Illinois Paid Leave for All Workers Act 2024: Complete Guide

On January 1, 2024, Illinois became one of only a handful of states to require paid leave for nearly all private-sector workers — not just sick leave, but paid leave that can be used for any reason whatsoever. The Paid Leave for All Workers Act (PLAWA) is one of the most significant expansions of employee leave rights in Illinois history, and two years in, many employers and employees still don't fully understand what it requires.

This guide covers what the law requires, how it interacts with existing PTO policies, what Illinois law says about PTO payout at termination, and what employers need to do to stay compliant in 2026.

The Paid Leave for All Workers Act (PLAWA) — What It Requires

Effective January 1, 2024, most Illinois employers must provide their employees with up to 40 hours of paid leave per year. This is a landmark law for several reasons:

It covers any reason. Unlike sick leave laws in other states, PLAWA paid leave isn't restricted to illness, family care, or specific qualifying events. Employees can use it for any purpose — a dentist appointment, a child's school play, a personal errand, or simply a day off. Employers cannot require employees to disclose why they're taking leave.

It's broad — but not universal. PLAWA covers employees of every size of employer, including part-time and seasonal workers and domestic workers, who are expressly included (820 ILCS 192/10). Excluded are railroad workers under the Railroad Unemployment Insurance Act or Railway Labor Act, students working part-time for their own college, short-term employees of higher-education institutions, and employees of school districts and park districts; construction and national parcel-delivery workers under a collective bargaining agreement are outside it, and other CBAs may waive it expressly. Most importantly, PLAWA does not apply to employers covered by a municipal or county paid leave ordinance that was in effect on January 1, 2024 — which means Chicago and Cook County (§ 15(p)). See the Chicago section below.

The accrual rate is 1 hour for every 40 hours worked. An employee working 40 hours a week accrues 1 hour a week and reaches 40 hours after 40 weeks; overtime-exempt employees are treated as working 40 hours a week unless their normal week is shorter. Part-time employees accrue proportionally. Instead of accrual, an employer may front-load the full 40 hours on the first day of employment or of the 12-month period (§ 15(b)–(c)).

When Can Employees Start Using It?

Employees begin accruing PLAWA leave from their first day of employment and are entitled to begin using it 90 days after they start (§ 15(g)); an employer may allow earlier use. Employees decide how much leave to take, though an employer may set a minimum increment of up to 2 hours a day. For foreseeable leave an employer may require up to 7 calendar days' notice; for unforeseeable leave, notice as soon as practicable — but only if the employer has given a written notice policy (§ 15(h)). Employers must continue group health coverage during the leave (§ 15(m)), and unused leave must be reinstated if the employee is rehired within 12 months (§ 15(k)).

Rollover and Year-End Rules

PLAWA leave that is accrued must carry over from year to year (§ 15(i)). But an employer that front-loads the 40 hours on the first day of employment or of the 12-month period "is not required to carry over paid leave" and "may require employees to use all paid leave prior to the end of the benefit period or forfeit the unused paid leave" (§ 15(c)). So use-it-or-lose-it is lawful for PLAWA leave only with front-loading.

For accrued leave, nothing in the Act requires an employer to provide more than 40 hours of paid leave in a 12-month period (§ 15(i)), so an employer may cap use at 40 hours a year even when carried-over hours push the balance higher.

PLAWA vs. Existing PTO Policies: How They Interact

Many Illinois employers already offer PTO that meets or exceeds PLAWA's 40-hour requirement. Under § 20(b), an employer whose paid leave policy provides at least the minimum amount of leave "is not required to modify the policy if the policy offers an employee the option, at the employee's discretion, to take paid leave for any reason."

For existing PTO to satisfy PLAWA, it must:

• Provide at least the PLAWA minimum — 40 hours a year, or the pro rata accrual
• Let the employee take it for any reason, without a reason or documentation
• Follow PLAWA's other rules for that leave: use from day 90 at the latest, carryover of accrued hours (or front-loading), notice limits, and no replacement-worker requirement

If an employer's existing PTO policy meets these requirements, the employer is compliant. If it is restricted — say, it's sick-leave-only or requires documentation — the employer must modify it or add a separate PLAWA leave bank. Note the payout consequence of combining: under § 15(l), if PLAWA leave is credited to an employee's PTO bank or vacation account, unused leave must be paid out at separation "to the same extent as vacation time under existing Illinois law."

Illinois Vacation Payout: Separate and Stronger Rules

PLAWA doesn't require vacation payout at termination. But Illinois has a separate, older rule that does — and it applies to vacation (as opposed to PLAWA leave).

