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Covered Illinois Employers Will Need to Comply with the Paid Leave for All Workers Act

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  • Last Updated: 03/15/2023

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Most employers in Illinois will have to comply with the Paid Leave for All Workers Act, which gives employees up to 40 hours of paid leave annually for any reason, when it goes into effect in 2024.

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On Jan. 1, 2024, all covered employers in Illinois will be required to offer their employees up to 40 hours of paid leave per year, and for any reason. The governor of Illinois signed the Paid Leave for All Workers Act into law March 13, 2023, making Illinois the third state (Maine and Nevada are currently the others) to mandate employer-provided paid time off without a qualifying reason.

What Are the Employer Requirements Under Paid Leave for All Workers Act?

A covered employer must decide how they want to provide paid leave hours; an accrual process over a 12-month period or frontloaded hours at the employment start date and annually after that. Employers must establish in writing what the 12-month period will be.

If an employer chooses to frontload the hours, then they are not required to allow employees to carry over any hours from one 12-month period to the next and employees would forfeit any unused leave at the end of the 12-month period. However, employers may choose to provide a more generous policy allowing for carryover.

If an employer chooses to use the accrual process, then covered employees will begin to accrue paid leave on the law’s effective date (Jan. 1, 2024) or at the start of their employment, and the minimum accrual will be one hour of paid leave for every 40 hours worked. Employees can accrue up to 40 hours in a 12-month period.

Employers are also subject to recordkeeping requirements including:

  • Employee hours worked
  • Paid leave accrued and used by each employee
  • Paid leave balances for each employee

Required records must be retained for three years and made available upon request from the Illinois Department of Labor (IDOL), or upon request from the employee.

Additionally, employers must post the required notice in a conspicuous place on-site and provide written notice to employees (printed communication in physical or electronic format) or include a copy in a written policy or an employee handbook, if the employer has one. The required posting, which the IDOL will develop, will also need to be provided in other languages if there is a significant portion of employees that are not literate in English. In such instances, employers must notify the IDOL, which then will prepare a version of the notice in the appropriate language(s).

Employers may require advance notice from employees for their need for leave; up to seven days for any foreseeable need for leave or as soon as practicable for an unforeseen need for leave. If an employer requires any kind of notice for unforeseeable leave, then they must have a written policy documenting the procedures for employees to follow in such circumstances. 

Under this law, employees are not required to produce documentation to support the need for their leave.

What Employees Should Know About Paid Leave for All Workers

Covered employees can accrue paid leave hours or have the balance frontloaded on the effective date (Jan. 1, 2024) or their first day of work, whichever is later.

Although employees begin accruing paid leave hours immediately upon their start date or on the effective date of the Act, employers are permitted to impose a waiting period that employees cannot use any paid leave under this law until they complete up to 90 calendar days on the job or 90 days following the effective date of Jan. 1, 2024, whichever is later.

Employees also will have the option of carrying over up to 40 hours of paid leave to the next 12-month period if the employer opts to use the accrual process.

As for pay while on leave under this act, employees must generally receive their hourly rate and tipped employees are owed at least the minimum wage. Employees also will retain any accrued paid leave time if or when they transfer within the company.

Additional Details for Employers

Under the Paid Leave for All Workers Act, employers do not have to pay out earned but unused paid leave time upon employee separation from the company, unless time under this act is credited to an employee’s existing paid time off or vacation bank or other paid leave policy that is required to be paid out under an existing Illinois law or rule.

Are Any Employers Exempt from Paid Leave for All Workers Act?

There are several types of employers that the Paid Leave for All Workers Act does not apply to, including school districts organized under the Illinois School Code, park districts under the Illinois Park District Code, and the federal government.

Additionally, the Act does not apply to employers who already are covered by a municipal or county ordinance in effect on or before Jan. 1, 2024, that requires them to provide paid leave to employees, including paid sick leave (e.g., the Chicago Minimum Wage and Paid Sick Ordinance, the Cook County Earned Sick Leave Ordinance).

Employers should know that if they are in a municipality or county that enacts or amends a local ordinance that provides paid leave, including paid sick leave, after the effective date of the Paid Leave for All Workers Act, they will only need to comply with the local ordinance so long as the benefits, rights, and remedies are greater than or equal to those afforded under this Act.

What are the Penalties for Noncompliance?

Employers could face civil penalties between $500 and $2,500, based upon the specific violation of the Act or any adopted rules. Additionally, employers might also have to pay, in part, attorney fees and other legal costs that an employee might be entitles to due to the employer’s violation.

What’s Next?

The above represents a general summary of the provisions of the Paid leave for All Workers Act. Additional provisions and definitions are available in the statute.

Guidance from the IDOL is expected ahead of the law’s effective date, but covered employers can get ahead of any potential obligations by addressing their paid leave policies to make sure they are or will be compliant by Jan. 1, 2024. Paychex can provide support to help your Illinois business with its HR needs, including helping you keep up to date on federal and state employment regulations that could impact your business. 


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* Este contenido es solo para fines educativos, no tiene por objeto proporcionar asesoría jurídica específica y no debe utilizarse en sustitución de la asesoría jurídica de un abogado u otro profesional calificado. Es posible que la información no refleje los cambios más recientes en la legislación, la cual podrá modificarse sin previo aviso y no se garantiza que esté completa, correcta o actualizada.

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