The New Year Brings New Employer Obligations in Illinois

At a Glance

• The Illinois State Legislature and local municipalities were busy passing and implementing new employment laws in 2023. The new laws and regulations passed in the last year include, among many others, changes to paid leave for workers and amendments to the “ban the box” ordinance in Chicago.

2023 was certainly a monumental year for Illinois employers, with increased legislative activity in Springfield and significant developments in both Cook County and the City of Chicago. As we settle into 2024, it may be a good time to look back at some of the legal developments impacting employers in the Land of Lincoln, including employers who may have only one employee working remotely in the state, city and/or county.

Illinois Paid Leave for All Workers Act

We could not begin this article with anything other than the new Illinois Paid Leave for All Workers Act, 820 ILCS 192/1, et seq. (PLAWA), which served as a harbinger for new paid leave obligations in both Cook County and the City of Chicago and may be a model for other states considering such laws.

As of January 1, 2024, employees who primarily work in Illinois are entitled to accrue one hour of paid leave for every 40 hours worked, up to a minimum of 40 hours annually, to use for any reason. This time can be accrued (in which case up to 80 hours of unused time can be carried over to the following year) or front loaded (at the beginning of employment or the applicable 12-month period). Frontloaded time does not carryover and hours can be prorated for part-time employees. Employers cannot require an employee to provide a reason for taking the leave or require documentation for the leave but can cap the use of leave at 40 hours annually. An employer may require an employee to provide notice of the need for leave (seven days if the leave is foreseeable and “as soon as practically possible” if the leave is unforeseeable). Significantly, employers who are already required by a local law or ordinance to provide paid time, including paid sick leave, are exempt from PLAWA’s requirements, unless after January 1, 2024, the applicable local law or ordinance is amended in such a way that it provides less paid leave benefits, rights, or remedies than PLAWA. Furthermore, PLAWA and its associated rules provide that an employer who has a qualifying pre-existing policy under which employees can earn at least 40 hours of paid leave in a 12-month period that can be used for any reason can use that policy to meet its’ obligations under PLAWA. There are numerous other components to this new law, including the limited circumstances under which an employer can deny a request for leave, recordkeeping and notice requirements, a 90-day waiting period to use leave, minimum leave increments, and the standard that applies to any waiver of PLAWA in a collective bargaining agreement. We will have to wait to see how the Illinois Department of Labor (IDOL) tackles enforcement of this new paid leave requirement given all the other laws that the IDOL is tasked with enforcing.

Cook County Paid Leave Ordinance

On December 14, 2023, Cook County (the County) passed a new Paid Leave Ordinance (PLO), Ordinance 24-0583, which largely tracks PLAWA. This new paid leave ordinance replaces the County’s sick leave ordinance. While the County’s PLO went into effect on December 31, 2023, the County has notified employers that it will delay enforcement of the PLO until February 1, 2024. Under the PLO, employees working in Cook County are eligible to accrue one hour of paid leave for every 40 hours worked, up to a minimum of 40 hours annually, that can be used for any reason. Like PLAWA, this paid time can be accrued or frontloaded, use can be subject to a waiting period, frontloaded time can be prorated for part-time workers, employers are prohibited from requiring that employees provide a reason for the leave or documentation to support it, the use of leave can be subject to certain limited notice requirements, and employers have notice and recordkeeping requirements. Similar to PLAWA, employers who provide any type of paid leave policy that satisfies the minimum amount of leave required by the PLO are not required to modify their policy if employees can take that leave for any reason. Notably, there is no longer a requirement that the employee’s employer have a place of business in Cook County, and those municipalities that had previously opted out of the prior Sick Leave Ordinance under their home rule authority are subject to the new PLO, at least up and until those municipalities take the necessary steps to opt out of the PLO. Given the similarities between the PLO and PLAWA, however, employers in those municipalities that had opted out should have already taken steps to come into compliance with PLAWA as of January 1, 2024, and therefore may have had little to do in the face of this new Cook County paid leave requirement.    

Chicago Paid Leave and Paid Sick Leave Ordinance

If you were tracking Chicago’s journey into the paid leave conversation you may have a bit of whiplash. Indeed, Chicago initially passed a new paid leave and paid sick leave ordinance on November 9, 2023, which had employers scrambling to figure out how to comply with greatly expanded leave obligations before the December 31, 2023, effective date. Facing great pressure from the business community, on December 13, 2023, the Chicago City Council passed a substitute ordinance that delayed the effective date of the new ordinance until July 1, 2024 (and narrowed the definition of a “covered employee”).

