Employers with employees working in Chicago are required by a new law to provide employees paid sick leave and a new, separate bank of leave that employees can use for any reason at all. The Paid Leave and Paid Sick and Safe Leave Ordinance significantly amends the City’s current Paid Sick Leave Ordinance and will take effect on December 31, 2023.

Read more here.

Get ready to ring in the new year with new and expanded employer leave obligations. Chicago’s new Paid Leave and Paid Sick and Safe Leave Ordinance will take effect on December 31, 2023 and the following laws go into effect on January 1, 2024.

Other new leave and accommodation laws are on the horizon in 2024 and beyond.

These laws are included in our leave law map database that provides subscribers with a detailed explanation of state and local leave laws around the country. The Leave and Accommodation Suite is developed and updated continually by our Disability, Leave & Health Management attorneys.  Jackson Lewis attorneys are available to assist employers in updating their leave policies and administering their leave programs to comply with the myriad of state laws.  Please contact your Jackson Lewis lawyer with any questions.

On November 3, 2023, the Illinois Department of Labor (“IDOL”) published proposed rules implementing the Illinois Paid Leave for All Workers Act (“PLAWA”).  While the proposed rules will not be finalized until after the PLAWA takes effect on January 1, 2024, they provide additional guidance employers should consider when reviewing their leave policies for compliance with the Act.

Covered Employees

The proposed rules provide that a covered employee is an individual who works part-time, full-time, or performs seasonal work and is:

  1. Permitted to work by an employer whose base of operations, regional office, or headquarters is in Illinois and that employee’s work is primarily performed in Illinois, or;
  • Permitted to work by an employer if either of the following is true:
  1. The work is primarily performed 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; or
  • The work is primarily performed in Illinois and the individual is domiciled in Illinois.

Under the proposed rules, the IDOL will consider the following factors when determining whether work is “primarily performed in Illinois:”

  1. The amount of work performed in Illinois compared to the amount of work performed outside Illinois;
  • Whether the work performed inside of Illinois is isolated, temporary, or transitory; and
  • Whether the work performed outside of Illinois is of the same nature or has the same duties of the work performed in Illinois.

Independent Contractor Test

The proposed rules provide that the same independent contractor test used under the Illinois Wage Payment and Collection Act (“IWPCA”) will apply to the PLAWA.  Under this test, the Act will not apply to bona fide independent contractors, who meet all of the following requirements:

  1. Is free from control and direction over the performance of his or her work; and
  • Performs work that is either outside the usual course of business or is performed outside all of the employer’s places of business, unless the employer is in the business of contracting with third parties for the placement of employees; and
  • Is in an independently established trade, occupation, profession, or business.

Frontloading Paid Leave

Under the Act, an employer may choose to frontload paid leave at the beginning of a 12-month period rather than provide paid leave via an accrual system. The proposed rules provide that if an employer chooses to frontload paid leave, the employer must give written notice to the employee stating how many paid leave hours are available to them on or before the first day of employment or on or before the first day of the 12-month period. If an employer chooses a fixed date for the beginning of the 12-month period, the employer may prorate the amount of frontloaded leave available to an employee who begins employment in the middle of that 12-month period.  An employer may also choose to use each employee’s employment start date as the start of the employee’s 12-month period.  Importantly, the proposed rules provide that an employer may not retroactively diminish benefits that the employer has already provided to the employee.  Therefore, an employer may not recoup or require an employee to repay paid leave that was frontloaded at the beginning of the 12-month period if the employee’s employment ends before the end of the 12-month period.

The proposed rules also provide that employers may frontload paid leave for part-time employees at a pro rata amount consistent with the employee’s anticipated work schedule for the 12-month period.  However, if the part-time employee works more hours than anticipated, the employee is entitled to accrue additional hours at a rate of 1 hour of paid leave for every 40 hours worked.  If a part-time employee works fewer hours in the 12-month period than anticipated, the employer may not diminish or recoup used or unused frontloaded paid leave.

Mixed-Earning Policies

Under the proposed rules, an employer may provide some of its employees paid leave in the form of frontloading and other employees paid leave via accrual.  However, an employer cannot illegally discriminate or otherwise violate state or federal law when determining which employees qualify for frontloading or accrual.

