Beginning January 1, 2024, most workers in Illinois will be eligible for up to 40 hours of paid leave with no questions asked. Thanks to new legislation passed by the state legislature in January 2023, Illinois becomes the third state in the union with mandatory paid leave laws. Whether or not it is a good thing is a matter of perspective.
Known as the Paid Leave for All Workers (PLFAW) Act, the law provides for mandatory paid leave that theoretically allows employees to take extra time off in addition to normal vacation time and paid holidays, to attend other business. But how many employees will use the mandatory paid leave as just another vacation?
No Explanation Required
Under the new law, employees can take advantage of mandatory paid leave for any reason. Not only that, but no explanation is required either. An employee can simply go through the proper channels to arrange for the time off and take it. In addition, brokerage general agency BenefitMall says that Illinois employers are not allowed to ask why employees want to use their paid leave.
This raises an interesting conundrum. Employers use paid time off (PTO) as a way to recruit, hire, and retain employees. PTO costs employers money. Is it possible that forcing them into a paid leave situation will remove the incentive to offer the typical one-week vacation now considered baseline? And if so, doesn’t mandatory paid leave undercut employers by taking away a vital recruiting tool?
Frontloading or Accrual
BenefitMall goes on to explain that Illinois employers can establish their mandatory paid leave programs based on frontloading or the accrual method. Under the frontloading model, employees are given access to all 40 hours of paid leave at the start of the 12-month benefits administration period established by the employer. New employees have access on day one.
Alternatively, employers can establish a plan by which employees earn one hour of paid leave for every 40 hours worked. There are advantages and disadvantages to both models. The main advantage to the accrual model is saving employers from starting each new plan year having to face the possibility of large numbers of employees immediately taking time off.
The advantage of the frontloading model is that employees cannot roll over unused paid time off into the following year, where they can with the accrual model. With both models, employees must give reasonable notice when taking paid time off is anticipated in advance. In an emergency situation where advanced notice is not possible, employees are still required to let their employers know of their intentions to take time off as soon as they can.
Other States Likely to Follow
Illinois is now the third state with a mandatory paid leave rule in place. Other states are likely to follow over the next 12 to 24 months. It is not beyond the realm of possibility to suggest that mandatory paid leave will be a nationwide standard a decade from now. Would that be a good thing?
We look at other countries and marvel over their paid leave laws. Likewise for their single payer healthcare systems. But the U.S. did not become the world’s economic powerhouse by following the rest of the world. Our economic power is rooted in economic freedom. Take that freedom away and you also take the power with it.
Ultimately, nothing is free. Mandatory paid leave will have to be paid for in some way. Whether that means a loss of benefits or much smaller, incremental salary increases doesn’t much matter. One way or another someone must pay for it.