The new Paid Leave and Paid Sick Leave Ordinance (PLPSL Ordinance) will replace the existing Sick Leave Ordinance, such that effective July 1, 2024, employees in Chicago will be entitled to accrue up to 40 hours of paid leave (to use for any reason) and 40 hours of paid sick leave (to use for one of the reasons described in the ordinance) annually. A covered employee is one who works at least 80 hours for an employer within any 120-day period while in the geographic boundaries of Chicago. Once an employee reaches this threshold, the employee will remain a covered employee for the remainder of the time that the employee works for the employer. Much like PLAWA and the new Cook County PLO, the City’s PLPSL Ordinance contains recordkeeping and notice requirements for employers, a 90-day waiting period for paid leave (30 days for paid sick leave), carryover requirements if the time is accrued, prohibits requiring the employee to provide a reason or documentation to use the paid leave earned under the ordinance, notice requirements for use of leave, and the limited circumstances under which an employer can deny an employee’s request to use paid leave. Unlike PLAWA and the new Cook County PLO, the city’s new PLPSL Ordinance requires payout of any accrued but unused paid leave upon termination of employment if the employee works for a large employer (more than 100 covered employees) or a medium employer (51-100 covered employees), with medium employer’s enjoying a 16-hour payout cap in the first year. Although employers now have until July 1, 2024, to become compliant with the City’s new leave requirements, some employers may have already implemented a new paid leave policy to complement their existing sick leave obligations to address any obligations they may have under Cook County’s new PLO Ordinance as of December 31, 2023.

Amendment to Chicago’s “Ban the Box” Ordinance (Human Rights Ordinance)

In 2023, the City of Chicago passed O2023-1329, which amended the city’s Human Rights Ordinance to expand “ban the box” restrictions placed on employers in the City. As of April 24, 2023, employers are prohibited from requesting or using conviction records as a basis to refuse to hire, promote, renew employment, discharge, discipline, or change terms or conditions of employment, unless (1) applicable law requires excluding the applicant or employee, (2) a fidelity or similar bond is required for the position and the conviction would disqualify the person, (3) there is a “substantial relationship” between one or more of the criminal offenses in the person's conviction record and the employment sought or held; or (4) the granting or continuation of the employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public. In determining whether (3) or (4) above have been satisfied, an employer must engage in an individualized assessment. If an employer makes a preliminary decision that a conviction record disqualifies a potential employee, the employer must provide written notice of the specific reason for the decision and give the individual at least five business days to respond before making a final decision. An employer must also provide written notice of the final decision and notify the individual of the right to file a complaint with the Chicago Commission on Human Relations. Covered employees include anyone working within the geographic boundaries of the City of Chicago for an employer who has a facility in Chicago or is subject to the city’s licensing requirements. 

Amendment to Day and Temporary Labor Services Act

The Day and Temporary Labor Services Act (820 ILCS 175/1, et seq.) was amended on August 4, 2023, to impose significant new obligations on labor services agencies and their third-party clients subject to this law. The most significant obligation is an equal pay component that requires regulated agencies to pay laborers assigned to a client for more than 90 calendar days (in any 12-month period, whether consecutively or intermittently) at least the rate of pay and equivalent benefits as the lowest paid directly hired employee of the client with the same level of seniority and performing the same or substantially similar work. If there is no directly hired comparative employee of the client, the laborer must be paid at least the same rate and given equivalent benefits of the lowest paid directly hired employee of the client with the closest level of seniority. Notably, the amended law permits a covered agency to pay the hourly cash equivalent of the actual cost of benefits in lieu of providing equivalent benefits, unless prohibited by state or federal law. Third-party clients of those agencies must share certain information with the relevant agency to ensure that this equal pay requirement is satisfied. Soon after the amendment went into effect, the Joint Commission on Administrative Rules (JCAR) objected to the Illinois Department of Labor (IDOL)’s emergency rules, which were presumably designed to provide employers with guidance on how to comply with this new equal pay obligation. The JCAR believed that the emergency rules were too vague to provide meaningful guidance to employers who were already grappling with how to determine valid comparators and calculate the hourly cash equivalent of benefits. Soon after, the Illinois legislature passed an amendment to the law that delayed the effective date of the equal pay requirements to April 1, 2024. As that deadline approaches, we expect additional guidance from the IDOL to address the JCAR’s concerns about the need to provide meaningful guidance to employers subject to this law. 