“Qualifying Pre-Existing Paid Leave Policy”

The proposed rules provide that an employer who has a “qualifying pre-existing paid leave policy” in effect on January 1, 2024 is not required to modify the pre-existing paid leave policy. “Qualifying pre-existing paid leave policy” is defined as “a bona fide paid leave policy that an employer has enacted prior to January 1, 2024, that, in practice, allows all employees to take at least 40 hours of paid leave for any reason of the employee’s choosing.” Neither the text of the Act nor the proposed rules state that an employers’ qualifying pre-existing paid leave policy must be modified to comply with all provisions of the Act or the proposed rules.

Denial of PLAWA Leave

While Section 15(h) of the Act permits employers to implement prior notification requirements for employees requesting paid leave based on whether the need for leave is foreseeable or unforeseeable, the proposed rules provide that an employer cannot deny an employee’s request to use paid leave solely because the employee’s request does not meet the employer’s foreseeability requirements.  They also state that an employer may restrict an employee’s use of paid leave to the employee’s regular workweek.

The proposed rules provide that the following factors are relevant when considering whether an employee’s request for paid leave may be denied based on operational needs:

  1.  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; and
  • Whether the employee has adequate opportunity to use all paid leave time they are entitled to over a 12-month period.

Carry Over of PLAWA Leave

Under the Act, if an employer provides paid leave via an accrual system, it must allow employees to carry over any unused leave annually from one 12-month period to the next 12-month period. Though the text of the Act is silent on whether employers are allowed to place a cap on the amount of leave that carries over annually, the proposed rules state that employers “may establish a reasonable policy . . . restricting employees’ ability to carry over more than 80 hours of unused paid leave.”

Payment of Paid Leave Upon Separation from Employment

Per the proposed rules, employees’ existing time off allowance banks must be kept separate from the accounting of employees’ paid leave under PLAWA, unless the employer’s written policy or practice is to combine the leave. If an employer chooses to credit PLAWA leave to an existing paid leave allowance, such policy must be communicated to the employer’s employees within 30 days after the start of an employee’s employment or of the effective date of the policy. Under PLAWA, if an employer chooses to credit PLAWA leave to an existing paid leave allowance, any unused PLAWA leave must be paid to the employee upon their separation from employment just as vacation time is paid out under the IWPCA.  However, an employer is not required to pay out unused PLAWA leave upon the employee’s separation from employment if the employer does not provide an additional form of paid leave allowance and does not choose to combine or credit the multiple forms of leave together.

Reinstatement of Leave Upon Rehire

The PLAWA requires that unused earned or accrued paid leave must be reinstated to the employee if he or she is rehired within 12 months of their separation or termination. The proposed rules clarify that employees are entitled to reinstatement of any unused frontloaded paid time off unless it was paid out upon separation.

Notice and Accounting

The proposed rules state that employers shall provide an accounting of the employee’s unused balance of paid leave on each paystub or form that the employer normally furnishes to the employee to notify them of wage payments and deductions from wages.  They also require employers to post a notice in a conspicuous location, including a statement provided by the IDOL summarizing the requirements of the Act and a statement written by the employer summarizing the employer’s policy.  Under the proposed rules, an employer must also provide to the employee and maintain a record of each request that is denied and the reason for the denial.

Local Paid Leave Ordinances

The PLAWA does not apply to any employer located in a municipality or county where the employer is required by local law or ordinance to provide paid leave, including paid sick leave, to its employees. The proposed rules state that the PLAWA applies to employers located in a municipality or county where the employer is not required by local law or ordinance to provide paid leave, including paid sick leave. This includes employers located in municipalities or counties that have opted out of an overlapping jurisdiction’s paid leave law. Under the proposed rules, if a municipality or county enacts a local law or ordinance after January 1, 2024 that provides paid leave, the employer must comply with the local law or ordinance if it requires greater paid leave benefits than the PLAWA, but must comply with the PLAWA if the local law or ordinance requires less paid leave benefits than the PLAWA.  The City of Chicago recently passed an amendment to its paid sick leave ordinance that will take effect on December 31, 2023, and will require employers to provide at least 40 hours of paid sick leave and 40 hours of paid leave for any reason per year.

***

The IDOL has announced that it will hold a public hearing on its proposed rules to implement the PLAWA on November 29, 2023, and it will accept written comments through December 18, 2023.  Given the Act’s January 1, 2024 effective date, Illinois employers should plan for compliance with the requirements of the Act with the understanding that the rules will not be finalized until early 2024. For more information about the Act, the IDOL’s proposed rules, or other paid leave laws that may impact your organization, please contact a Jackson Lewis attorney.

