The Illinois Department of Labor has published final rules implementing the Paid Leave for All Workers Act, which requires most Illinois employers to provide up to 40 hours of paid leave per year for any purpose. See prior Benefit Beat articles here and here.

Note: this law does not apply to employees entitled to the Chicago paid leave described above. See FAQs issued by the Illinois Department of Labor.

Following is a brief summary of the final rules which took effect on April 30, 2024.

Qualifying Preexisting Paid Leave Policy

The final rules confirm that if an employer has a bona fide paid leave policy that existed prior to January 1, 2024, and satisfies the minimum amount of leave required and offers the employee the option to take paid leave for any reason, then the employer is not required to modify the existing paid leave policy to comply with the act. The final rules include examples of qualifying preexisting paid leave policies.

Accrual and carryover

An employee is entitled to accrue one hour of paid leave for every 40 hours worked up to 40 hours in a 12-month period. The final rules provide that an employer may choose to provide leave in smaller increments as long as the rate of benefit accrual is at least one hour of paid leave for every 40 hours worked. Work periods must be counted on a minute-by-minute basis or may be rounded up to the next 15 minutes. An employer may not round down time worked. The final rules provide examples of accrual calculations.

An employer that provides paid leave via an accrual system, must allow employees to carry over any unused leave annually from one 12-month period to the next 12-month period. The final rules provide that an employer may limit the carryover amount to 40 hours.

Denial of paid leave

The final rules provide that an employer may deny a request for paid leave if all of the following conditions are met:

1. The employer's policy for considering leave requests under the Act, including any basis for denial under this Section is disclosed to the employee, in writing, consistent with this Section; and
2. The employer's paid leave policy establishes certain limited circumstances in which paid leave may be denied in order to meet the employer's operational needs for the requested time period; and
3. As a matter of fact, the employer’s policy is 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.

Employer notice and record keeping

Employers must post a notice in a conspicuous place in the workplace and maintain records for three years showing hours worked, paid leave accrued and used, and remaining paid leave balance for each employee.

According to the final rules, the workplace poster must be provided in English and any other language commonly spoken by a significant percentage of employees. The poster will be prepared by the Illinois Department of Labor.

Individual notice of leave availability and usage

The final rules add the following additional requirements:

• Written notice that the employer is providing paid leave as required using a preexisting paid leave policy within 30 days of the start of employment.
• If the employer frontloads paid leave, written notice to the employee informing the employee of how many paid leave hours the employee is receiving on or before the first day of employment or the first day of the 12-month period.  
• If the employer changes its paid leave policy, written notice to the employee as soon as practical of the changes to the policy. 

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.