By: Nick Binotti
It wouldn’t be a new year in Illinois without new unfunded mandates on businesses. Of the 300 new laws that took effect January 1, one of the most burdensome on employers is Illinois’ new Paid Leave for All Workers Act.
The act requires employers to provide their employees five days of paid leave each year – one hour earned for every 40 hours worked. Workers can use that paid leave for any reason and rollover any unused leave. A long list of rules and legalese around how to administer the law is sure to make doing business more difficult, with fines and civil penalties up to $2,500 looming over employers who don’t comply. Complicating things further is Cook County and Chicago also passed similar laws, forcing businesses to manage the differences.
The new law is yet another burden on Illinois’ struggling companies, which are already forced to operate in one of the nation’s toughest economic environments. Over the last five years, Illinois has had the second-worst employment growth in the country, while the state’s GDP growth has been the nation’s 8th-slowest. And Illinois’ unemployment rate is currently the nation’s third highest, meaning the new law will put even more workers at risk. (See Appendix.)
That spells trouble in particular for the Chicago metro area’s leisure and hospitality industry, which has stagnated and is still down 23,000 jobs from pre-pandemic levels. Chicago’s commercial sector is also on the brink of a doom loop, with one of the highest rates of distressed commercial real estate loans in the country. Concerns of crime and work-from-home have also contributed to changed commuter habits, with fewer workers coming downtown and using public transit.
Paid leave might sound good in theory in that it allows workers to recharge and address any personal issues. Who can be against that? But the law of unintended consequences always applies. It’s a complicated, expensive and inflexible rule that will likely make Illinois employers less competitive and result in fewer jobs – especially in a state that already boasts the nation’s 3rd-worst regulatory regime.
It’s perhaps why only two other states, Maine and Nevada, have a similar paid leave law.
Every mandate has layers underneath. From employment policy updates to payroll system adjustments to managerial training, the effort required to understand and implement paid leave – or any other government mandate – isn’t trivial. There is no simple plug-and-play to any new law.
That’s particularly true for small business owners. It takes focus away from vital operations and towards administration.
Worse, the law overlaps among the three governments. Cook County passed its paid leave ordinance in December and has slight variations from the state law. Chicago’s rate of paid leave, delayed till July 1, 2024, is one hour earned for every 35 hours worked, not 40 hours.
While government mandates like paid leave are passed with good intentions toward workers, the sum of those mandates are choking companies and leading to less jobs, undoing the benefits of those same “good intentions.”
Appendix.
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If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
Well Abbott has given Chicago an unfunded mandated and it’s getting more unfunded by the hour…..
I would shutter my business and move to a another state no matter what it costs. Next year the state of Illinois will continue to make more mandated dictates to business
owners. Maybe you can’t beat them but you sure as hell don’t have to join them. Take a hint and go where you’ll be appreciated.
Ever since the “ toilet bowl king, has been in Springfield, his laws have been stupid and
Destructive for business. The business owners
Will continue to not open new businesses or
Will shut down existing ones. Sit back and watch as both Illinois and Chicago fail.
The wailing and shouting will grow as taxes will not support all the bs thrown at us.
As sheriff Bart proclaimed in Blazing Saddles,
“ Whata we gona do, Whata we gona do”.
It’s typical that parasite Democrats (sorry to be redundant) would allow government bodies to opt out of this. They know it’s a law intended to destroy companies, putting people out of work and making them dependent on government for food and shelter. The Democrat party is the largest domestic terrorist organization in the country.
Government bodies aren’t able to opt out. They can only make their ordinance pertaining to Paid Leave For All more stringent. It puts small municipalities in a bad situation as well. A lot of downstate small municipalities use part-time and seasonal workers for summer help and snow plowing. Those employees will now accrue paid leave.
the big paid leave winners are the Chicago/Illinois lawyer-legal industry which is so behind the scenes integral to the Illinois machine. Employers will have to hire lawyers to comply and employees will have to hire lawyers to collect…It would be interesting to research how much legal industry was behind lobbying for city, county & state paid leave legislation or how $many$ campaign donations their making.
Legal news sites like JD Supra & Lexology are filled with articles on all the hoops companies will have to jump thru to $$comply$$.
Perhaps the new, “ re- imagined “ license plates should read “ Illinois- Land of Lawyers.”
Thumbs down from one of the men in little hats that flock to police involved shooting scenes, their business cards clutched firmly in hand.