News

On January 10, 2023, the Illinois legislature passed the Paid Leave for All Workers Act (the “PLFAW Act”). With Governor Pritzker announcing he looks forward to signing the bill, the PLFAW Act is set to take effect January 1, 2024. Illinois will join Maine and Nevada as the third state to require private employers to provide to employees earned paid leave that can be used for any reason.

Paid Leave Amount

Under the PLFAW Act, eligible employees generally will be entitled to earn and use up to 40 hours of paid leave during a 12-month period. Leave will accrue at the rate of one (1) hour of leave for every 40 hours worked. While unused leave will carry over year to year, employers are not required to provide more than 40 hours of paid leave in each designated 12-month period. Employers alternatively may frontload 40 hours of leave at the beginning of each 12-month period; if they do so, carryover will not be required.

How Leave Is Used

PFLAW Act paid leave “may be taken by an employee for any reason of the employee’s choosing.” Of note, an employer cannot require that an employee explain the reason for leave or provide documentation in support of it. If the need for leave is “foreseeable,” an employee will need to provide at least seven (7) days’ notice of the leave. If it is unforeseeable, employees will need to provide notice as soon as practical.

Separation from Employment

The law does not require payment for accrued but unused leave upon an employee’s separation from employment. However, if an employer credits PFLAW Act leave to an employee’s paid time off or vacation bank, then unused accrued leave may need to be paid out at separation. Further, if an employee is separated from employment and is rehired within 12 months by the same employer, any previously accrued but unused paid leave must be reinstated.

Enforcement and Penalties

The Illinois Department of Labor (“IDOL”) will be responsible for enforcing and administering the PLFAW Act, and employees can file complaints with IDOL within three (3) years of any alleged violation. Damages for violations may include actual damages, compensatory damages, employees’ costs and reasonable attorneys’ fees, equitable relief and civil penalties of $2,500 per offense.

Additional Employer Responsibilities

The PLFAW Act mandates preservation of relevant records for a period of three (3) years, and provision of the information to employees upon request.  Employers will also need to post a PLFAW Act poster and include a PLFAW Act notice in their handbooks.

Exceptions

The PLFAW Act will not apply to (1) employees as defined in the Federal Railroad Unemployment Insurance Act or the Railway Labor Act, (2) students working less than full time on a temporary basis at the college or university they attend or (3) short-term employees (less than two (2) consecutive calendar quarters during a calendar year) at an institution of higher education who do not have a reasonable expectation that they will be rehired by the same employer in a subsequent calendar year. School districts organized under the Illinois School Code and park districts organized under the Illinois Park District Code are also exempt. In addition, any collective bargaining agreement negotiated after January 1, 2024, will need to contain an express, clear and unambiguous waiver of the PLFAW Act to avoid its application.

Take Away

Employers with employees in Illinois should prepare for the PLFAW Act to take effect. Employers will have some time to work out the details, but may need to adjust internal policies and systems to comply with the requirements of the new law.

If you have any questions, please reach out to Peyton Demith at pdemith@vedderprice.com or the Vedder Price lawyer(s) with whom you normally work.