Proposed Regulations for Illinois’ Paid Leave for All Workers Act
The Illinois Department of Labor recently released proposed administrative rules for the Paid Leave for All Workers Act. While the proposed rules are not the final rules, it is very possible that the final rules will not be available prior to the law’s January 1, 2024, effective date. While there may be minor differences between the final and proposed rules, employers impacted by the law would be well served to review the proposed rules in their current state to understand how to comply with the law. Some proposed rules are discussed below. Please note that only selected portions of the proposed rules are highlighted below.
Pre-Existing Leave Policies
The proposed rules provide that an employer with a “qualifying pre-existing paid leave policy” does not need to modify that policy to comply with the law. For purposes of compliance, a qualifying pre-existing paid leave policy is a paid leave policy that an employer has enacted prior to January 1, 2024, allowing an employee to take at least 40 hours of leave. Most employers who already have a policy that allows all employees to take at least 40 hours of paid leave for any reason of the employee’s choosing are likely compliant with the new state rules.
Frontloading Paid Leave
Employers that plan to frontload the required amount of paid leave can also look to the proposed rules for guidance on frontloading. Employers planning to utilize frontloading must provide a written notice to employees telling them how many hours of paid leave they will receive on or before the first day of employment or on or before the first day of the 12-month period.
Under the proposed rule, employers are permitted to frontload a “pro rata” or proportional amount of leave for part-time employees consistent with the employee’s anticipated number of hours worked. If the employee ends up working more than their anticipated amount of hours, the employee must be allowed to accrue additional paid leave. The amount of paid leave cannot be reduced if an employee ends up working fewer hours than anticipated. A proportional amount of frontloaded hours may also be provided to employees who begin work in the middle of an employer’s 12-month period.
Finally, the proposed rules permit frontloading leave for certain groups of employees while requiring other groups of employees to accrue hours of leave, provided the distinctions between groups are not made in a way that violates state or federal law.
Denying Use of Leave
The proposed rules also detail the steps an employer must take if they wish to deny a request to use paid leave. Employers are able to deny a request for leave if they disclose to employees in writing their written policy for considering leave requests including any basis for denial. The policy must establish certain limited circumstances in which leave may be denied in order to meet the employer’s core operational needs. The factors to consider when denying leave due to operational needs are:
- Whether the employer provides a need or service critical to the health, safety, or welfare of the people of Illinois;
- Whether similarly situated employees are treated the same for the purposes of reviewing, approving, and denying paid leave;
- Whether granting leave during the time period would significantly impact the business operations due the employer’s size; and
- Whether the employee has adequate opportunity to use all paid leave they are entitled to over a 12-month period.
Employers who deny leave must provide the employee with a record of each denied request and the employer’s reason for denial.
Notice Requirement
The proposed rules add to the existing statutory requirement to post a notice regarding an employee’s rights under the Paid Leave for All Workers Act. In addition to the required notice, a written statement summarizing the employer’s written leave policy, including how to receive a copy of the leave policy, must be posted.
Additionally, employers would be required to provide the unused balance of paid leave on a paystub or form furnished to an employee to notify them of wage payments and deductions.
When the standard notice is available from the State of Illinois, it will be published on the Illinois Department of Labor Required Posters and Disclosures website.
Key Takeaways:
While there may be differences between these proposed rules and the final rules, employers may want to review the proposed rules to gain a better understanding of what it takes to be compliant with the Illinois Paid Leave for All Workers Act when it becomes effective on January 1, 2024.
The information provided is a summary of laws and regulations relating to employee benefit plan compliance. This information should not be construed as legal advice. In all cases, employers should consult with their own legal counsel.
