What’s wrong with Illinois mandating paid leave for any reason? Plenty. – Wirepoints

By Mark Glennon*

Beginning next year, Illinois employers of any size will be required to provide at least 40 hours of paid leave per year to be used for any reason. That will be under the Paid Leave For All Workers Act which was passed by the General Assembly that Gov. JB Pritzker says he will sign. It’s described nicely here by JD Supra.

“Don’t we think that should be a basic human right?” asked the senate chief sponsor, Kimberly Lightford (D-Maywood), during floor debate on the bill.

And the Chicago Tribune, in an editorial headlined “What took Illinois so long?” asked,  “What reasonable argument could be constructed against this humble and humane provision? We can’t think of one.”

Well, Sen. Lightford and Tribune, here’s a question for you: Why should employers be singled out to pay for a human right, this “humble and humane provision”?

                   Why me?

The new Act is the latest in Illinois’ knee-jerk imposition of unfunded mandates on employers for policy goals. If we as a people want to grant something as a universal right, even a reasonable one like that created by the Act, shouldn’t we as a whole pay for it in some manner?

The new act may seem humble, but not to employers when added to all the other matters that have made them the beasts of burden for policy goals.

It’s all particularly overwhelming for smaller businesses and new entrepreneurs trying to understand wage and hour rules, disability accommodations, paid vacation, insurance, other benefits, unemployment insurance and much, much more. We’ve stuck employers with the burden of handling all of that, and much of it should not be at their cost.

The consequence should be obvious – fewer jobs and flight by employers to locations that try to make their lives easier.

That’s part of why, incredibly, Illinois has created no net new jobs in 20 years.

Only two other states mandate paid leave for any reason.

There’s another problem with the Act, which is also common with government intervention: Unintended consequences may well cancel out any benefit.

The reason is shown in a new study published just this month on the unintended consequences of a very similar mandate, the federal 1993 Family and Medical Leave Act. The study is published by the National Bureau of Economic Research.

The study looked at how the wage gap between men and women narrowed consistently since the 1980s, and how that progress plummeted since about the time of the Family and Medical Leave Act.

The study found that introduction of the family leave law explains 94% of the reduction in the rate of gender wage convergence. “[I]f gender wage convergence had continued at the pre-family leave rate,” the study’s authors wrote, “wage parity between white women and white men would have been achieved as early as 2017.

It’s not the first such evidence. “There is a growing body of evidence documenting the negative causal impacts of leave policies on women’s relative progress in the labor market,” as the study described.

Why? Because employers and workers basically strike an agreement on total compensation and benefits. When the government comes along and mandates a particular benefit, it ends up being cancelled out by a reduction in wages, returning total compensation package to what was agreeable to both sides.

A column about the study in The Daily Signal put it another way. A government mandate for one benefit will “crowd out” employers’ capacity or willingness on another benefit.

Paid leave like that mandated in the federal law and Illinois’ new Act are worthy goals, but what’s a better way to get there? What will really work?

As the Daily Signal wrote, “policymakers should help expand access to paid family leave through policies that make it easier and more economically feasible for private employers to offer their own programs” and they should remove “costly and unnecessary regulations so that employers have more resources to provide paid family leave that’s better tailored to their businesses and to their employees’ needs.”

Don’t expect Illinois policymakers to understand any of that. Or to care. They will continue to pound remorselessly on employers. Those who haven’t yet fled, that is.

*Mark Glennon is founder of Wirepoints.

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Paul Boomer
1 year ago

Do less work and get more play Also give me lots more pay You don’t needs skills for the work If you expect that you’re a jerk Sit at home and collect a check Why do work and risk your neck Liberals made me feel this way Stay at home collect your pay Hiring now the signs out there Get a job well I don’t dare Why should I work just like a fool I was taught that while in school Own a company create some jobs I should work you’re just a snob Lots of suckers but no not… Read more »

Tim Favero
1 year ago

Excellent article Mark. The Democratic politicians in this state just don’t get it.

Aaron
1 year ago
Reply to  Tim Favero

Yes, they do.

The Paraclete
1 year ago

Can I stay home too?

