Illinois Paid Leave Laws 2026: PLAWA Accrual, Chicago Dual Banks & Frontloading
Published by the StateWageCalc Editorial Team • Current as of October 2026
1. Statewide Mandate: Paid Leave for All Workers Act (PLAWA)
Effective January 1, 2024, Illinois enacted the Paid Leave for All Workers Act (PLAWA), 820 ILCS 192/1 et seq. Unlike traditional sick leave laws that restrict leave to illness or medical care, PLAWA creates an unconditional right to paid time off:
- Accrual Ratio: 1 hour of paid leave for every 40 hours worked (820 ILCS 192/15(a)).
- Statutory Annual Cap: At least 40 hours of paid leave per 12-month period.
- Any-Reason Usage: Employees may use PLAWA leave for any reason of their choosing. Employers are statutorily prohibited from requiring an explanation, justification, or documentation.
- Waiting Period: Employees may begin taking leave 90 calendar days after starting employment (or 90 days after January 1, 2024).
2. Chicago’s Dual-Bank Paid Leave Ordinance (MCC § 6-130)
On July 1, 2024, the City of Chicago implemented the nation's most expansive municipal paid leave ordinance under Municipal Code Chapter 6-130. Rather than a single pool of leave, Chicago requires employers to maintain two separate leave accounts:
Bank 1: General Paid Leave
Accrues at 1 hour per 35 hours worked, up to 40 hours per year. Usable for any reason without documentation. Employers with 51+ employees must cash out unused hours upon separation.
Bank 2: Paid Sick and Safe Leave
Accrues at 1 hour per 35 hours worked, up to 40 hours per year. Usable for medical care, illness, family care, or domestic violence safe leave. Never required to be cashed out upon separation.
3. Frontloading vs. Pro-Rata Accrual
Under both statewide PLAWA and Chicago ordinances, employers have the option to frontload paid leave on the first day of the 12-month benefit period:
| Method | Statewide PLAWA | City of Chicago |
|---|---|---|
| Frontloading Amount | 40 hours at year start | 40 hrs Paid Leave + 40 hrs Sick Leave |
| Carryover Requirement | No carryover required | Up to 16 hrs Paid Leave carryover if unused |
| Separation Payout | Exempt under § 192/15(b) | Mandatory for Bank 1 (51+ employees; small ≤50 exempt) |
4. Separation Payout Rules: Vacation, PLAWA & Chicago MCC § 6-130-020
A crucial distinction under Illinois law involves separation payouts. Under 820 ILCS 192/15(b), standalone PLAWA leave is not considered wages under the Wage Payment and Collection Act, and employers are not required to pay out unused PLAWA hours upon employee termination.
However, if an employer satisfies PLAWA obligations using an existing vacation or combined general PTO policy that is governed by 820 ILCS 115/5, all accrued unused hours must be cashed out at the employee's final regular rate of pay upon separation.
Chicago Paid Leave Separation Cashout Rules (MCC § 6-130-020(a)(4))
Under the Chicago Paid Leave and Paid Sick Leave Ordinance, mandatory cashout upon separation applies only to General Paid Leave (Bank 1). Paid Sick and Safe Leave (Bank 2) is never required to be cashed out. The payout obligations depend strictly on employer headcount tiers:
- Small Employers (≤50 covered employees): Exempt from mandatory separation payout of accrued unused Paid Leave.
- Medium Employers (51–100 covered employees): For separations occurring between July 1, 2024 and June 30, 2025, payout was capped at a statutory maximum of 16 hours of unused Paid Leave. For separations occurring on or after July 1, 2025, medium employers must cash out 100% of accrued unused Paid Leave without a 16-hour cap.
- Large Employers (101+ covered employees): Must cash out 100% of accrued unused general Paid Leave upon separation.
- No Universal 40-Hour Cap: Although annual accrual caps at 40 hours under standard accrual schedules, employees may lawfully carry over up to 16 hours of general Paid Leave from the preceding benefit year. Consequently, a separated worker with carryover may be entitled to cashout of up to 56 hours (or more if permitted by employer policy). Final leave payouts are never artificially capped at 40 hours.
5. Employer Prohibitions & Retaliation Protections
Under 820 ILCS 192/20, employers are strictly prohibited from penalizing or retaliating against employees for exercising paid leave rights:
- Employers cannot require an employee to find a replacement worker before taking paid leave.
- Employers cannot implement attendance point systems that penalize lawful PLAWA leave use.
- Violations carry civil penalties under 820 ILCS 192/30 of up to $2,500 per violation, plus full compensatory back pay.
6. Frequently Asked Questions
What is the Illinois Paid Leave for All Workers Act (PLAWA)?
Enacted as 820 ILCS 192/1 et seq., PLAWA requires nearly all Illinois employers to provide covered employees with up to 40 hours of paid leave per 12-month period, accruing at 1 hour per 40 hours worked, usable for any reason without requiring proof or documentation.
How do Chicago paid leave rules differ from statewide PLAWA?
Under Chicago MCC § 6-130, employees accrue leave at a faster rate (1 hour per 35 hours worked) into two distinct banks: up to 40 hours of general Paid Leave AND up to 40 hours of Paid Sick and Safe Leave (up to 80 hours total annual leave).
Can an Illinois employer require a doctor’s note for PLAWA leave?
No. Under 820 ILCS 192/15(a), employees may use PLAWA leave for any reason of their choosing. Employers are expressly prohibited from requiring documentation, certification, or explanation.
Must unused Illinois paid leave be paid out upon employee separation?
Under statewide PLAWA (820 ILCS 192/15(b)), standalone statutory paid leave is not required to be paid out upon separation unless credited to a vacation or PTO policy. In Chicago (MCC § 6-130-020(a)(4)), small employers (≤50) are exempt; medium employers (51–100) were capped at 16 hours through June 30, 2025 and pay all unused leave on/after July 1, 2025; large employers (101+) pay all unused leave. Because carryover of up to 16 hours is permitted, payout is not capped at 40 hours. Paid Sick Leave is never required to be cashed out.