New Employment Law Requires Illinois Businesses to Provide
Paid Leave to Employees
January 20, 2023
On January 11, 2023, Illinois Governor J.B. Pritzker announced that he is signing the Paid Leave for All Workers Act (the “PLFAW Act”), which requires all businesses to provide paid leave to Illinois employees. The PLFAW Act goes into effect January 1, 2024, and, while we expect to see additional guidance, here are the main takeaways businesses need to know to prepare for what’s next.
- The PLFAW Act will require that Illinois businesses provide employees with a minimum of 40 hours paid leave (or a prorated amount for those working shorter workweeks) every twelve months. The paid leave will accrue at the rate of one hour for every forty hours worked.
- Employees will be able to use the time earned after 90 days on the job unless businesses allow employees to take time off earlier.
- Employees can determine how much leave to use, but businesses may set a reasonable minimum increment of no less than two hours per day.
- Businesses may require up to seven calendar days’ notice of foreseeable leave if they have a written policy provided to employees outlining notice requirements and procedures. Businesses cannot require employees to submit documentation of the need to take leave.
- Unused, accrued paid leave will carry over annually, but businesses will only be required to provide up to 40 hours of paid leave for an employee in the designated twelve-month period.
- Businesses can choose to frontload the 40 hours. Businesses that frontload paid leave will not be required to carry unused paid leave for the next twelve months.
- Businesses will not be required to pay employees for unused paid leave accrued under the PLFAW Act at the end of the employment relationship. However, note that under the Illinois Wage Payment and Collection Act, businesses must pay employees earned vacation time.
- Critically, the PLFAW Act provides that businesses that already have policies that satisfy the minimum amount of leave are not required to modify their existing policy if it offers employees the discretion to take paid leave for any reason.
Now & Next: Being Proactive is Better than Being Reactive.
Businesses have a year to prepare before the PLFAW Act takes effect, but they may want to begin preparing policies and procedures before the time’s up. Measures businesses can take now include the following:
- Businesses that already provide at least forty hours of paid leave per year are not required to modify their policies. However, they should develop a policy specifically addressing the PLFAW Act.
- Develop and implement policies and procedures to keep track of hours worked and paid leave accrued balances if your business has — or will utilize — an accrual policy.
- Educate management to ensure they understand the requirements under the PLFAW Act.
- Review and update job postings to confirm they reflect the new requirements under the PLFAW Act
- Stay informed of the latest guidance updates.
Croke Fairchild Duarte & Beres will continue to post updates on the PLFAW Act as information becomes available.
About Croke Fairchild Duarte & Beres
Croke Fairchild Duarte & Beres is a corporate law firm providing services to businesses, private equity and venture firms and their portfolio companies, public companies, founders and family offices. Formed by partners who worked at preeminent international law firms, the firm boasts a deep bench of sophisticated and experienced corporate lawyers. With offices in Chicago and Milwaukee, our team provides exceptional legal service while affording our clients the benefits of working with a small, agile, and driven law firm. For more information, please visit us online at crokefairchild.com.