Wally
1 year ago

Can you take paid leave without notice? Can you take leave the day before or after a holiday? What if several employees take leave on the same day without any or minimal notice? These are real concerns for businesses with fewer employees. What if several employees take paid leave on Black Friday or December 26, two of the busiest days of the year? How do you cover for those missing employees and how will the other employees feel? Will they do it next time? Amazing how all these benefits can be taken advantage of to the detriment of the business.

Pensions Paid First
1 year ago
Reply to  Wally

Can you take paid leave without notice?”

If it’s foreseeable, employers can require 7 day notice. Obviously no notice is needed if its not foreseeable. Not sure how you provide notice of a car accident, hospitalization or death of a family member. Unforeseen circumstances can happen on the Black Friday or December 26th.

Wally
1 year ago

Oops, it’s the day after Christmas and three employees have sick children and another had a car accident. Who’s going to work? Think it can’t happen? Guess again. Gonna require doctor’s note or police report? I’ve seen it happen.

Wally
1 year ago
Reply to  Wally

Or, it’s the long Memorial Day or Labor Day weekend and everyone wants paid leave on the Friday before. Don’t want to use vacation time. Who do you give it to? First come, first served? Can they file a complaint for denying leave?

Pensions Paid First
1 year ago
Reply to  Wally

As you’ve noted, you’ve seen it happen. This could happen whether this law was passed or not. If employers are having trouble getting employees that want to work on those days they may need to offer up better incentives.

Poor Taxpayer
1 year ago

The workers are getting “PAID TO LEAVE THE STATE OF ILLINOIS”, this is a great plan for the future. Everyone should Leave Illinois and let the state become a ghost town.

POOR TaxPayer
1 year ago
Reply to  Poor Taxpayer

At the all Male steambath the other day oh my! Dropped my towel and woo hoo, game on!

Poor Taxpayer
1 year ago

Another reason to NEVER open a business in Illinois.

Being Had
1 year ago

Some companies have personal days.  When the number per year is less than 5, then those companies will have to increase the number to make it 5.   The law was probably aimed at businesses stringent about time off, without respect to the reasons why. Saying that paid leave can be taken for any reason implies that an employee isn’t responsible for attending to their work and, at will, can compromise their employer, other employees, or customers.  There can be requirements for giving notice.  At least that’s something, but probably not enough.     I didn’t read the whole act and saw only that health care… Read more »

Agatha
1 year ago

I can hear the shuttering of small businesses already.

Pensions Paid First
1 year ago
Reply to  Agatha

That 30 cents an hour increase to a minimum wage worker is goings to put small businesses out of business? If that’s the case, they were going to fail anyway.

Those same small business have been devastated by inflation much more than this law. Most employers can’t find someone to work for minimum wage with minimum benefits anyway.

Poor Taxpayer
1 year ago

Try and start business and see how easy it is. You would fail before you started. Nothing but a government Lackie.

POOR TaxPayer
1 year ago
Reply to  Poor Taxpayer

I was usually drunk at my previous job and took lots of days off. The boss often asked me if I the Budweiser Flu again. Dead end job, barely made minimum wage and always late or a no show. I was treated horribly at that place and co-workers absolutely detested me. Nice to see the government taking care of useless people like me.

vb
1 year ago
Reply to  POOR TaxPayer

I remember that job. The bad attitude, the foul language, the harassment…they finally asked me to leave.

Aaron
1 year ago

How would you know?

McGrats
1 year ago

This can be a disaster for an employer…. either big or small, to maintain any sense of cohesion in scheduling their workforce. For example, if too many employees in department “A” decide to take off at the same time, all other departments can be affected… upstream and downstream. And that means production can and will be negatively impacted. And so will the bottom line. If schedules can’t be maintained, customers can… and will, seek out a new supplier. It seems that Prickstir, and the Psychocrats running state government, are stuck in some type of time warp. This isn’t the 1950’s… Read more »

LindaP
1 year ago

Government over-reach!

jajujon
1 year ago

Why is the government even into this matter? Because it’s about control, imposition and regulation, all which further secure a bureaucrat’s existence. Let the market dictate benefits, thereby causing the employer to adapt to market (employment) conditions. But no, we can’t let citizens and businesses operate freely. They might like the notion of limited government. Then what? Better to beat them down with more and more economic and policy burdens. Maddening . . .

Mark
1 year ago

Being self employed last 10 years I finally get a weeks vacation,its about time,great law!!! So who pays me?

