The New Year Brings Paid Time For (Almost) All Employees in Illinois

With the new year comes new challenges for Illinois employers, particularly those doing business in Cook County or the City of Chicago, where lawmakers enacted a new State law and two separate ordinances allowing workers in those jurisdictions to earn paid time off.

Governor J.B. Pritzker signed the Paid Leave for All Workers Act into law in March of last year. The Act, which became effective on January 1st, 2024, requires that all full- and part-time workers employed in the State of Illinois receive one hour of paid time off for every 40-hour-week worked, for up to a minimum of 40 hours per year. Illinois is the third state to require employers to give their employees paid time off. Illinois workers may use the paid time off for anything they want, while Nebraska and Maine maintain that the paid time off be used for sick leave.

Nearly all full- and part-time employees, including nannies and housekeepers, are covered under the Act. Public school employees, park district employees, employees already covered by collective bargaining agreements, and university students who are part-time workers at their institutions are not covered under the Act. Employers are forbidden from retaliating against employees for using their paid time off. Employers that violate any of the provisions of the Act may face a fine of up to $2,500 from the agency, and employees may be entitled to damages separately.

While the Act is currently in effect, employees who are eligible for paid time off will be able to utilize their accrued time starting March 31, 2024. Employers have the option of implementing either an accrual system or a frontloaded system for offering paid time off. If the employer chooses an accrual model, the Act requires employers to roll over any unused time.

As mentioned, in addition to the Paid Leave for All Workers Act, employers who do business in Cook County or the City of Illinois must also comply with the provisions of up to two new ordinances. The Cook County Paid Leave Ordinance was passed by the Cook County Board of Commissioners on December 14, 2023 and went into effect December 31st. The Cook County Paid Leave Ordinance supersedes the preexisting Cook County Earned Sick Leave Ordinance and largely mirrors the Paid Leave for All Workers Act. It requires employers to offer paid leave that can be used by the employee for any reason, like the paid time off contemplated by the Illinois statute. It also entitles covered employees to accrue at least one hour of paid leave for every 40 hours worked, up to 40 hours per 12-month period. Though the Cook County Paid Leave Ordinance provides that paid leave accrual must begin at the commencement of employment or on the December 31, 2023 effective date (whichever is later), employees are not entitled to begin using paid leave until 90 days after the start of their employment or 90 days after the Ordinance’s effective date (March 30, 2024).

The Cook County Paid Leave Ordinance covers all employees in Cook County, except: a) “employees,” as defined in the federal Railroad Unemployment Insurance Act, 45 U.S.C. § 351, et seq.; b) temporary college or university student-employees; c) short-term employees employed by higher education institutions for fewer than two consecutive quarters during a calendar year who do not expect to be rehired by the same employer the following year; and d) employees in the construction industry who are covered by a bona fide collective bargaining agreement. The Cook County Ordinance excludes the following as “employers”: a) the government of the United States; b) Indian tribes or corporations owned by Indian tribes; and c) the government of Illinois.

Under the Cook County Paid Leave Ordinance, employers may frontload the minimum number of hours of paid leave to employees on their first day of employment or the first day of the 12-month period chosen by the employer. Employers that frontload at least 40 hours of paid leave are not required to allow carryover of unused paid leave from year to year. Employers may also set a minimum increment for the use of paid leave of no more than two hours per day, and, if the need is foreseeable, may require up to seven days’ advance notice for use of paid leave, or as soon as is practicable if the need is unforeseeable. Employers may not require documentation for the use of paid leave.

In addition to the Cook County Paid Leave Ordinance (which would have already applied to employers doing business in Chicago), the City of Chicago’s new Paid Leave and Paid Sick and Safe Leave Ordinance, came into effect on December 31, 2023. The Ordinance provides that covered employees are entitled to accrue one hour of paid leave for any reason and one hour of paid sick leave for every 35 hours worked, up to 40 hours of paid sick leave per year, and another 40 hours of paid leave to use for any reason.

The City’s Paid Leave and Paid Sick and Safe Leave Ordinance defines an “employer” as a person who gainfully employs at least one person. It covers employees who, in any two-week period, perform at least two hours of work for an employer while physically present within the geographic boundaries of the City of Chicago, regardless of where the employer is located. The City Ordinance will not affect collective bargaining agreements in force on January 1, 2024, but after that date, its requirements may only be waived through a collective bargaining agreement if the waiver is expressly contained in the agreement in clear and unambiguous terms.

Under the City Ordinance, employers must allow employees to use accrued paid sick leave 30 days after the start of their employment and accrued paid leave for any reason 90 days after the start of employment. Employers can frontload 40 hours of paid leave and 40 hours of paid sick leave on the first day of employment or the first day of the 12-month period. If paid leave is frontloaded, no carryover is required. Employers may also set a minimum-increment requirement of four hours of paid leave for any reason per day and two hours of paid sick leave per day. They may also require employees to give reasonable notice, not to exceed seven days, before using such paid leave, or require employees to request approval from the employer before using paid leave. The Ordinance also contains provisions about payout of unused accrued paid leave upon the employee’s separation from employment, which depend on the size of the employer.

Employers must be aware of how these new ordinances interact with the Illinois Paid Leave for All Workers Act. The Act does not apply to any employer located in a municipality or county where the employer is required by local law or ordinance to provide paid leave time, including paid sick leave, to its employees. This means that employers located within Cook County or the City of Chicago will be subject only to the requirements of the applicable ordinance. Nonetheless, an Illinois employer located outside of Cook County or the City of Chicago that has employees who work in those areas for at least two hours over any two-week period will have to comply with the Paid Leave for All Workers Act for those of its employees who do not work in Cook County or the City of Chicago, and only with the applicable ordinance for employees who do work in these municipalities.

If you have questions about your obligations regarding providing paid time off to workers in Illinois or are interested in learning more about our Labor and Employment Law practice, please contact your relationship attorney.