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Pritzker Signs Paid Leave For All Workers Act

Labor & Employment Publications

Governor Pritzker has signed into law the recently passed “Paid Leave for All Workers Act” (“PLAWA”), guaranteeing paid time off for virtually all working Illinoisans. Set to go into effect on January 1, 2024, the PLAWA will provide a minimum of 40 hours of paid time off for employees to “maintain their health and well-being, care for their families, or use for any other reason of their choosing.”

Who Is and Is Not Covered
The PLAWA borrows the definitions of “Employee” and “Employer” from the Illinois Wage Payment and Collection Act (“IWPCA”), but adds “domestic workers” to the definition of “Employee” and State and local government to the definition of “Employer.” The definition of “Employer” does not, however, include school districts organized under the School Code or park districts organized under the Park District Code.

Leave Entitlement
Under PLAWA, workers will be entitled to earn and use “up to a minimum of 40 hours” of paid leave during a 12-month period. Leave under the Act accrues at the rate of one hour of paid leave for every 40 hours worked until the employee reaches the greater of 40 hours of paid leave or the maximum set by the employer. Employees begin accruing leave when the Act takes effect on January 1, 2024 or on their first day of employment, whichever is later. Employees who are exempt from overtime requirements under the Fair Labor Standards Act are deemed to work 40 hours each week, unless their regular workweek is less than 40 hours, in which case paid leave accrues based upon the employee’s regular work week.

Accrued PLAWA leave carries over from year to year if not used. However, an employer is not required to allow an employee to use more than 40 hours of paid leave during a 12-month period. Employers that do not wish to track accrual or carryover of leave under the Act can avoid doing so by crediting employees with the maximum amount of leave allowed under their policy on the first day of the 12-month accrual period. 

Leave Use
Under PLAWA, employees may use their accrued paid leave for any reason of their choosing. The Act bars employers from requiring employees to provide any documentation or certification of their need for leave under the Act. Employers also may not require employees to search for or find a replacement worker to cover hours during which an employee takes paid leave. Employers can set a reasonable minimum increment for the use of paid leave, not to exceed 2 hours per day.

Employers can require employees to provide notice of foreseeable leave at least 7 days before the date of the leave. Employers can also require employees to provide notice of unforeseeable leave as soon as practicable after the employee becomes are of the need for the leave. However, any such requirement must be set forth in a written policy that contains procedures for the employee to provide notice.

The PLAWA is enforceable by the Illinois Department of Labor, and employees may file a complaint with the Department within three years after any alleged violation, with penalties to include 1) actual underpayment; 2) compensatory damages, 3) a penalty of not less than $500 and not more than $1,000; and 4) equitable relief, including attorney’s fees and other costs of the action.

Limited Applicability in Cook County and Chicago
The PLAWA specifically exempts any employers who are covered by the Cook County Earned Sick Leave Ordinance (i.e. non-governmental employers with at least one employee and one place of business in Cook County) or the City of Chicago Paid Sick Leave Ordinance (i.e. non-governmental employers with at least one employee or the City and its sister agencies). Both of those ordinances require covered employers to provide at least one hour of paid leave per forty hours worked, but limit the time to “sick leave,” and require documentation in certain instances. If either or those ordinances are amended after January 1, 2024, the amendments must comply with the terms of the PLAWA, i.e., they must allow for paid leave for any reason, not just for defined sick leave purposes.

Limited Applicability for Employees Covered by a CBA
The PLAWA does not affect the terms of any collective bargaining agreement in effect as of January 1, 2024, but any bargaining agreement entered into after that day must either satisfy the requirements of the PLAWA or set forth explicitly that such terms are waived.

Right to Final Compensation
Employees are not entitled to payment for unused paid leave acquired under the PLAWA at the time of their termination, resignation, retirement, or other separation unless the employer’s policy “permits such a credit.” However, the PLAWA specifically provides that it does not waive or otherwise limit an employee’s right to unpaid but earned final compensation for any type of leave promised to be paid under a contract of employment or employment policy pursuant to the Illinois Wage Payment and Collection Act.  Thus, an employee covered by a contract or policy stating that they are entitled to a given number of vacation or PTO days per year is still entitled to a payout of any accrued, unused vacation or PTO days as part of the employee’s final compensation. An employer who chooses to alter its polices or employment contracts to avoid this outcome must provide written notice of any change that would affect an employee’s right to final compensation.

Other Exclusions
The definition of “Employee” under the PLAWA excludes employees under the Railway Labor Act, temporary college or university student employees, short-term employees of higher education institutions, or employees working in the construction industry or for an employer that provides services of delivery, pickup, and transportation of parcels, documents and freight that are covered by a bona fide collective bargaining agreement.

We anticipate that the Illinois Department of Labor will issue regulations and other guidance with further detail regarding requirements of the Act. While the Act does not take effect until January 1, 2024, employers should start planning now to integrate leave under the PLAWA into their existing leave policies.

We will continue to monitor and provide updates on developments under this new law. Please reach out to a Franczek attorney with any questions.