A less controversial amendment to the Day and Temporary Labor Service Act went into effect on January 1, 2024. Under the amendment, all covered agencies who have laborers who communicate with the agency by electronic communication must provide all required notices by email to those laborers, or make them available on a website, regularly used by an employer to communicate work-related information to laborers (which they can regularly access). This electronic distribution requirement expands upon the existing requirement that such agencies post in the workplace certain notices required by the IDOL summarizing this law and a toll-free number for laborers or the public to file wage dispute complaints and other alleged violations. The required postings are available on the IDOL’s website.

Amendment to Gender Violence Act

Effective July 28, 2023, the Gender Violence Act (740 ILCS 82/1, et seq.) permits a person who is subject to gender-related violence to bring a civil lawsuit against the perpetrator. This creates potential liability for an employer if such violence is committed in the workplace by an employee or agent of the employer when the interaction giving rise to the violence arises out of and in the course of employment. Liability only extends to gender-related violence that occurs: (i) while the employee was directly performing his/her job duties and the violence was the proximate cause of the injury; or (ii) while the employer's agent was directly involved in the violence and the performance of the contracted work was the proximate cause of the injury. And an employer is only liable if it: (1) failed to supervise, train, or monitor the employee-perpetrator, or (2) failed to investigate complaints to a supervisor/manager or another designed person of similar conduct by an employee/agent of the employer and the employer failed to take remedial measures. An employer can potentially avoid liability if it has provided the sexual harassment training required by the Illinois Human Rights Act. This should give employers another incentive to get this training done in a timely manner. 

Amendment to Illinois Wage Payment and Collection Act

Effective July 28, 2023, the Illinois Wage Payment and Collection Act, 820 ILCS 115/1, et. seq., was amended to add a new worksite posting requirement for certain primary contractors and subcontractors in the construction industry (i.e., those that make or take a contract in Illinois for the erection, construction, alteration, or repair of a building, structure or other private work in Illinois where the aggregate costs of the project exceed $20,000). These contractors must post the IDOL required notice at job sites in a conspicuous place accessible to all laborers, workers and mechanics.

Amendment to Personnel Record Review Act

Effective January 1, 2024, the Illinois Personnel Record Review Act, 820 ILCS 40/1, et seq., requires all employers in Illinois to send an employee’s personal records via email or mail if the employee requests delivery in that manner. Pre-amendment, an employee had to demonstrate that the employee was unable to review the personnel record at the employer’s place of business and request that the records be mailed to the employee. The amendment provides a right to have the records mailed or emailed, regardless of whether an employee could review the records onsite.

Amendment to Victim’s Economic Security and Safety Act

Effective January 1, 2024, the Victims Economic Security and Safety Act, 820 ILCS 180/1, et seq., extends the right to take unpaid leave for certain reasons related to a family or household member killed in a crime of violence. Namely, employees may take leave to (i) attend the funeral or alternative to a funeral or wake, (ii) make arrangements necessitated by the death, or (iii) grieve the individual's death. An employee is entitled to use a cumulative total of not more than two workweeks (10 workdays) of unpaid leave for reasons (i) through (iii), and that leave must be completed within 60 days after the employee receives notice of the death of the victim.

Child Extended Bereavement Leave Act

Effective January 1, 2024, the Child Extended Bereavement Leave Act, 820 ICLS 156/1 et seq., permits an employee who loses a child to suicide or homicide to take up to six or 12 weeks of job-protected leave, the amount of which depends on the size of the employer, to grieve the child’s death. This new leave entitlement applies to any employer with at least 50 full-time employees in Illinois. Leave can be used intermittently but must be used within one year of the suicide or homicide. This unpaid leave may be substituted with paid leave under any law, collective bargaining unit, or benefits program. An employee taking leave under this law may not take leave under the Illinois Child Bereavement Act for the same child. 

Employee Blood and Organ Donation Leave Act (Amendment to Employee Blood Donation Leave Act)

Effective January 1, 2024, pursuant to 820 ILCS 149/1, et seq., any employers with 51 or more employees must permit an employee to take up to 10 days of paid leave in any 12-month period to serve as an organ donor. The law’s blood donation obligations remain the same. 

