This law goes into effect 1/1/24 so clients have time to think about how they want to implement this.
 
What is required:  All employees in Illinois must accrue at least 1 hour of PAID SICK LEAVE for every 40 hours worked.  After 90 days of employment, employees must be permitted to take their accrued paid sick leave for their own or their family’s illness. 
 
What is not permitted: Requiring employees to find a replacement to be able to take the time off (you can request an employee help find their replacement, but not require it).  Requiring proof of the illness or need for time off (you can request the reason, but not require the employee to answer or provide proof).  Requiring employees to take time off in full day increments.
 
Employers can require “reasonable” notice.  For planned time off, like appointments or procedures, this is no more than 7 days’ notice.  For unplanned time off, the required notice can’t be sooner than the employee is aware of the need.
 
Employers can require time off be paid in 2 hour increments if the schedule time is at least 2 hours.  If the scheduled work time is less than the employer can pay out only what was scheduled.
 
Employers can either accrue time or frontload time.  If time is accrued, then employees must be permitted to rollover their unused time from year to year.  However currently the requirement for pay out and accrual caps at 40 annually.  So employees may be stuck rolling over unused hours indefinitely.  Clarification may come on this before the launch.
 
If an employee leaves employment, their sick leave accrued does not need to be paid out to them (If an employer uses their vacation pay to meet the requirements of this law, then they must still pay it out as vacation pay must be paid to employees at employment termination).  If an employee returns to the company within a 12 month period, their accrued sick leave picks up where it left off.  The 90 day clock does not restart so a returning employee can take their time off immediately (or picks up where they left off if they worked less than 90 days). 
 
Paid Leave for All Workers Act (illinois.gov)
​

WASHINGTON – The U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.
 
The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.
 
Key Takeaways
 

• Paid Sick Leave for Workers 
  • For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable.
• Complete Coverage
  • Health insurance costs are also included in the credit.
  • Employers face no payroll tax liability.
  • Self-employed individuals receive an equivalent credit.
• Employers receive 100% reimbursement for paid leave pursuant to the Act.
• Fast Funds
  • An immediate dollar-for-dollar tax offset against payroll taxes will be provided
  • Where a refund is owed, the IRS will send the refund as quickly as possible.
  • Reimbursement will be quick and easy to obtain.
• Small Business Protection
  • ​​Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.

 

• Easing Compliance
  • Requirements subject to 30-day non-enforcement period for good faith compliance efforts.

 
To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.
 
Background
 
The Act provided paid sick leave and expanded family and medical leave for COVID-19 related reasons and created the refundable paid sick leave credit and the paid child care leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and Dec. 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.
 
Paid Leave
 
The Act provides that employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis. An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s pay. An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional 10 weeks of expanded paid family and medical leave at 2/3 the employee’s pay.
 
Paid Sick Leave Credit
 
For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.
 
For an employee who is caring for someone with Coronavirus, or is caring for a child because the child’s school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.
 
Child Care Leave Credit
 
In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the Coronavirus, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee’s regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.
 
Prompt Payment for the Cost of Providing Leave
 
When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees' share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.
 
Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.
 
The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.
 
If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.
 
Examples
 
If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
 
If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.
 
Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.
 
Small Business Exemption
 
Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.
 
Non-Enforcement Period
 
Labor will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act. Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.
 
For More Information
 
For more information about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov. Information regarding the process to receive an advance payment of the credit will be posted next week.        

Typical Situation: Our client is growing and are unsure if they are legally complaint with employees. They feel they have been "winging it" in the area of HR, for too long and want to formalize processes. Or simply, they have many questions about employee issues and need answers we cannot provide (Legally and we just don’t know)
 
When you hear a business owner say:
 

• “I need to fire this person, but I don’t want to get sued”
• “There are so many laws changing, and I don’t know if our policies and practices are compliant.”
• “We’re having a hard time finding and retaining qualified candidates.”
• “We don’t need a full-time HR professional, but we need occasional help with employee relations issues.”

 
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Matching Ideas with Resources:

On July 1st 2017 all business in Cook County (except those in cities listed below) must increase their minimum wage to $10.00 an hour.  The minimum wage will go up $1.00 an hour each consecutive year (on July 1st) to reach $13.00 an hour by 2020.  Thereafter it will be increased with inflation but not to exceed 2.5% per year.  Businesses in the city of Chicago must increase their minimum wage to $11.00 an hour on July 1st (currently their minimum is $10.50/hr) and will also go up $1.00 an hour each consecutive year, reaching $13.00 an hour by 2019.  Thereafter the minimum increases with inflation and is capped at 2.5%.
 
Also Cook County businesses (including Chicago but excluding those cities listed below) must begin offering paid time off (sick time) to all employees working more than 80 hours in any 120 day period, accrued at the rate of 1 hour for every 40 hours worked.  Employees begin accruing sick time starting with their first day of employment, or July 1st 2017.  Companies can stipulate a waiting period of up to 180 days for new employees to begin using their earned time off.  ½ of any unused sick time must be carried over from one year to the next (up to 20 hours).  Employers can’t set unreasonably burdensome notification or use policies.  Sick time can be used for one’s self or family member (including extended family members) for any illness or issues related to being the victim of domestic violence or sexual offense.  Accrued but unused sick time does NOT need to be paid out upon separation of employment.  Existing PTO policies must meet all of the new requirements or be modified to match where deficient.  Notice of the sick time policies must be given in employees paychecks 2 weeks prior to taking effect on July 1st, at the time of employment for new employees, and must be posted in a conspicuous place at each facility.
 
Cities that have opted out of the Cook County minimum wage increases and sick time requirements so far:
Municipalities That Have Opted Out (as of 6/2/17)

• Alsip
• Arlington Heights
• Barrington
• Bartlett
• Bedford Park
• Bellwood
• Bridgeview
• Buffalo Grove
• Burbank
• Burr Ridge
• East Hazel Crest
• Elk Grove Village
• Elgin
• Elmwood Park
• Evergreen Park
• Harwood Heights
• Hickory Hills
• Hoffman Estates
• Justice
• Lynwood
• Melrose Park
• Morton Grove
• Mount Prospect
• Niles
• Norridge
• Oak Forest
• Oak Lawn
• Palatine
• Palos Heights
• Palos Park
• River Forest
• River Grove
• Rolling Meadows
• Rosemont
• Schaumburg
• South Barrington
• Streamwood
• Tinley Park
• Western Springs
• Wheeling

Municipalities Still Considering Opting Out (as of 6/2/17)​

• Berkeley
• Berwyn
• Cicero
• Des Plaines
• Forest Park
• Hillside
• North Riverside
• Northbrook
• Orland Park
• Palos Hills
• Park Ridge
• Prospect Heights
• Westchester
• Worth

Note that unincorporated townships that don’t have home rule can’t opt out.  So be aware of where the client is, not just the mailing address.
 
As we get nearer to 7/1/17 I expect this list of opt outs to increase and I will do my best to keep us up to date on those that have officially opted out. 

​Feel free to stop by and see me if you want more details or have questions.​

Ruth Kronvold
​[email protected]
GLM, Inc.
200 W Higgins Rd Ste 326
Schaumburg, IL  60195
P 847-884-1781 x33
www.glmfinancial.com
​