Illinois has enacted legislation (Senate Bill 208) that will require employers to provide employees with up to 40 hours of paid leave that they may use for any reason. Senate Bill 208 takes effect Jan. 1, 2024.
The Details
Coverage
The law covers most employers and employees. However, it doesn’t cover:
- Any employer that is covered by a municipal or county ordinance that is in effect on January 1, 2024 that requires employers to give any form of paid leave to their employees, including paid sick leave.
- Any employee working in the construction industry who is covered by a bona fide collective bargaining agreement.
- Any employee who is covered by a bona fide collective bargaining agreement with an employer that provides services nationally and internationally of delivery, pickup and transportation of parcels, documents and freight.
- Any school district or park district.
Note: An employer that provides any type of paid leave policy that offers at least 40 hours of paid leave isn’t required to modify the policy if the policy offers an employee the option, at the employee's discretion, to take paid leave for any reason.
Accrual, Frontloading and Carryover
Under the law, employees are entitled to begin accruing paid leave on January 1, 2024 or their date of hire, whichever is later. Employees are entitled to accrue one hour of paid leave for every 40 hours worked, up to 40 hours (employers may provide more generous leave).
Employees who are exempt from the overtime requirements of the federal Fair Labor Standards Act are deemed to work 40 hours in each workweek for purposes of paid leave accrual unless their regular workweek is less than 40 hours, in which case paid leave accrues based on that regular workweek.
Employers that use the accrual method must carry over any unused paid leave to the next benefit year. However, employers aren’t required to provide more than 40 hours of paid leave for an employee in a benefit year unless the employer agrees to do so.
Instead of using the accrual method, an employer may make available the minimum number of hours of paid leave to an employee on the first day of employment or the first day of the benefit year. This is commonly known as frontloading. The Act suggests that an employer may be able to provide a pro rata frontload amount to both new hires and part-time employees.
Employers that frontload the paid leave aren’t required to carryover unused leave to the next year. However, under no circumstances can an employee be credited with paid leave that is less than what the employee would have accrued under the accrual method.
Use
Employees are entitled to begin using the paid leave under the law 90 days following commencement of their employment or on March 31, 2024, whichever is later.
Employees are entitled to use accrued paid leave for any reason, upon written or oral request. They aren’t required to provide a reason for the leave, and employers are prohibited from requiring them to provide documentation or certification in support of the leave. Employees may choose whether to use paid leave provided under the law prior to using any other leave provided by the employer or state law.
Employees are also entitled to use the leave in increments as small as two hours.
Pay During Leave
During the leave, the employee must be paid their hourly rate of pay. Employees paid by gratuities or commissions must be paid at least the full minimum wage in the jurisdiction in which they are employed when paid leave is taken.
Employee Notice
Paid leave under the law must be provided upon the oral or written request of an employee in accordance with the employer's reasonable paid leave policy notification requirements, which may include the following:
- If use of paid leave is foreseeable, the employer may require the employee to provide seven calendar days' notice before the date the leave is to begin.
- If the use of paid leave isn’t foreseeable, the employee must provide notice as soon as is practical.
- An employer that requires notice of paid leave when the leave isn’t foreseeable must provide a written policy that contains procedures for the employee to provide notice.
Payout of Leave
With an important exception (see below), the law doesn’t require employers to pay employees for any unused paid leave at the end of the benefit year or at the time of separation from employment.
Exception
Paid leave under the law must not be charged to an employee's Paid Time Off (PTO) bank or employee vacation account unless the employer's policy permits such a credit. If the paid leave under the law is charged to an employee's PTO bank or employee vacation account, then any unused paid leave must be paid to the employee upon the employee's termination, resignation, retirement or other separation to the same extent as vacation time under existing Illinois law or rule.
Note: Employers must provide employees with written notice of changes to the employer's vacation time, paid time off, or other paid leave policies that affect an employee's right to final compensation for such leave.
Recordkeeping
An employer subject to the law must make and preserve records documenting hours worked, paid leave accrued and taken, and remaining paid leave balance for each employee for at least 3 years. An employer that provides paid leave on an accrual basis must provide notice of the amount of paid leave accrued or used by an employee upon request by the employee in accordance with the employer's reasonable paid leave policy notification provisions.
Employer Notice
Employers must post a notice — and include it in an employee handbook, if the employer has one — to be prepared by the Illinois Department of Labor, summarizing the requirements of the law and information pertaining to the filing of a complaint. Employers that have workforces comprised of a significant portion of workers who aren’t literate in English must request a notice in the appropriate language from the Illinois Department of Labor.
Retaliation Prohibited
Employers are prohibited from taking adverse action against employees for exercising their rights under the law.
Next Steps
- Review, policies, forms and practices to ensure compliance with Senate Bill 208 by January 1, 2024.
- Train supervisors on the new law and how to handle leave requests.
- We anticipate that the Illinois Department of Labor will release additional guidance clarifying a number of issues including for example, pro-rata frontloading and rate of pay requirements. We will continue to keep you informed.
Please contact your dedicated service professional with any questions.