Under the Illinois Wage Payment and Collection Act (820 ILCS 115/5), accrued vacation is treated as earned wages. When an employee resigns or is fired without having used all the vacation they've earned, the employer must pay the monetary equivalent of that vacation as part of final compensation — no matter what the handbook says. An employer cannot use a written policy or an informal practice to make earned vacation disappear at separation.

Can an Illinois Employer Have a Use-It-or-Lose-It Vacation Policy?

Yes — but only within tight limits, and this is where Illinois is frequently misdescribed. The Department of Labor's regulation at 56 Ill. Adm. Code 300.520 allows an employment contract or policy to require an employee to take vacation by a certain date or lose it, provided the employee is given a reasonable opportunity to take the vacation. The employer also has to be able to show the employee had notice of the use-by rule. If the policy is buried in a handbook nobody received, or the workload made it impossible to actually schedule the time, IDOL treats the unused days as earned and still owed.

What Illinois flatly prohibits is different from a use-by date. First, "no employment contract or employment policy shall provide for forfeiture of earned vacation time upon separation" — that balance is final compensation, paid at the final rate of pay by the next regular payday (§ 115/5). Second, an employer cannot change a vacation policy retroactively so that time already earned under the old policy is wiped out; a new forfeiture rule can only apply going forward. Third, vacation is earned pro rata as the employee works, so an employee who leaves partway through the year is owed a proportional share even if the policy grants vacation in an annual lump. A claim to the Illinois Department of Labor must be filed within one year after the final compensation was due (§ 115/11); a civil action is also available instead.

Practically, that means a compliant Illinois vacation policy can say "use your days by December 31 or they expire" — as long as employees are told that in advance and can realistically take the time — but it cannot say "unused days are forfeited when you leave the company."

This creates a compliance nuance for Illinois employers with combined PTO banks: under § 15(l), PLAWA leave credited to a PTO bank or vacation account must be paid out at separation to the same extent as vacation, so a single combined bank is paid out in full. Employers who want to avoid payout on the PLAWA portion keep separate banks — one for PLAWA-qualifying leave (no payout required) and one for vacation (payout required).

Chicago and Cook County: Local Ordinances Instead of PLAWA

PLAWA "shall not apply to any employer that is covered by a municipal or county ordinance that is in effect on the effective date of this Act that requires employers to give any form of paid leave," and any local ordinance enacted or amended afterwards must give benefits at least equal to PLAWA's (820 ILCS 192/15(p)). Two local laws matter:

• Chicago — Paid Leave and Paid Sick and Safe Leave Ordinance (effective July 1, 2024). Employees who work at least 80 hours in any 120-day period accrue two banks: 1 hour of paid leave and 1 hour of paid sick leave for every 35 hours worked, each capped at 40 hours a year. Paid leave is usable for any reason from day 90; paid sick leave from day 30. Employers with 51 or more covered employees must pay out accrued, unused paid leave at separation — up to 56 hours — including after a discharge for misconduct; employers with 50 or fewer need not, and paid sick leave is never paid out.
• Cook County — Paid Leave Ordinance. Suburban Cook County has its own paid leave ordinance; whether it covers a particular employer depends on where the work is performed, so check the county's current jurisdiction list.

The Illinois Wage Payment and Collection Act still applies in both places: vacation or PTO an employer provides on top of the ordinance is owed at separation as final compensation.

For Employers: PLAWA Compliance Checklist

Two years in, Illinois employers should have PLAWA compliance fully dialed in. Here's a quick checklist:

• ☐ Written PTO policy updated to reflect PLAWA requirements as of January 1, 2024
• ☐ Employee handbook updated and distributed
• ☐ Payroll system configured to track PLAWA accrual separately or confirm existing PTO meets requirements
• ☐ Required PLAWA workplace notice posted (Illinois DOL poster)
• ☐ 90-day waiting period applied consistently if used
• ☐ No year-end forfeiture of accrued PLAWA leave (forfeiture is allowed only if you front-load the 40 hours)
• ☐ Carryover of accrued leave implemented in payroll; leave reinstated for anyone rehired within 12 months; records kept 3 years
• ☐ If you operate in Chicago or covered Cook County, follow the local ordinance instead — and in Chicago, budget for paid-leave payout at 51+ employees
• ☐ Vacation payout policy clearly addressed in handbook (separate from PLAWA)
• ☐ If vacation has a use-by date, employees have written notice and a genuine opportunity to schedule the time — and the rule is never applied to time already earned

HR software with Illinois-specific configurations can automate much of this — including separate PLAWA accrual tracking, rollover enforcement, and termination payout calculations. If you're managing Illinois employees manually, the risk of non-compliance grows with every payroll cycle.

Final Paycheck Timing in Illinois

The Illinois Wage Payment and Collection Act sets the deadline, and this guide had not stated it. 820 ILCS 115/5 requires every employer to pay the final compensation of separated employees "in full, at the time of separation, if possible, but in no case later than the next regularly scheduled payday." The "if possible" is not decorative — the payday is a backstop, not a default entitlement to wait.