Equal Pay Registration Requirements and Pay Transparency (Amendments to the Illinois Equal Pay Act)

Under the Illinois Equal Pay Act of 2003, 820 ILCS 112/1, et seq., private businesses with 100 or more employees in Illinois must apply to the IDOL to obtain an Equal Pay Registration Certificate (EPRC) by March 24, 2024, and then recertify every two years thereafter. To obtain an EPRC, a covered business must submit certain pay, demographic, and other data to demonstrate compliance with the law’s equal pay requirements. In 2023, the Equal Pay Act was amended to eliminate the option to provide an EEO-1 report in lieu of a list created by the employer that contains the required pay, demographic, and other information, and to define what is considered “compensation” when an employer certifies that the average compensation for its female or minority employees is not consistently below that of its male or non-minority employees in each major job category. 

Illinois passed another, and certainly more significant, amendment to the Equal Pay Act, but this amendment does not take effect until January 1, 2025. Under this amendment, employers with 15 or more employees must include the "pay scale and benefits" for a position in any specific job posting for positions that will either (1) be physically performed, at least in part, in Illinois, or (2) be performed outside of Illinois but the employee reports to a supervisor, office, or other work site in Illinois. Pay scale and benefits means the “wage or salary, or wage or salary range, and a general description of the benefits and other compensation, including, but not limited to, bonuses, stock options, or other incentives the employer reasonably expects in good faith to offer for the position, set by reference to applicable pay scale, the previously determined range for the position, the actual range of others currently holding equivalent positions, or the budgeted amount for the position, as applicable.” 820 ILCS 112/5. Employers must announce, post or otherwise make known all opportunities for promotion to all current employees no later than 14 days after making an external job posting for the position. If an employer uses a third party for job postings, the pay scale and benefits information must be provided to that party for posting. With this amendment, Illinois joined several other states that have enacted similar pay transparency laws. 

Freelance Worker Protection Act

Similar to initiatives to provide protections to independent contractors in other states, Illinois passed the Freelance Worker Protection Act, 820 ILCS 193/1, et seq., which takes effect on July 1, 2024. This Act requires that a contracting entity who retains a freelance worker to provide products or services have a written agreement with the worker that contains certain minimum terms. Some of those terms include an itemization of all products or services to be provided and their value, the rate and method of compensation along with the date of payment or mechanism for determining that date, which must be no later than 30 days after the products or services are provided. Notably, except as otherwise provided by law, a freelance worker must be paid the contracted compensation on or before the due date (or if not specified, within 30 days after completion of the freelance worker's services under the contract). Once a worker has commenced preparation of the product or performance of the services, the contracting entity cannot require as a condition of timely payment that the worker accept less compensation than the amount of the contracted compensation. This Act also prohibits discrimination or retaliation against a freelance worker for exercising their rights under the Act. The law defines a “freelance worker” as “a natural person who is hired or retained as an independent contractor by a contracting entity to provide products or services in Illinois or for a contracting entity located in Illinois in exchange for an amount equal to or greater than $500, either in a single contract or when aggregated with all contracts for products or services between the same contracting entity and the freelance worker during the immediately preceding 120 days.” 820 ILCS 193/5. 

Transportation Benefits Program Act

Illinois passed the Transportation Benefits Program Act, 820 ILCS 63/1, et seq., which effective January 1, 2024, requires certain employers to provide employees with a commuter benefit allowing them to use pre-tax dollars to purchase a transit pass on public transit (Chicago Transit Authority or Regional Transportation Authority) via a payroll deduction. Covered employers are those located in one of the specified geographic areas that employ 50 or more covered employees in that area at an address that is located within one mile of a fixed-route transit service. Employees can be subject to a 120-day waiting period for eligibility. 

Workplace Postings (Amendment to Minimum Wage Law)

With the continued expansion of remote working arrangements, it was not surprising to see Illinois amend its minimum wage law to require employers to post required workplace notices electronically. Effective January 1, 2024, pursuant to 820 ILCS 105/9, if an employer has employees who do not regularly report to a workplace (e.g., remote workers or those who travel for work), the employer must either post all the required information under the Illinois Minimum Wage Law, Equal Pay Act, Wage Payment and Collection Act, and Child Labor Law, to the employer's website or intranet, or email a copy of the laws to those workers.

While we have certainly covered a lot in this article, we have not covered all the different components of each of the laws discussed above. Employers should consult with legal counsel to determine what, if any, obligations they may have under these laws.