The City Council for the City of Bloomington, Minnesota, has adopted amendments to its Sick and Safe Time Ordinance (previously called the Sick and Safe Leave Time Ordinance). The amendments, Ordinance No. 2023-24 § 23.05, will go in effect on January 1, 2024.

Although Minnesota’s Earned Sick and Safe Time mandate does not preempt related ordinances enacted in four Minnesota cities, the changes to Bloomington’s Ordinance clearly align with language implemented by Minnesota’s Earned Sick and Safe Time (ESST) legislation.

In 2022, Bloomington became one of four cities in Minnesota to approve an ordinance requiring certain employers to provide sick and safe leave to qualifying employees. In May 2023, the Minnesota legislature passed the statewide paid sick and safe time law. Under the state law, starting January 1, 2024, all Minnesota employers must provide employees with up to 48 hours of ESST per year.

Reasons for Leave

Bloomington expanded its definition of a “family member” under its Ordinance to match Minnesota’s. Under the Ordinance, a family member includes “any … individual related by blood or whose close association with the employee is the equivalent of a family relationship; and up to one individual annually designated by the employee.”

The amendments also revamp the enumerated reasons an employee may use leave to match the list in the Minnesota statute. Bloomington’s permitted reasons for leave  no longer includes the death of a family member. The Ordinance newly permits remote and in-person workers to take leave when determined by a healthcare professional or authority that an employee or their family member is at risk of infecting others with a communicable disease.

Frontloading Hours Permitted

In line with the Minnesota law, the amended Ordinance permits employers to provide employees a lump sum of leave hours at the start of their employment instead of using the accrual method. However, employers who frontload leave hours must make them available for immediate use. Previously, the Bloomington Ordinance required employees to wait 90 days after starting employment to take leave.

The Ordinance outlines two methods for frontloading leave hours. An employer can (1) provide 48 hours of leave at the beginning of the subsequent year if it pays employees accrued but unused sick and safe time at the end of a year at the same hourly rate the employee earns from employment, or (2) provide 80 hours of ESST at the beginning of the subsequent year if it does not pay employees for accrued but unused sick and safe time at the end of a year.

Documentation

Following Minnesota’s ESST legislation, Bloomington’s amended Ordinance allows employers to require reasonable documentation to substantiate the reason for leave when the employee uses earned sick and safe time for more than three consecutive days.

Mirroring the Minnesota ESST law, Bloomington broadly defines what constitutes reasonable documentation. Reasonable documentation does not need to be formal or comprehensive. Reasonable documentation includes a written statement from the employee, which does not need to include details relating to a medical condition, domestic abuse, sexual assault, or stalking. Further, an employee’s written statement can be written in the employee’s first language.

Covered employers should review their policies to ensure compliance with the amendments to Bloomington’s Ordinance. If you have questions about the mandatory employee leave laws in Minnesota or around the country, please reach out to the Jackson Lewis attorney with whom you often work, or any member of our Disability, Leave and Health Management team.

The Washington Employment Security Department has announced the Paid Family and Medical Leave 2024 premium rates and weekly benefit maximums.

Beginning on January 1, 2024, the Washington Paid Family and Medical Leave Program’s total premium rate will decrease from 0.8% to 0.74%. This rate is recalculated annually in October, based on contributions from premiums and benefits paid during the previous year.

Employers must report each Washington employee’s total gross wages, not including tips. Premiums must be collected up to the Social Security cap, which will increase to $168,600 in 2024, to the Washington Employment Security Department. Once an employee meets the Social Security cap, employers must stop collecting premiums, but they must continue to report employee wages.

Employers with 50 or more people employed will pay at least 28.57% of the total premium, which would require their employees to pay 71.43% of the total premium. Employers with fewer than 50 employees are not required to pay the employer portion of the total premium but must collect the employee portion of the premium or pay it on their behalf. Employers with approved “voluntary plans” under this law should consult with employment counsel about possible modifications to the “voluntary plans.”

Additionally, the maximum weekly benefit will be capped at $1,456.00 per week in 2024.

Employers should notify employees that they will begin collecting the new rate on January 1, 2024. An updated employer toolkit, mandatory poster and paycheck insert are available in the Paid Leave Help Center.

For more information about Washington’s Paid Family and Medical Leave program, or other paid leave laws and programs that may affect your organization, please contact a Jackson Lewis attorney.

