply with the new law by January 1st, 2024, it’s essential that you start preparing now. This will be a significant change for most business owners in Illinois. With ever-changing rules and regulations, it’s vital that you remain compliant. When you partner with GMS, we ensure you comply with all federal and state laws and regulations. In addition, when providing your employees with paid time off (PTO), we work with you to create a program that ensures your employees feel heard and valued. Allowing employees to take time away from work is essential to create a productive workplace.
Lisa Dassani, GMS' Internal HR Manager, reflected, "Research consistently shows the health benefits of taking time off, such as improved productivity, reduced levels of unscheduled absenteeism, lowered stress levels, and improved mental health. Time off helps employees reset, which in turn, results in fewer errors on the job. We encourage our employees to take time off and even require that they take at least two weeks off per year. GMS offers unlimited PTO to employees that have reached their fifth year anniversary."
Contact us today to learn more.