Pensions Paid First
1 year ago
Reply to  Mark

You do. Maybe threaten to go on strike and get more.

Poor Taxpayer
1 year ago

When someone gets more someone gets less. Government Lakies have destroyed Illinois for a few, and the majority are harmed. Must feel good to steal from Unborn children.

Riverbender
1 year ago

Nice pay hike for Illinois workers to be added to the minimum wage rate. On one hand I think this is a really nice benefit; on the other it might prevent companies from migrating here. No big deal on that though because I assume there will be assorted credits provided to companies to locate here. Naturally this raises taxes upon the rest of us but that is no big deal. When have taxpayers ever been considered in Illinois legislation?

Pensions Paid First
1 year ago
Reply to  Riverbender

$15 an hour employee now costs %15.30 with this law.

jajujon
1 year ago

Employ kiosks and avoid all this nonsense.

Riverbender
1 year ago

Mathematically I can agree with you however don’t forget there are assorted other costs such as workman’s comp that create a situation where the cost is considerably over 15.30 per hour. A bigger issue here though to me is that this is just another burden placed upon Illinois employers who seem to be leaving. Question though do edge credits mean employee costs are basically temporarily wiped out distorting my view on this?

Pensions Paid First
1 year ago
Reply to  Riverbender

Of course there are other costs. I’m not implying that this is their only cost when it comes to labor. It’s just that the sky is not falling as some have suggested. This is a 3% cost increase to the hourly wage. As you’ve noted, there are many other cost associated with the employee so the actual increase in total labor cost is less than 3%. This really only impacts minimum wage employers that offer less than one week of time off. With the massive inflation that’s been going on, how many people in Illinois fall into that category? The… Read more »

Riverbender
1 year ago

Out of all the labor laws Illinois has, this one is mild by comparison.”

Ill buy that 100000%! Consider though it is just another straw on the pile that might be “the straw that broke the camel’s back.” when it comes to moving or instituting a business in Illinois. I do however recognize that it is a nice benefit and perhaps it would be better suited as a national policy rather than a state one to keep the playing field level.

Pensions Paid First
1 year ago
Reply to  Riverbender

I agree with most of what you wrote. The people who make these laws and many democrat voters have a different outlook.

When you state business won’t come here their response would be that only business that pay minimum wage and don’t offer benefits won’t move here. They see that as positive. They see it as any business that can’t offer a living wage and proper benefits shouldn’t even remain in business. What you see as a problem they see as a benefit.

your dime, your dance floor
1 year ago

The cost of an employee to the employer is more than just their salary. The employer pays state and federal unemployment insurance, workmans comp, medicare and social security taxes. All costs get paid and the business owner will try and pass as much of his costs to his customers as possible.

Marie
1 year ago

Can employees add this week to a 2 week vacation and take 3 weeks? Do they have to schedule a whole week off or can they do it a day at a time? Can this week be added to sick time? Will employees be understanding when work hours get cut to make up for the cost of this benefit? What if someone takes the week with pay knowing they are quitting the next month? If they quit and haven’t used the week do they still get paid for it? What about litigation over this week? The private sector can’t afford… Read more »

Pensions Paid First
1 year ago
Reply to  Marie

What if someone takes the week with pay knowing they are quitting the next month?”

Sounds like a smart use of ones vacation time. I know if I worked for an employer that didn’t pay out my PTO time then I would take it before I left. Who wouldn’t?

Wally
1 year ago

Since you’re obviously a governmental union employee, you’ve never run your own business with multiple employees. I gave employees five personal days per year. One three year employee took the five days mid January, then quit upon returning after only working two weeks that year, yet getting 5 personal days. I was forced to amend the policy so that employees could only earn 10 hours personal time per quarter. Other employees were PO’d at the change but also at the employee who caused it.

Pensions Paid First
1 year ago
Reply to  Wally

You learned from your mistake and made adjustments. Good for you. You upsetting your other employees by the change in the policy was probably not the brightest. My guess is you were angry and this was your way of letting the other employees know. You could of also changed your policy so that it was accrued throughout the year and ALSO allow your employees to go in the negative by as many as five days. You may have had to re-word your policy to ensure legal compliance but definitely allowed. If they left during the year you could have then… Read more »

Wally
1 year ago

The employees mad at the change were mad at the employee forced the change, not at me for making it. They were unhappy but understood the need. They were actually the ones who had the most outrage at what happened. The problem is, for every benefit, there is someone who will manipulate it to their advantage.

