Illinois Sets Out Proposed Regulations for Paid Leave for All Workers Act

Author: Robert S. Teachout, XpertHR Legal Editor

November 10, 2023

The Illinois Department of Labor (IDOL) has issued proposed regulations for implementing the state's Paid Leave for All Workers Act (PLAWA), giving employers their first look at how the agency will be enforcing the new law.

Effective January 1, 2024, the PLAWA requires covered employers to provide up to 40 hours of annual paid time off that employees may use for any reason. The IDOL had previously issued Frequently Asked Questions (FAQs) providing information on highlighted topics and answering questions about how the agency may interpret the law. However, the FAQs do not carry the force of law or regulation.

The proposed regulations clarify some of the key requirements of PLAWA that employers said were ambiguous, including exemptions for qualified PTO policies and who is considered a covered remote worker.

Under the proposed rules, an employer that currently has a paid leave policy in place when the PLAWA goes into effect is not required to modify the policy if it provides at least 40 hours of paid leave that an employee has the option to use for any reason they choose. However, if the employer modifies their current PTO policy in such a way that it no longer provides such benefits, then the policy will no longer be exempt.

A remote worker in defined in the regulations as one who:

• Primarily performs work in Illinois for an employer whose base of operations, regional office or headquarters is in Illinois;
• Primarily performs work in Illinois for an employer that performs substantial business in the state, markets its services in the state, or maintains a registered agent within the state of Illinois; or
• Primarily performs work in Illinois and resides in Illinois.

The proposed regulations are more complicated with regards to leave accrual and carry-overs. While leave is accrued at the rate of one hour for every 40 hours worked under the PLAWA, it must be calculated on a 15-minute work increment basis. However, the proposed regulations mandate that employers round up any fraction of work hours, leading some to complain that the regulations may allow employees to accrue leave a faster than the law allows. For example, if an employee works 46 minutes, they will still accrue a full hour's worth of leave, and if they work one hour and one minute, they will accrue an hour and 15 minutes' worth of leave.

There is a 45-day period for employers to submit comments, which will close on December 18. However, employers should review their PTO policies now and prepare for any necessary revisions, as there is only a short window before the PLAWA and its regulations are scheduled to take effect.