On September 15, 2023, the New York City Department of Consumer and Worker Protection (DCWP) issued a final rule (Final Rule) on the city’s Earned Safe and Sick Time Act (ESSTA).

The Final Rule provides some clarification on various compliance issues such as coverage, required notice of usage, supporting documentation that can be requested, the rate of pay for usage, written policy requirements, pay statement requirements and penalties.

Read more here.

            In the enacted state budget, the Massachusetts legislature has amended the Massachusetts Paid Family and Medical Leave Act (PFMLA) to provide employers and employees more flexibility to use other accrued benefits to supplement paid benefits employees receive from the state. The new law is effective November 1, 2023.

            Currently, the state-provided maximum weekly benefit for individuals on PFMLA leave is $1,149.90. Individuals wishing to supplement this state-paid PFMLA benefit may use funds from (1) a temporary disability policy or program of an employer or (2) a paid family or medical leave policy of an employer (such as a paid parental leave policy). The Department of Family and Medical Leave does not allow employers to “top off” or supplement PFMLA benefits with payments from sick leave policies, vacation policies, or general paid time off (PTO) policies. An employee could not receive more than 100 percent of their average weekly wage. If an employee received payments from any of those policies, the state would not pay any PFMLA benefits during the leave.

            With the amendment, employers and employees may supplement the PFMLA benefit payments with “any accrued sick or vacation pay or other paid leave provided under an employer policy” up to 100% of the employee’s average weekly wage. Accordingly, employers can supplement the PFMLA benefit with accrued sick, vacation, or other paid leave for all applications received after November 1, 2023 (even if the leave began prior to November 1, 2023).

            Significantly, other parts of the law were not changed. An employer cannot require an employee to use accrued sick, vacation, or other paid leave benefits to top off the PFMLA benefit; the employee must be allowed to choose to use the benefit.

            Relatedly, the Department of Family and Medical Leave has announced that it is the employer’s responsibility to monitor the amount of money paid to the employee with the supplementation to ensure the employee is not paid more than 100 percent of the average weekly wage. In addition, the Department has stated that it will not reimburse any overages, as that is the employer’s responsibility.

            The amendment provides employees the ability to use accrued benefits to receive more than the maximum weekly benefit during a PFMLA leave. This may encourage employees to use more of the available PFMLA time.

            Employers should review their sick leave, vacation leave, and PTO policies to ensure compliance with the PFMLA and to make clear when and how an employee can seek to “top off” benefits.

On October 4, 2023, California’s Governor signed Senate Bill (SB) 616, which increases the amount of paid sick leave employers are required to provide to California employees.

Beginning on January 1, 2024, employers must increase the amount of sick leave provided to California employees from three days/24 hours to five days/40 hours.

Read more here.

The Massachusetts Department of Family and Medical Leave has announced changes to the employer contribution rates and benefit amounts under the Paid Family and Medical Leave Act (PFMLA) effective January 1, 2024.

Each October 1st, the Department of Family and Medical Leave is required to update employer contribution rates and benefit amounts for the upcoming year. The change in benefit amounts is based on the average weekly wage in the Commonwealth and the change in contribution rates is to be made to ensure the Fund’s solvency for paying out benefits.

Following are the announced changes to the PFMLA:

1. The benefit contribution rate for employers has been increased to .88% of eligible wages. Currently, the benefit contribution rate is .63% of eligible wages (which are wages up to the social security contribution limit).

The specific benefit contribution rates are as follows:

  1. For employers with 25 or more covered individuals, for the family leave contribution, the employer can withhold .18% of eligible wages. As for the medical leave contribution, the employer can withhold .28% of eligible wages and is responsible for paying .42% of eligible wages directly.
  2. For employers with 24 or fewer covered individuals, for the family leave contribution, the employer can withhold .18% of eligible wages. As for the medical leave contribution, the employer can withhold .28% of eligible wages. For these smaller employers, the employer has no obligation to pay the employer share for medical leave.

These new contribution rates apply equally to employers that have private plans, so all employers must review and update their plans and contribution rates for January 1, 2024.

2. The maximum weekly benefit amount will be $1,144.90 per week.

The Department increased the maximum weekly benefit amount available to individuals to $1,144.90. This benefit is keyed off the Commonwealth’s average weekly wage and is an increase from the current amount, which is $1,129.82 a week.

For additional guidance, please contact a Jackson Lewis attorney.