What matters most for readers of this page is how the Act defines the amount. "Final compensation" expressly includes "wages, salaries, earned commissions, earned bonuses, and the monetary equivalent of earned vacation and earned holidays, and any other compensation owed the employee by the employer pursuant to an employment contract or agreement." So the vacation payout described earlier in this guide is not a separate, softer obligation — it is part of the final compensation governed by the same deadline.

Late payment is expensive. Under 820 ILCS 115/14, an employee not timely paid may recover the underpayment plus damages of 5% of the underpayment for each month it remains unpaid, through either a Department of Labor claim or a civil action but not both, and in a civil action also costs and all reasonable attorney's fees. An employer ordered to pay also owes the Department a non-waivable administrative fee of $500 to $1,250, and one that is able to pay but willfully refuses, or falsely denies the amount owed with intent to defraud or delay, commits a Class B misdemeanor (up to $5,000) or Class A misdemeanor (over $5,000), with a Class 4 felony for a repeat conviction within 2 years (§ 115/14(a-5), (b)).

Frequently Asked Questions

How quickly must an Illinois employer issue my final paycheck?

At the time of separation if possible, and in no event later than your next regularly scheduled payday, under 820 ILCS 115/5. The Act defines "final compensation" to include the monetary equivalent of earned vacation, so a promised vacation payout falls under the same deadline as your wages. If payment is late, 820 ILCS 115/14 allows you to recover the underpayment plus damages of 5% of it for every month it remains unpaid, plus costs and reasonable attorney's fees in a civil action. You may pursue this through an Illinois Department of Labor claim or in court, but not both.

Does PLAWA apply to my small Illinois employer?

Yes — PLAWA has no employer-size threshold, so it covers businesses with just one employee, including households employing domestic workers. The exceptions are specific: employers covered by a Chicago or Cook County paid leave ordinance (which apply instead), school and park districts, railroad employees, part-time student employees of their own college, short-term higher-education employees, and employees under certain collective bargaining agreements.

Can my Illinois employer ask why I'm using PLAWA leave?

No. Under 820 ILCS 192/15(e), an employee "is not required to provide an employer a reason for the leave and may not be required to provide documentation or certification," and under § 15(h)(4) the employer may not require the employee to find a replacement worker.

Does PLAWA replace Illinois sick leave?

PLAWA is a different and broader law than sick leave. Illinois's existing Employee Sick Leave Act (820 ILCS 191) requires employers who offer sick leave to allow it to be used for family member care — that law still exists. PLAWA is a new, additional requirement: 40 hours of any-reason paid leave. The two laws coexist.

My Illinois employer offers 15 days of PTO. Do they still need to comply with PLAWA?

Probably not, if the PTO can be used for any reason. Under § 20(b), a policy that provides at least PLAWA's minimum and lets employees take leave for any reason at their discretion does not need to change. If the PTO is sick-leave-only or requires documentation, the employer must modify it or add a separate PLAWA bank. Remember the payout effect: PTO that includes PLAWA leave is paid out at separation like vacation (§ 15(l)).

Does Illinois require payout of PLAWA leave at termination?

Generally no — § 15(j) says nothing in Illinois law requires payment for unused PLAWA leave at separation. Two exceptions: if PLAWA leave is credited to a PTO bank or vacation account, it is paid out like vacation (§ 15(l)); and in Chicago, employers with 51 or more covered employees must pay out up to 56 hours of accrued, unused paid leave under the city ordinance. Separate vacation is always owed at separation under the Wage Payment and Collection Act.

What are the penalties for PLAWA violations?

An employee may file a complaint with the Illinois Department of Labor within 3 years of the violation. An employer that violates the Act is liable to the employee for the actual underpayment, compensatory damages, a penalty of $500 to $1,000, equitable relief, and reasonable attorney's and expert fees (820 ILCS 192/30(b)). The Department can also impose a civil penalty of $2,500 for each separate offense, payable to the state (§ 35), and $500/$1,000 for failing to post the required notice (§ 20(d)). Retaliation — including counting PLAWA leave under a no-fault attendance policy — is prohibited (§ 25).

Can my Illinois employer have a use-it-or-lose-it vacation policy?

Yes, with conditions. Under 56 Ill. Adm. Code 300.520, an Illinois employer may require you to take vacation by a set date or lose it, but only if you had notice of the rule and a reasonable opportunity to actually take the time. What the employer cannot do is forfeit vacation you have already earned when your employment ends — that balance is treated as final compensation under the Wage Payment and Collection Act and must be paid out — or apply a new forfeiture rule retroactively to time earned under the old policy.