The Employer’s Guide to Illinois Mandatory Paid Leave

Kim Porter

Starting in 2024, an estimated 1.5 million workers in Illinois will qualify for paid leave they can use for virtually any reason. The Paid Leave for All Workers Act goes into effect January 1, 2024, and requires nearly all businesses to offer workers paid time off based on hours worked.

Fast facts:

  • Eligible employees in Illinois will generally accrue one hour of paid leave for every 40 hours worked, up to 40 hours per year.
  • Workers can use that paid leave without providing an explanation, but they’ll need to give their employer reasonable notice.
  • Some types of employers and some workers are excluded from the law.

Paid time off in Illinois

The new law in Illinois is pretty simple: Employees accrue paid leave and can use it anytime and for any reason. Here are some details on how it works:

Employees accrue paid leave

Employees in Illinois—whether they’re part-time or full-time—are entitled to earn and use up to 40 hours of paid leave each year. You can choose any consecutive 12-month period for your employees, such as January through December, as long as you document it in writing.

Workers can begin accruing hours January 1, 2024, or at the start of employment, whichever is later. They’ll earn one hour of paid leave for every 40 hours worked. You’ll need to provide a minimum of 40 hours of paid leave per year, though you can choose to offer more.

If you have exempt employees on payroll, they’re presumed to work 40 hours per work week for the purposes of accrual. And if an employee’s regular work week is less than 40 hours, then paid leave accrues based on that regular work week. At the end of the 12-month period, employees can carry over any unused paid leave to the next year. 

You have a choice here. Instead of using the accrual method, you can choose to frontload the paid leave on the first day of employment or on the first day of the 12-month period you’ve chosen. Under the frontload method, employees won’t carry over unused paid leave to the next year.

But in either case, you won’t have to provide more than 40 hours of paid leave for an employee in a 12-month period. And when an employee leaves your company, you won’t need to pay them for any unused time off—provided you haven’t “credited” the paid leave to their paid time off or vacation banks. 

Employees take their leave

An employee can start using their paid time off once they’ve worked for an employer for 90 days—with just a couple of restrictions: 

  • Notice: You can require workers to give you up to seven days’ notice before taking time off. But when emergencies come up, employees can provide notice as soon as possible. 
  • Minimum increments: You can set reasonable minimum increments for using the paid time off, as long as it doesn’t exceed two hours per day.

Otherwise, employees have free rein to use their time off for any purpose—to “maintain their health and well-being, care for their families, or use for any other reason of their choosing,” according to the law. Employees won’t need to provide documentation to explain their leave or find a replacement worker in their stead.  

During their time off, workers should receive their full wages. Tipped workers should be paid the minimum wage in their respective locale. 

Who receives paid time off? 

The Paid Leave Act extends to nearly every employer in Illinois without regard to business size. (Nevada and Maine each offer their own versions of this law, but they’re more limited.) State and local governments in Illinois, with the exception of certain school and park districts, are included. 

But employers who already provide paid leave to their employees under a municipal or county ordinance—such as Cook County and the city of Chicago—won’t be subject to the new law. 

Who’s excluded from the law?

Some employees won’t be entitled to paid leave. They include:

  • Federal employees
  • Seasonal workers
  • Independent contractors
  • Workers who are already covered by an existing paid sick leave ordinance
  • Employees who are covered by a bona fide collective bargaining agreement in the construction and parcel-delivery industries
  • College students who work part-time jobs for their university
  • Certain short-term employees of a higher-learning institution
  • Employees as defined in the federal Railroad Unemployment Insurance Act or the Railway Labor Act

Employer compliance responsibilities

Make sure you’re compliant with the new law by taking these steps:

  • Update your policies. Make changes to your employee handbook if you have one. For instance, you might include information about the 12-month period that applies to paid leave, how employees accrue paid leave, your definition of “reasonable notice,” and whether you require employees to use a minimum number of hours during paid leave.
  • Train the appropriate personnel. Keep your managers, human resources department, and payroll provider up-to-date on your company’s policies. 
  • Post written notice. Post your paid leave policy in a “conspicuous” place on the premises for all employees to see. Check the Illinois Department of Labor website for updates on this notice.
  • Keep track of paid leave. Each year, track the number of hours each employee works, their accrued paid leave, their used paid leave, and any balance they have available. 
  • Store the records. Keep your records for at least three years, and be prepared to hand them over to the Illinois Department of Labor if asked. The agency can make reasonable requests to access the records to monitor compliance with the law.
Kim Porter Kim Porter covers personal finance topics for AARP The Magazine, Bankrate, U.S. News & World Report, Reviewed, Credit Karma, and more. When she’s not writing, you can find her training for her next race, reading, or planning her next big trip. Twitter | LinkedIn
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