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March 2023: Illinois Passes “Paid Leave for All Workers Act”

28 Mar


Update Applicable to:
All employers in the state of Illinois.

What happened?
In a previous communication, we notified you that the Illinois legislature passed the Paid Leave for All Workers (PLFAW) Act to require private employers to provide earned paid leave to employees to be used for any reason, and Governor Pritzker announced he would sign the legislation. This is an update for that communication.

What are the details?
On March 13, 2023, Illinois Governor Pritzker signed the Paid Leave for All Workers Act, making paid leave for any reason available to Illinois employees beyond these localities.

Beginning January 1, 2024, Illinois employees will be entitled to earn and use at least 40 hours of paid leave during 12 months or a pro-rata number of paid leave hours. Leave must accrue at a rate of at least one hour for every 40 hours worked. For accrual purposes, the law assumes exempt employees work 40 hours each workweek.

Employers may frontload the 40 hours of paid leave, or a pro-rata portion thereof, on an employee’s first day of employment or the first day of any consecutive 12-month period designated by the employer in writing at the time of hire.

To change the designated 12-month use or accrual period, employers must:

  • Provide written notice to employees before the change.
  • Provide employees with documentation of the balance of hours worked, paid leave accrued and taken, and their remaining paid leave balance.
  • Ensure the change does not reduce employees’ eligible accrual or paid leave.

Employers who frontload leave are not required to carry over paid leave from year to year and may require that unused paid leave to be forfeited at the end of the year. Employers who do not frontload must allow up to 40 hours of paid leave to be carried over annually but can cap the annual leave use at 40 hours.

Below are some hyperlinks that contain more information on specific sections and requirements regarding this new law from a trusted law firm, McGuireWoods LLP, via JD Supra’s website:

Terms of Use

Employer Limitations

Payout Requirements

Notice and Recordkeeping Requirements

Other Employee Protections

Collective Bargaining Agreements, Existing Policies, and Interaction With Cook County and Chicago Paid Sick Leave

Failure to comply with the Paid Leave for All Workers Act may result in the following:

  • Civil penalties of $500 for an initial posting violation and $1,000 for each subsequent violation and general civil penalties of $2,500 for each offense would be deposited into the state’s Paid Leave for All Workers Fund.
  • A Department of Labor complaint would allow an employee to recover for underpayment, compensatory damages, a penalty of $500 to $1,000, and payment of attorney and expert fees and costs.

Notably, the new law does not expressly set forth a private right of action.

For more information, please see the links below:

Paid Leave for All Workers (PLFAW) Act

Previous Vensure Communication (January 24, 2023)

Article 1Article 2

What do employers need to do?
Employers should review the links provided above and their current leave policies and future collective bargaining agreements to see what changes are necessary to comply with the Paid Leave for All Workers Act by the time the new law goes into effect on January 1, 2024.

Need help understanding how changes to employment laws will affect your business?

Learn more about how Vensure's Illinois PEO services can help you navigate complex employment laws and keep your business compliant.

This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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