Pensions Paid First
1 year ago
Reply to  Wally

You could have accomplished the same thing without penalizing your “good” employees. Lazy management behavior not finding a better solution.

nixit
1 year ago
Reply to  Marie

I’m pretty sure there are accrual rules written into the legislation, but there’s bound to be a lot of misunderstanding from both the employer and employee. Most employees who leave with banked PTO time they won’t get paid out for will give a 2 week notice then use up that PTO over that 2 weeks (ie I’ll get a paycheck for the next two weeks but I have two PTO days left, so technically my last day working is the following Wednesday). If you’re fired, you don’t get paid for remaining PTO, which is why many employees use those days… Read more »

Pensions Paid First
1 year ago
Reply to  nixit

There are different accrual rules based on how PTO is awarded. All at once at beginning of the year vs accrued with hours worked. Those two methods have different carry over rules. Also, as far as pay out if you quit. Nothing in this Section or any other Illinois law or rule shall be construed as requiring financial or other payment to an employee from an employer upon the employee's termination, resignation, retirement, or other separation from employment for paid leave accrued under this Act that has not been used. Nothing in this Section or any other Illinois law or rule shall be construed as… Read more »

Where's Mine ???
1 year ago
Reply to  Marie

Yes, disastrous to Illinois small business owners. One more reason for business to switch to treating empolyees as contract/1099 workers…or head for the border. Does anyone in Springfield care?

nixit
1 year ago

Politicians and the public sector in general doesn’t understand compensation. All these added “benefits” are factored into our compensation package one way or another. While the employer technically pays, it is the employEE who bears the cost. Pensions are a perfect example of this. We somehow managed to separate pensions from wages when they are in fact one in the same. When the cost of one goes up, it should impact the other in a negative way. Are employees willing to take a smaller raise today for a larger pension contribution? Here’s a good experiment: Next AFSCME contract, offer two… Read more »

Pensions Paid First
1 year ago
Reply to  nixit

Why would any AFSCME agree to option 2? The employer is required to cover the pension contributions regardless of the contract negotiation. That would be like me going to my mortgage company and asking them to take a smaller payment if I agree to invest more money into the upkeep of my house. Maintaining the house is my responsibility and not theirs just like actuarially funding the pensions is the employer or the state.

They’re smarter than you realize.

nixit
1 year ago

That would be like me going to my mortgage company and asking them to take a smaller payment if I agree to invest more money into the upkeep of my house

Again with the false equivalency of comparing a pension to a transferrable asset. Please stop.

They don’t value the true cost of their pension. Never have. They kind of understand how the cost of heath benefits impact their salary, but not the pension cost. Their concept of what constitutes compensation is far removed from reality. This comes from decades of misinformation by elected officials and their union leaders.

Pensions Paid First
1 year ago
Reply to  nixit

They don’t value the true cost of their pension.”

I agree that most don’t truly understand the cost of their pension. With that said it’s not their responsibility. Just as it’s not my mortgage holders responsibility to upkeep my property. Yes they care that it’s maintained because it backs the loan but they are not going to pay for it.

Pensions are an asset to the pensioner. You want to pretend like it’s some benevolent gift that public sector workers should negotiate with each contract. They don’t need to nor will they.

nixit
1 year ago

I might be one of the few people that don’t begrudge people getting a pension. My issue has always been its true value has never been properly accounted for in the overall compensation package. Well, that and the 75 year contract written into stone… In my ideal scenario for teacher pensions, the state would cover all normal pension costs up to $60,000 salary and the local school districts would cover any amount above that. It would have given the locals more skin in the game, allowed the state to put more money directly into the classroom, but also suppressed wages… Read more »

Where's Mine ???
1 year ago

I’m confused from the JD Supra articale– paid leaves not the same as sick days? Correct?, so it’s a new benifit in addition to vacation and/or sick days?
Therefore, my biggest worry as taxpayer– are the public sec hero/folks covered under collective bargaining deals getting an additional new benefit? an extra 40hrs bankable time off on top of their sick days and innumerable other contractually negotiated way to take days off all on the taxpayers dime?

