On January 10, 2023, Illinois legislature passed the Paid Leave For All Workers Act (the “Act”), which requires Illinois employers to provide at least 40 hours of paid leave per year to be used for any reason. Governor Pritzker announced that he will sign the Act into law, making it effective on January 1, 2024. This is a major update for Illinois employers and will provide most Illinois employees with paid leave that may be used for any reason. The key provisions of the Act are the following:

Covered Employers

The definition of employer in the Act is borrowed from the Illinois Wage Payment and Collection Act (“IWPCA”). The Act will apply to all private sector employers of all sizes and state and local governments. The Act does not apply to school districts organized under the School Code or park districts organized under the Park District Code.

Covered Employees

The definition of employee under the Act is also borrowed from the IWPCA.  The Act applies to all employees, with the exception of: (1) those in the federal Railroad Unemployment Insurance Act and Railway Labor Act; (2) certain student employees; and (3) short-term higher education employees.

Leave Usage

Employees will be able to begin using paid leave either 90 days after the beginning of their employment or 90 days after the effective date of the Act, whichever is later.

Accrual, Frontloading, and Carryover of Leave

Employees will accrue one hour of paid leave for every 40 hours worked, up to 40 hours per year. Accrual will either begin at the commencement of employment or January 1, 2024, whichever is later. Employers may also instead choose to frontload 40 hours of paid leave (or the pro rata amount of what the employee would earn if accrued during the year) on the employee’s first day of employment or on the first day of a designated twelve-month period.

Covered employees may carry over any accrued, unused paid leave at the end of the year. However, employers that choose to frontload the minimum number of hours of paid leave are not required to allow employees to carryover paid leave from year to year.  If an employer provides for carryover of paid leave, it may limit an employee’s use of paid leave to 40 hours per year.

Reasons for Use and Required Notice

Paid leave may be taken for any reason. Employees are not required to provide employers with a reason for their choosing to take leave and employers cannot require employees to provide documentation or certification to in support of their leave.

However, if an employee’s use of paid leave is foreseeable, an employer may require the employee to provide 7 calendar days’ notice before the leave is taken. If the employee’s use of leave is not foreseeable, the employee must provide notice as soon as practicable.  If an employer chooses to require notice of leave when leave is not foreseeable, it must provide a written policy that contains the procedures for an employee to provide such notice.

Recordkeeping

Employers are required to create and maintain records documenting hours worked, leave accrued and taken, and remaining paid leave balances for at least three years. Employers must also allow the Illinois Department of Labor (“IDOL”) access to the records. Employers that provide leave on an accrual basis must provide notice of the amount of leave accrued or used by an employee upon request by the employee.

Posting Requirements

Employers must post, in an area where other notices are customarily posted, a notice that summarizes the requirements of the Act and provides information on filing a charge with the IDOL. The notice will be prepared by the IDOL. Employers that have workforces comprised of a significant portion of workers who are not literate in English must request a separate notice from the IDOL. Violations of the posting requirements will subject employers to a penalty of $500 for the first violation and $1,000 for each subsequent violation.

Retaliation

The Act prohibits employers from taking adverse action against employees for: (1) exercising their rights under the Act; (2) opposing practices the employee believes to be in violation of the Act; or (3) supporting others’ exercise of their rights under the Act. The Act also prohibits employers from considering the use of leave under the Act as a negative factor in employment decisions concerning discipline, promotion, or evaluation.

Penalties

Employees may file a complaint with the IDOL within three years of an employer’s alleged violation of the Act. Employers found to have violated the Act are subject to actual damages, compensatory damages, attorneys’ fees/costs, civil penalties, and equitable relief. Additionally, an employer that violates the Act will also be subject to a civil penalty of $2,500 for each separate offense.

Employers with operations in Illinois should review their current leave policies for compliance with the Act in advance of the January 1, 2024, effective date.

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Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular…

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular focus on defending companies against claims of employment discrimination, retaliation and harassment; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations. He has successfully tried cases in multiple jurisdictions, and defended one of the largest Illinois-only class actions in the history of the U.S. District Court for the Northern District of Illinois. He also secured one of only a few ex parte seizures orders that have been issued under the Defend Trade Secrets Act, and obtained a world-wide injunction in federal litigation against a high-level executive who jumped ship to a competitor.

Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has testified in federal court. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Steven was recognized as Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He is a Fellow of the College of Labor and Employment Lawyers.  Chambers describes Steven as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field.” Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a “Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a Burton Award Winner (U.S. Library of Congress) for “Distinguished Legal Writing.”

Steven has served on Law360’s Employment Editorial Advisory Board and is a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is regularly quoted in leading publications such as The Wall Street Journal.

The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal. He was appointed to serve as a Special Assistant Attorney General for the State of Illinois in employment litigation matters. He has presented with the Solicitor of the DOL, the Acting Chair of the EEOC, an EEOC Commissioner, Legal Counsel to the EEOC and heads of the SEC, CFTC and OSHA whistleblower programs. He is also a member of the Sedona Conference, focusing on trade secret matters.

Photo of Alexandra Oxyer Alexandra Oxyer

Alexandra “Alex” S. Oxyer is an associate in the Labor & Employment Law Department.

Alex concentrates her practice in complex employment litigation and employment law counseling, including advising clients on issues related to hiring and firing, workplace investigations, employment policies, and wage and…

Alexandra “Alex” S. Oxyer is an associate in the Labor & Employment Law Department.

Alex concentrates her practice in complex employment litigation and employment law counseling, including advising clients on issues related to hiring and firing, workplace investigations, employment policies, and wage and hour compliance. She regularly defends companies in all aspects of employment litigation, including claims of discrimination, harassment and retaliation, and breach of restrictive covenants (e.g., noncompetition and nonsolicitation). She has handled such cases before state and federal courts throughout the country, as well as before the U.S. Equal Employment Opportunity Commission, the Illinois Department of Human Rights, the Indiana Civil Rights Commission, the American Arbitration Association, and the Department of Labor.

Prior to joining Proskauer, Alex was a cum laude graduate from Indiana University Maurer School of Law. She previously practiced at a national management-side employment law firm, and in addition to her experience in private practice, Alex also worked as in-house counsel for a large public university. As in-house counsel, Alex investigated, managed, and resolved a wide range of disputes in the student affairs and employment areas, including single and multi-plaintiff discrimination, harassment, retaliation, and wage & hour issues.