We have now had several months to begin adjusting to the implementation of Illinois’ Paid Leave for All Workers Act, which went into effect on January 1, 2024. On December 31, 2023, Cook County enacted its own companion ordinance, and on July 1, 2024 the City of Chicago will begin implementing its own alternative. The questions you need to tackle are: which of these applies to you? And, are you in compliance?

The Paid Leave for All Workers Act

The Paid Leave for All Workers Act is the default rule for the majority of the State. Under the PLAWA, you are required to provide your employees with up to 40 hours of paid leave every 12 months. The Act provides for “up to” 40 hours, because there is an earning system built into the Act where your employees earn 1 hour of paid leave for every 40 hours of work, reaching a cap of 40 hours of PLAWA leave when they have worked 1600 total hours. An employee who works less than 1600 hours is only entitled to the pro rata amount of leave they actually earned. However, all employees are entitled to this leave, regardless of whether they work full time, part time, are temporary, or even only seasonal employees.

The leave is entirely separate from any existing vacation or sick policies that you might have, even if it ends up serving the same purpose. While you may maintain policies that put limits on an employee’s ability to use vacation and sick leave, there are relatively few limits that can be put upon your employees’ use of their PLAWA leave. You can ask for up to 7 days’ notice before they claim PLAWA leave, but employees are still allowed to claim it if their need for the leave is not foreseeable enough to allow 7 days’ notice. You cannot require them to provide a reason or documentation for taking the leave. You are relatively limited in grounds for denying a request for PLAWA leave: you must have a written policy that lays out grounds for denial, and the policy must establish “limited circumstances in which paid leave may be denied in order to meet the employer’s operational needs for the requested time period”, and the policy has to be “consistently applied to similarly situated employees and does not effectively deny an employee adequate opportunity to use all paid leave time they are entitled to over a 12-month period.”

You can require that they claim PLAWA leave in minimum increments, but those increments cannot be greater than 2-hour blocks. For example, it would be a violation to require your employees to take half-day or full day increments of PLAWA leave. You cannot force employees to use their PLAWA before or in lieu of other forms of leave they may have access to; it is always the employee’s choice, and if your employee says they need leave, you need to advise them about how much unused leave they have available in any different pools available to them. You can refuse to allow an employee to claim PLAWA leave during their first 90 days of employment, but they earn paid leave during that waiting period.

If your employee does not manage to use their full amount of earned PLAWA leave in a 12-month period, the unused time rolls over into the next year. You can prevent this roll-over by front-loading the minimum of 40 hours (or a pro rata portion of the 40 hours) on the first day of employment/the start of the 12-month period. However, regardless of roll-overs, the PLAWA only requires you to grant your employee 40 hours of PLAWA leave in a 12-month period, no matter how much of it rolled over from a prior year.

Moreover, the PLAWA leave carries one great distinction from vacation and sick leave in how it interacts with separation: at the time of separation you do not have to compensate PLAWA time that is earned but that has not been used. As with denying a request for leave, this comes with strict limits based on how you handle PLAWA time. If you credit PLAWA time into vacation time or sick time, the PLAWA leave becomes vacation time or sick time and you may have to pay it out on separation, just like you do with your other vacation/sick time. In order to maintain it as a non-payable benefit at separation, you have to treat PLAWA leave as distinct from vacation and sick leave.

The Cook County Ordinance

The Cook County Ordinance largely mirrors the PLAWA. Be aware that some districts, villages, or municipal bodies in Cook County may have chosen to opt-out of the Cook County Ordinance. It is our opinion that those bodies are subject to the PLAWA. However, from a practical standpoint, the Cook County Ordinance mirrors the PLAWA in all substantive arenas: It carries the same rate of accrual, the same freedoms and limits for the employee in claiming the leave, and the same guidelines for whether or not the leave has to be compensated to the employee at separation. However, to be clear, the PLAWA exempts Cook County from its terms, so while the end result may be the same, employees in Cook County are not subject to the PLAWA, they are subject to the Ordinance.

City of Chicago Employees

Finally, if your employees work in the City of Chicago, they are entitled to the greatest benefits. As with Cook County, the City of Chicago is exempt from the PLAWA, so you do not have to provide PLAWA benefits in addition to City of Chicago benefits. The Chicago Ordinance does not apply to employers with fewer than 4 employees.

Whether your employees are covered by the City Ordinance is determined by how much time they spend working in Chicago. Note that this is based on the employee’s work, not on your business. If your employee is physically working within Chicago for two hours in a two-week period, they are covered. This includes compensable commute time and excludes non-compensable commute time.

Employees who are covered by the Act are entitled to both paid leave and paid sick leave, which are separate benefits. Both of these types of paid leave accrue at a more generous rate than either PLAWA or Cook County, at a rate of 1 hour of paid leave and 1 hour of paid sick leave for every 35 hours worked. So, the accrual is twice the amount of leave and at a faster rate. There is a cap on this accrual at 40 hours each in a given 12-month period.

The city of Chicago also differs in how roll-overs work. Roll-overs cannot be circumvented by frontloading the full 40 hours of paid leave and 40 hours of sick leave, but there’s also a base roll-over of only 16 hours from a 12-month period to the next for paid leave. Sick leave is even more generous, allowing up to 80 hours to roll-over. These are base figures for roll-over, and need to be increased any time you deny an employee the use of their leave in such a way that it “prohibits such Covered Employee from meaningfully having access to such paid time off.” It is possible toavoid rollovers if you frontload unlimited paid leave for any reason. This also comes with the benefit of potentially not having to pay any unused leave at separation, by presuming 40 hours and deducting from that 40 hours the number of hours of unlimited leave that the employee used in the preceding 12-month period.

Paid leave has the same 90 day waiting period as found in the PLAWA and Cook County Ordinance, but paid sick leave can be claimed after only a 30 day wait. Paid leave follows the same rules regarding notice of 7 days and not being allowed to request documentation or reason for the leave, though you have more options to deny paid leave, so long as it is pursuant to a written policy that complies with the rules of the Office of Labor Standards.

Paid sick leave can be used when the employee or a family member is ill, for domestic violence incidents (including legal proceedings arising from domestic violence), when the employee’s place of business is closed by order of a public official due to a public health emergency, when the employee needs to care for a family member whose school, class, or place of care is closed, and when the employee follows an official order issued to stay at home or otherwise quarantine/isolate. If an employee uses paid sick leave for three consecutive days, you may require certification. The certification is fulfilled by just one applicable document, whether that document is a doctor’s note for illness, an order for the closing of a site, or a letter from a lawyer or police officer regarding domestic violence.

Finally, there are also different rules for paying out unused leave at the time of an employee’s separation. If you have 50 or fewer employees, you do not have to pay out unused leave. If you have between 51 and 100 employees, you have to pay out up to 16 unused hours. If you have 101 or more employees, you have to pay out all unused paid leave. Bear in mind that this is paid leave, not paid sick leave.

Obviously, the field of paid leave, and in particular whether your existing policies comply with these acts, has grown complicated. It is vital that you review your policies and consider whether you are meeting the minimum requirements of whichever of these acts covers you, whether your current policies need to be changed to comply with the applicable laws, and whether you need to restructure your leave to maintain your goals in how you will treat your employees and their leave going forward. Wessels Sherman P.C. is here to help if you are worried about whether you are doing enough to comply with the law.

Questions? Contact John Simmons in our Davenport office by email or at 563-333-9102.