“Paid Leave Law for All Workers Act” and Other 2023 Legal Updates for Illinois Employers

I.          Paid Leave for Illinois Employees.

Under the new paid leave law (“PLAW Act”), which is pending Governor Pritzker’s signature, covered employers are required to provide employees who work in Illinois up to a minimum of 40 hours of paid leave, or a pro rata number of hours (1 hour for every 40 hours worked up to a minimum of 40 hours) in a twelve-month period. The PLAW Act is scheduled to take effect on January 1, 2024.  The following provides highlights of the new paid leave law.

Eligibility and Exceptions

The PLAW Act applies to employers that employ at least one employee in Illinois, unless otherwise exempt under the law.  One notable exception excludes employees covered by a bona fide collective bargaining agreement, which was in effect prior to the effective date of the PLAW Act.  Collective bargaining agreements entered into after the effective date of the PLAW Act must include an explicit waiver of the PLAW Act requirements in order to exempt the employees bound by the agreement. Similarly, employees covered by a collective bargaining agreement in the construction industry or who work for an employer which provides services nationally and internationally of delivery, pickup, and transportation of parcels, documents, and freight are exempt.

It is important to note that the PLAW Act does not apply to employers covered by municipal or county ordinances that provide for paid leave or paid sick leave, such as the Chicago Minimum Wage and Paid Sick Leave Ordinance and the Cook County Earned Sick Leave Ordinance, that are in effect prior to or on the effective date of the PLAW Act. However, employees covered by local ordinances enacted or amended after the effective date of the PLAW Act are only exempt from the PLAW Act protections if the local ordinance meets or exceeds the protections provided in the PLAW Act.

Accrual and Carryover

Eligible employees start accruing PLAW leave at the later of the beginning of employment or the effective date of the PLAW Act. Employees can take the time provided or earned under the PLAW Act for “any reason,” starting 90-days after the start of employment or if already employed, 90-days after the law goes into effect. Covered employers may elect to provide the full 40 hours of the leave at the beginning of the twelve-month period or on an accrual basis. Generally, the PLAW Act requires accrued unused time carryover to the next twelve-month period. However, employers that provide the minimum number of hours of paid leave on the first day of the twelve-month period or first day employment are not required to carry over paid leave and may require employees use all paid leave prior to the end of the period.

Use of Leave

Employers can require that employees provide up to a seven-day notice if the leave is foreseeable and as much notice as practicable for unforeseeable leave. Employers can also set a minimum time increment for use not to exceed 2 hours per day. Employees are not required to provide their employer with a reason for the leave and employers cannot require that employees provide documentation or certification to take earned leave under the PLAW Act. Employers may not require employees to find coverage for their absence to take paid leave.

Employers are not required to pay out earned and unused paid leave unless the paid leave under this Act is combined with an employer’s PTO or vacation leave policy; then any earned and unused paid leave must be paid out upon separation of employment in accordance with state law.

Additionally, if an employee is rehired within a twelve-month period, the employer must reinstate any earned and unused PLAW-required leave.

Notice Requirements

Upon the effective date, employers must post a notice to employees and provide a separate written notice or policy in their handbook including a summary of the PLAW Act’s requirements and how to file a charge pursuant to the PLAW Act.

Penalties

Employers who fail to comply with the PLAW Act are subject to civil penalties and damages payable to the employee in the form of actual underpayment, compensatory damages, and an additional penalty of up to $1,000. Employers who fail to comply with the posting requirements are subject to penalty of $500 for the first violation and $1,000 for any subsequent violation. Additionally, an employer that violates the Act or any rule adopted thereunder is subject to a civil penalty of $2,500 for each separate offense to be paid to a fund dedicated to enforcing the Act.

Prepare for Compliance

Employers should begin reviewing coverage requirements and review their paid time off, vacation, and/or sick time policies to create a plan for complying with PLAW requirements in advance of January 2024.   

II. 2023 Legal Updates for Illinois Employers.

     As of January 1, 2023, new laws went into effect that may impact your business. Although this article is not intended to be an exhaustive list of every new employment-related law, it does highlight some pertinent issues for Illinois employers.  Employers should update their company policies and train supervisors and/or managers regarding these updates to ensure compliance.

The One Day Rest in Seven Act

Amendments to the Illinois One Day Rest in Seven Act (“ODRISA”), accompanied by increased monetary penalties for non-compliance, are as follows:

• Day of Rest within Seven Day Period: Employers are required to provide employees with 24 consecutive hours of rest in every consecutive seven-day period.
• Additional Meal Breaks After 7.5 Consecutive Hours: After the initial 7.5 hours of work, employees are entitled to an additional 20-minute unpaid break for each additional 4.5 hours worked.
• Notice Requirements: Employers must notify their employees about their rights under ODRISA, a poster is available here: the IDOL website.

Illinois Family Bereavement Leave Act

Recent amendments to the Family Bereavement Leave Act (“FBLA”) expanded leave to cover bereavement of an employee’s family member as well as certain pregnancy, fertility, and adoption-related events. The FBLA requires FMLA covered employers to provide up to 10 days of unpaid leave to FMLA eligible employees.

CROWN Act  

The CROWN Act, which amended the Illinois Human Rights Act, expands the definition of “race” to include traits associated with race, including but not limited to hair texture and protective hairstyles such as braids, locks, and twists.

Illinois Minimum Wage

The Illinois minimum wage increased from $12.00 to $13.00. Tipped employee minimum wage increased from $7.20 to $7.80.  The minimum wage for youths under 18 (and work less than 650 hours per calendar year) increased from $9.25 to $10.50.

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