Beginning January 1, 2024, employees in Illinois will accrue Paid Leave, which they’ll be able to use for any purpose. We’ll send another alert closer to the effective date. In the meantime, here are the highlights.

Applicability
The new law applies to employers of all sizes and almost all employees are covered, with limited exceptions. Employers are exempt if they’re required to provide paid sick leave under the sick leave laws in Chicago or Cook County.

Accrual and Carryover
Employees will accrue Paid Leave at a rate of one hour of Paid Leave for every 40 hours worked. Employers can calculate exempt employee accrual based on a 40-hour workweek (even if the employee generally works more than that) or they can use their normal workweek if they regularly work less than 40 hours.

Employers can cap accrual at 40 hours per year. Unused Paid Leave must be carried over from year to year.

Frontloading
Instead of using an hour-by-hour accrual system, employers can frontload an employee’s Paid Leave bank with 40 hours at the beginning of each year, in which case they don’t need to allow carryover of unused Paid Leave.

Use
Employees can begin to use their Paid Leave on March 31, 2024, or after 90 days of employment, whichever is later. Employers may cap use of leave at 40 hours per year.

Employees may use Paid Leave for any reason. Employers cannot require documentation to support an employee’s request for Paid Leave.

Employees are entitled to determine how much Paid Leave to use, though employers can require them to use their Paid Leave in minimum increments of two hours, or their entire workday, if shorter than two hours.

Notice
Employers are required to provide employees with notice about their Paid Leave rights by displaying a poster at each worksite and providing individual notice to each employee. Employers that have a handbook or policy manual must include it there as well. The Illinois Department of Labor (IDOL) will create the required notice.

Employers can require employees to provide seven days’ notice for foreseeable leave and as much notice as is practicable for unforeseeable leave.

Payout
Employers aren’t required to pay out unused Paid Leave when an employee quits or is terminated. Employees who are rehired within 12 months of separation must have their unused Paid Leave restored.

Existing Policies
Employers can use their existing vacation or paid time off policy to fulfill their obligations under the new Paid Leave law, as long as it offers equal or better benefits. In that case, however, unused vacation or paid time off must be paid out when an employee separates from employment (as required for vacation and paid time off under state law).