With 2023 coming to a close, year-end planning is the primary focus for many organizations as they strive to prepare for a successful new year. If you’re an employer in Minnesota or Illinois, there are some big changes coming your way in 2024 that you need to be aware of so that your organization can remain compliant.
Both states have recently passed new labor laws on paid and sick leave that are effective January 1, 2024. In this article, we’re covering highlights of the new laws in each state so that your organization knows what to expect when they go into effect come January.
Minnesota’s new paid leave law is called the Earned Sick and Safe Time (ESST) law. The law is designed to ensure that employers provide some type of paid leave to their employees working within Minnesota state lines. Under the law, Minnesota employers are required to offer employees one hour of paid sick and safe time for every 30 hours worked. Employees are then allowed to accrue at least 48 hours of paid sick and safe time per year. Employees are defined as anyone who works for a Minnesota-based employer for 80 hours a year at minimum. Part-time and temporary employees are covered by the ESST law, but independent contractors are excluded.
The Minnesota Department of Labor and Industry has provided resources and updates to help employers plan for the new ESST law. Here are a few key details for employers in the state:
- Earned sick and safe time can be used for a variety of reasons, many of them centered on the overall wellbeing of the employee and their family members. Some examples include preventative care and treatment of physical and mental illnesses for both an employee and their family; absence due to instances of abuse, stalking or assault; and workplace closures due to a public emergency or weather incident.
- There are existing local paid sick and safe time regulations in the cities of Bloomington, Duluth, Minneapolis and St. Paul. These local ordinances may differ from the state’s new ESST law. The Minnesota Department of Labor and Industry advises employers to adhere to the paid leave policies that are most beneficial to their employees, whether they are from the local ordinance, state ordinance or combination of both.
- With the ESST law, additional reporting from employers will be required. Employers will need to provide employees with the following information on their earnings statements: the total number of sick and safe time hours available for use/accrued and the total number of hours already used. Employers will also be required to keep a record of the number of hours worked for each employee — and to hold onto these records for at least three years.
- Employers will be responsible for providing employees with a notice of the ESST law to ensure employees know their rights and how to use ESST when needed.
- An employer’s current paid time off (PTO) policy may already meet the new ESST requirements. If so, an employer doesn’t need to offer more leave time than what is required by the ESST law.
For additional information regarding Minnesota’s ESST law, including accrual rules, notice requirements, FAQs and more, visit the Minnesota Department of Labor and Industry’s website.
Illinois’ new paid leave law is called the Paid Leave for All Workers Act (PLAWA). The act applies to employees working for an Illinois-based employer, including part-time and temporary workers, and excludes independent contractors. Under PLAWA, employees accrue one hour of paid leave for every 40 hours worked. An employee’s paid leave hours begin accruing after the law goes into effect on January 1, 2024, or upon the start of employment, whichever is later.
The Illinois Department of Labor has shared some updates on what the new law entails so that employers can begin preparing. Here are a few important items to note:
- Employees are allowed to begin using their accrued leave time after 90 days. So, starting on March 31, 2024, (90 days after January 1, 2024) or 90 days following the first day of employment, employees can use their accrued time off for any reason without providing documentation to their employer.
- The city of Chicago and Cook County both have existing paid sick leave policies in place. Employees and employers in those designated areas will continue adhering to the existing policies instead of PLAWA.
- Employers have flexibility when determining how employees accrue their designated leave time. They can opt to front-load an employee’s leave time at the beginning of the year so that it’s available immediately for employees, or they can distribute it evenly over the course of the year.
- Under PLAWA, employers are required to track all paid time off used by employees.
- If an employer already has a paid leave policy that aligns with PLAWA requirements, it doesn’t need to update or change its existing policy or offer additional leave time.
For more information on what’s included in PLAWA, please visit the Illinois Department of Labor’s website.
Although PLAWA goes into effect on January 1, 2024, the Illinois Department of Labor is still finalizing law requirements. It plans to have all information regarding the law available to employers before March 31, 2024, when accrued time becomes available for use. It’s recommended that Illinois employers continue to monitor the department’s website for further guidance regarding PLAWA.
Adhering to new labor laws is a core part to running a successful and compliant organization. This task can be overwhelming for employers, as new laws are often complex and everchanging. If you’re a Minnesota or an Illinois employer seeking additional clarity on these new paid leave laws, Creative Planning Business Services is here for you. Contact us today to learn more about what our services can do to help your organization achieve its goals while staying current on new laws.