9 Key Provisions of the Paid Leave for All Workers Act

The Illinois Paid Leave for All Workers Act, effective January 1, 2024, guarantees nearly all workers in the state up to one week of paid leave annually.

This notice, mandates that all employers in the State of Illinois track the hours earned and used for Paid Time Off (PTO) purposes. Non-compliance with this new law will result in penalties, fines, damages and additional legal fees.

Here are 9 Key Provisions of the new bill:

1.    Earned Leave

• Workers can earn up to five days of paid leave per year.

• No requirement for workers to provide a reason for their time-off request.

2.    Accrual and Eligibility

• Employees accrue .025 hours of PTO per hour worked (one hour of paid leave for every 40 hours).

• Employers can set up to a 90 day waiting period to use the PTO

3.    Exceptions

• Certain categories of workers, such as seasonal employees and federal employees are exempt

4.    Effective Date and Coverage

• The law came into effect on January 1, 2024

• Applies to nearly all workers in Illinois

• Additional clarification is needed regarding seasonal and temporary workers

5.    Usage of Leave

• Workers must be able to use their earned PTO after 90 days of employment

• Leave can be used for any reason, not limited to health-related issues

6.    Accrual and Carryover

• Salaried workers are entitled to a minimum of 40 hours of paid leave annually

• Unused leave can carry over, but employers are not obligated to cash out unused hours

7.    Penalties for Violations

• Employers violating the law may face penalties, fines, compensatory damages, and attorney’s fees

• Penalties include up to $1,000 per affected employee, $2,500 per violation (paid to the IL Department of Labor), and equitable relief

• Failure to post the required notice incurs penalties of $500 for the first violation and $1,000 for subsequent violations.

8.    Payment During Leave

• Workers receive their full wage during leave.

• Tipped workers are paid the minimum wage in their respective location.

• Employers cannot require employees to find their own replacements during leave.

9.    Review and Compliance

• Employers are advised to review existing leave policies and make necessary adjustments

• Consideration should be given to tracking and administering leave separately or integrating it with other leave policies.

• Employers may want to consider characterizing all PTO as "Any Use PTO" to reduce the risk of paying remaining PTO upon termination of employees.

The Illinois Department of Labor will be administering and enforcing the law.  Illinois employers should be aware of the new law to ensure compliance with its provisions to avoid penalties and legal consequences.

We are strongly recommending that employers consider using Monotelo Advisors or another full-service payroll company to run their weekly, biweekly or monthly payroll needs. At Monotelo, we have the tools in place to seamlessly manage your payroll, reduce the risk of fines and penalties, and keep you in compliance with state and federal laws.

We will continue to monitor the Illinois Department of Labor for guidance on regulations and keep you apprised of any new information.

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