What do employers need to know about the new paid leave laws for the state of IL and the city of Chicago? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
Answer by Kara Govro, Chief HR Legal Expert at Mineral, on Quora:
Starting January 1, 2024, employees in Illinois will begin to accrue Paid Leave, which is paid time off that they’ll be able to use for any purpose. The Illinois Department of Labor (IDOL) is working on final rules that will clarify how the law should be applied—they should be released no later than March 31, 2024.
Paid Leave applies to employers of all sizes and to almost all employees, with limited exceptions. Employees will accrue Paid Leave at a rate of one hour for every 40 hours worked. Exempt employee accrual can be based on a 40-hour workweek (even if the employee generally works more than that) or the employer can use their normal work schedule for leave calculations. Employers can cap accrual and use at 40 hours per year. Employees can begin using their accrued Paid Leave on March 31, 2024, or after 90 days of employment, whichever is later. Unused Paid Leave is carried over from year to year.
If an employer chooses not to use an accrual system, they can frontload an employee’s Paid Leave bank at the beginning of each year or on a new hire’s first day of employment. In that case, they don’t need to allow carryover of unused Paid Leave as long as they continue using the frontloading system. Employers will need to frontload 40 hours of Paid Leave for most employees.
Employers can’t require employees to provide the reason for leave or documentation to support their need for Paid Leave. And as is common with sick leave laws, they can’t require that an employee find their own coverage or deny them leave if a replacement worker can’t be found.
For employers to stay compliant, they’ll need to add a Paid Leave policy to their handbook. Or, if they want to use a current PTO or vacation policy to comply with the law, they’ll need to review and update it to ensure that it’s at least as generous, and no more onerous, than the new Paid Leave law. They’ll also need to post a Paid Leave notice at each worksite and provide a written notice in the handbook or to each individual by March 31, 2024, or upon hire, whichever is later. I also recommend Illinois employers review the FAQs on the IDOL’s website.
Chicago – Change Delayed
The City of Chicago will also replace its Paid Sick Leave ordinance with a more robust Paid Leave and Paid Sick and Safe Leave Ordinance in the coming year. Originally going into effect on December 31, 2023, the effective date of the law has been pushed back to July 1, 2024, to give employers more time to plan and comply.
Under Chicago’s new ordinance, employees will be entitled to accrue two separate types of leave: Paid Leave that can be used for any reason and Paid Sick Leave that can be used for the reasons allowed by Chicago’s previous paid sick leave law.
Both types of leave (Paid Leave and Paid Sick Leave) begin to accrue on July 1, 2024, or upon hire, whichever is later, at a rate of one hour for every 35 hours worked. An employee who works 35 hours will have earned one hour of Paid Sick Leave and one hour of Paid Leave. Employers can cap accrual at 40 hours per year for each type of leave but can’t cap use—employees are entitled to use whatever they earn, up to the accrual limits. However, employers can impose a 30-day waiting period on Paid Sick Leave use and a 90-day waiting period on Paid Leave use, from the time of hire. Employees are entitled to carry over up to 16 hours of Paid Leave and up to 80 hours of Paid Sick Leave per year.
Employers don’t have to pay out any unused Paid Sick Leave at termination, but there are some payout requirements for Paid Leave. Employers with 101 or more employees have to pay out all unused Paid Leave at termination. Midsize employers (51–100 employees) have to pay out up to 16 hours of unused Paid Leave during the first year of the program, and all of it as of July 1, 2025. Small employers don’t have to pay out any unused Paid Leave.
Some of the details of this law are never-before-seen in paid leave or sick leave laws. For instance, if either type of leave was unreasonably denied, employers must increase the amount of carryover allowed to credit the employee for the leave they were denied.
Employers will need to update their policies to comply with the new ordinance and should review the resources that will be made available by the City of Chicago in the coming months.
This question originally appeared on Quora – the place to gain and share knowledge, empowering people to learn from others and better understand the world.
