Like the Family and Medical Leave (FMLA) and Paid Family and Medical Leave (PFML) laws, Illinois’ Paid Leave for All Workers Act (PLAWA) seeks to ease the struggles of families who need to take leave to care for sick family members or take a mental health day by enforcing paid time off for most kinds of workers.

While this act is great news for employees, and will help them when family or medical struggles arise, it can feel like a burden to small businesses.

“This is an administrative burden for small businesses and the cost to figure out this new law (with new guidance coming by end of March), and execute upon this new law is significant,” notes Jennifer Preston, HR and Recruiting Consultant at FlexHR.

As an Illinois business owner, you’ll need to understand the particulars of this new law and how to best plan for these costs. We’ve answered some of the most important questions you may have below, but you also might want to check what the Illinois Department of Labor has to say.

How Do Paid Leave Hours Accrue?

Effective January 1, 2024, the Illinois Paid Leave for All Workers Act provides most types of workers with 40 hours of paid leave, which accrues over a 12-month period.

The short version is that paid leave hours accrue at a rate of 1 hour per 40 hours worked. Accrual starts on January 1, 2024 or first day of employment.

 

 

 

Who Gets Paid Leave?

All private and public employers, including State and local workers in Illinois, must provide full-time, part-time, temporary and seasonal employees with paid leave at the rate of accrual mentioned above. Included are housekeepers, cleaners, nannies, and many more.

However, this new act does not include many school districts, park districts, a student attending college classes where they are employed on a temporary basis, and many more.

What If Employees Already Get Paid Leave?

If you already have a policy providing 40 hours of paid leave over the course of 12 months, you do not need to create a new one.

As an employer, you can decide what the 12 month period is. If you change the period, you will need to update your employees.

How Do Hours Accrue, and Do They Roll Over?

To make things easier on yourself, you can frontload the hours to your employees at the beginning of the 12-month period by giving them the full amount of hours they would have eventually accrued in their paid time off “bank.”

For example, if an employee works 20 hours a week, you would frontload a total of 26 hours for them to use throughout the year. Frontloaded hours would not roll over into the next 12-month period.

If you choose to use the accrual method, you will need to keep track of the number of hours they have worked, awarding them 1 hour of paid time off each time they work 40 hours. For example, if a part-time employee works 10 hours a week, it would take 4 weeks for them to accrue 1 hour of paid time off. If an employee works 40 hours a week, they would earn 1 hour of paid time off in one week.

After the 12-month period, any hours unused can roll over into the next period. However, you are not obligated to allow them to accrue and use more than 40 hours of paid time off total in a year. Any hours that roll over could be counted toward the 40 hours in that 12 month period.

If an employee is terminated and has remaining paid time off hours, you are not required to payout the unused leave.

Employer and Employee Responsibilities

Employees can use their leave 90 days after it has started to accrue. This would mean employees can use their accrued leave starting March 31st or 90 days after being hired if they are hired later in the year.

Employees can decide how many hours they want to use, but should give you proper notice in accordance with your policies.

Your policy should allow for your employee to take time off for any reason, and should state the amount of notice they need to give you.

As an employer, you cannot require an employee to give a reason or any documentation to take their paid leave, but you can require them to give at least 7 days notice.

As an Illinois employer, you are obligated to inform and educate each employee about PLAWA and what your policies will be. You will need to include necessary signage in your handbook, give it to your employees, and hang it in a visible area at your workplace.

How FlexHR Can Help

We’re here to offer support to help you understand your responsibilities and help you plan to minimize your costs as an employer. We will spend the time necessary on the phone with you and your attorney to iron out any details as you seek to comply with this new law.

We can help clarify if your workers are exempt or non-exempt and how much they should be getting paid for the time off, especially if they earn tips or other income.

We will be keeping tabs on the changes and new guidance on this law, so be sure to consult with us today!

Contact us now to discuss your HR needs.