Inside the New Paid-Time Off Laws

Posted by Brad Hadfield on Apr 11, 2023 12:00:00 AM

It’s a move some feel may signal a nationwide change regarding employee time off. Illinois has become the third state, along with Maine and Nevada, to require employers to provide paid time off to employees for any reason. Governor J.B Pritzker signed the law last week, which goes into effect on January 1, 2024.

“Too many people can’t afford to miss even a day’s pay,” proclaimed the Prairie State Governor when signing the Bill. “Together we continue to build a state that truly serves as a beacon for families, businesses, and good paying jobs.”

Bill sponsor Jehan Gordon-Booth celebrated the new law. “Everyone deserves the ability to take time off,” she said at the signing. “Whether it’s to deal with the illness of a family member, or take a step back for your mental health, enshrining paid leave rights is a step forward for our state.”

What The Bill Means for Illinois and How it Could Impact Other States
The new law, dubbed the Illinois Paid Leave for All Workers Act (PLFAW), states that employers must give employees one hour of paid time off (PTO) for every 40 hours worked, capped at 40 hours total per year (unless the employer chooses to offer more).

It further states that employees are not required to provide an explanation for taking PTO, just that they must provide reasonable notice when possible.

The catalyst for changing employment laws seems to be the pandemic. “I think COVID really opened the door for this,” says Scott Zucker, Partner at Weissmann Zucker Euster + Katz, P.C. “Many workers didn’t want to come to work or couldn’t come to work due to health concerns. That’s when a lot of discussions began about employee rights.”

While the law is seen as a blessing for many workers who will gain the freedom to take time off when they need it, critics have some concerns. One aspect of the new law that they find troublesome is that there are no exceptions for small businesses. Due to necessity, small business owners have traditionally had more freedom to set their own time off policies. That won’t necessarily be true in 2024.

“There’s never been a required policy for private businesses,” says Zucker. “They have typically been able to construct their programs as they want – vacation, benefits, leave, everything but minimum wage. These new state laws are beginning to identify the rights of employees with respect to private employers.”
Zucker says that there is often an exception for small businesses with few employees, and that these laws aren’t triggered until a business has a certain number of workers. This won’t be the case in Illinois, however, with the Bill positing that there are no restrictions based on business size.

“This is why understanding the federal and state laws designed to support employee rights is very important,” continues Zucker. “There are many moving parts that, if employers are unfamiliar with the law, could lead them into trouble.”

Protecting Employees and Employers
The changing laws are shining a light on the importance of protecting both employees and employers. Zucker points to an example in which a self storage operator had an employee making a claim for medical leave. The claim stated that the employee should be paid and that their job had to be available to them when they were able to come back.

“Keeping a position available is great if it’s possible, but it can be very problematic for a small company,” he says. “Finding someone to fill in on a temporary basis isn’t always an option.”

He says that as long as employers are acting in good faith, they can avoid these types of claims – or at least defend themselves against them. “Look, if you can’t realistically keep that position open, or doing so would hurt the business, you have a fair and reasonable defense. But you need to be sure to document everything.”

To keep your business compliant, Zucker recommends small business owners work with a human resources company that is familiar with employee rights laws. He states that a payroll company or a benefits provider may also be able to offer guidance.

Examining the Benefits of PTO
Despite some concerns, many experts agree that offering PTO is beneficial not just for employees, but employers.

“[This law] creates a strong foundation for employers to build from while generating a healthier, more productive workforce,” stated Molly Weston Williamson, paid leave expert at the Center for American Progress.

Entrepreneur’s Dr. Kira Graves would undoubtedly agree. She recently cited scientific evidence that employees who take time off lead healthier, more productive lives. She writes that those who don’t take time off can actually “be detrimental to a company’s success” because they’re often more stressed, fatigued, and depressed.

Other studies show that workers without sick leave are 1.5 times more likely to go to work while sick, fueling the transmission of illnesses in the workplace and to the public. Research shows that implementation of PTO laws during the pandemic also helped reduce transmission of influenza-like illnesses.

The bottom line, of course, is to know and follow the rules. “These laws are going to be changing frequently,” Zucker concludes. “Employers need to stay up to date in order to stay out of trouble.”