Pensions Paid First
1 year ago

It’s about PTO, which is used for both sick and vacation time. Nothing requires the employer to offer more time than the law so if the employee is already getting 5 days of paid leave then they are in compliance. There are other rules about letting employees actually take the time off but this doesn’t add costs to those employers.

Where's Mine ???
1 year ago

PPF–your stating PTO (paid time off?) is the same as “paid leave? What is states legal definition of PTO?

I tried to read the SB0208 bill (I have no life), and I don’t see where “paid leave” is legally defined or defined as being different from “paid sick leave”, “paid vacation” or “paid holidays”, etc. Bill does state several times–“paid leave, including paid sick leave or paid leave”? is this stating “paid sick leave” is included in “paid leave”?

Bill also has language that certain terms expire after 1/1/24, which I don’t understand either

Pensions Paid First
1 year ago

The bill doesn’t differentiate as you’ve noted for purposes of getting paid. It outlines foreseeable (vacation) vs unforeseeable (sick or death in family etc) in terms of employee notification but otherwise it’s all paid leave. As long as the employer offers at least 5 days per year that can be used as sick time or vacation/holiday time AND allow them to utilize the leave, then they will be in compliance. The 1/24 date is the effective date. Also they mention CBA’s that are already in effect and what changes can be made after that date. I don’t see anything about… Read more »

Bosco
1 year ago

If this is allowed , companies should just cut any offered vacation time. If you got two weeks , now you will only get one,…. plus your 40 hrs. mandated time off.

Last edited 1 year ago by Bosco
Pensions Paid First
1 year ago
Reply to  Bosco

No need to do that as a company that already offers 2 weeks is already in compliance. Nothing in the text of the law requires additional time off for those employees.

(c) Nothing in this Act shall be construed to discourage employers from adopting or retaining paid sick leave, paid vacation, paid holidays, or any other paid time off or paid leave policy more generous than policies that comply with the requirements of this Act.

This law just sets the minimum paid leave standard.

Terry Sexton
1 year ago

Some ask-WHY IS GOVT INVOLVED IN AN EMPLOYER/EMPLOYEE TRANSACTION? The govt will protect you,damn the consequences!

Joey Zamboni
1 year ago

“””—Because employers and workers basically strike an agreement on total compensation and benefits.—“””

How will this law be affected by the recent Amend. 1 passage…?

Will Amend. 1 allow it to be enshrined in contracts into perpetuity…?

Pensions Paid First
1 year ago
Reply to  Joey Zamboni

Employees in Illinois already have the right to join a union and collectively bargain. Amendment didn’t change that right. It changed the right of future legislatures from moving Illinois to a right to work state.

Last edited 1 year ago by Pensions Paid First
ToughLove
1 year ago

Don’t most full-time workers already get at least 2 weeks of vacation? All employers have to do is reduce it to 1 week and call the second week paid leave. Am I missing something?

Pensions Paid First
1 year ago
Reply to  Mark Glennon

This act requires 1 week of paid vacation per year or 1 out of 51 weeks worked. I agree that this puts pressure on small employers and the additional cost is about 3% of an employers payroll. As long as the employer is paying above minimum wage, they could also freeze salary increases or cut salaries by 3% and be left whole. From an accounting perspective, that $15 hour employee now costs about $15.30.

While I don’t believe it’s necessary for government to step into this type of situation, it’s something that employers can overcome.

Former Illinois Wimp
1 year ago

I think you get thumbs down no matter what you say PPF. It says more about them than you. They are bitter and angry looking for someone to blame. Some are also angry at themselves for staying too long in Illinois.

Hale DeMar
1 year ago

The costs will only be passed off to the consumer/customer by way of prices. Similar to a Three Card Molly Game ! If the costs aren’t to be shouldered by the employer by way of increased prices in their services, then God didn’t make little green apples !

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“We are not in good shape” Wirepoints’ Ted Dabrowski told ABC 20 Champaign during a segment on Illinois’ latest population losses. Illinois was one of just three states to shrink in the 2010-2020 period and has lost another 300,000 people since then. Ted says things need to change. “It’s too expensive to live here, there aren’t enough good jobs and nobody trusts the government anymore. There’s just other places to go where you can be more satisfied.”

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