The Illinois Department of Labor (IDOL) has published proposed rules regarding the Illinois Paid Leave for All Workers Act (PLAWA), which will not be finalized until after PLAWA becomes effective January 1, 2024. Additionally, IDOL released FAQs that clarified how employers’ existing paid leave policies could satisfy the requirements of PLAWA.

Proposed Regulations

• Pre-existing leave policies: An employer with a bona fide leave policy enacted prior to January 1, 2024, which allows employees to take at least 40 hours of leave for any reason, will not need to change their leave policy to satisfy PLAWA requirements – even if the PTO policy does not align with other PLAWA provisions, such as advance notice, carryover, or use increments.
• Accrual and carryover:
  • The proposed regulations specify that leave must accrue on a fractional basis, in 15-minute increments, with time worked always rounded up to the nearest 15 minutes. In other words, an employee who works one hour and one minute would be considered to have worked 1.25 hours for the purpose of calculating accrued leave.
  • PLAWA includes a provision stating that “all” accrued, unused leave must carry over to the following year. The proposed regulations state that employers may establish a reasonable policy restricting carryover to 80 hours of unused paid leave, but do not provide additional detail about how a carryover cap may be imposed.
• Front-loaded leave:
  • The proposed regulations allow for proration of front-loaded leave for new hires and part-time employees. The front-loaded leave must be equal to or greater than what the employee would accrue in the timeframe the front-loaded leave is intended to cover.
  • Under the proposed regulations, employers may choose to front-load leave for some employees and not others, as long as they do not differentiate in a way that is discriminatory.
• Paid Leave Accrual: PLAWA allows employers to set a minimum use increment of two hours of paid leave, but the regulations state that employees may use their paid leave in one-hour increments thereafter. In other words, employees may use three hours of paid leave, but may not use only one hour.
• Paid Leave Use: While the regulations reiterate that employees may choose to use their leave at their discretion, they also allow for employers to deny leave requests due to “operational necessity” if the employer maintains a written policy outlining how leave requests will be considered and on what basis they will be denied. Employers must provide employees with a record of each denied request and the denial reason. Relevant factors for consideration when denying leave include
  • 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 a particular time period would significantly impact the business operations due to the employer’s size
  • whether the employee has adequate opportunity to use all paid leave time they are entitled to over a 12-month period
• Remote employees: The proposed regulations provide a definition of “employee” that helps to clarify coverage for employees working remotely. An employee is covered under PLAWA if they
  • work for an employer based or headquartered in Illinois, and primarily perform their work in Illinois
  • primarily perform work in Illinois, for am employer with substantial business in the state
  • primarily work, and reside, in Illinois
• Notice Requirements: In addition to the notice requirements in PLAWA, the proposed regulations add several other employer obligations. Employers must:  
  • provide employees with a paid leave policy within 90 days after January 1, 2024 for existing employees, or before or upon commencement of employment for new employees hired after the PLAWA effective date
  • post a summary, in English and in any other language commonly spoken in the workplace, of the employer’s leave policy and how an employee can obtain a copy of it
  • provide an accounting of each employee’s paid leave accrual and use with each payroll and at the employee’s request
• Rate of pay: Employees must be paid their average rate of pay; however, employees who customarily receive gratuities or commissions as part of their remuneration must be paid the applicable minimum wage in the jurisdiction in which they are employed, at minimum.