Illinois Paid Leave for Employers: State, Chicago and Cook County Rules

Paid leave requirements in Illinois are fragmented. The state law applies broadly, but Chicago employers are governed by separate (and stricter) local rules, and Cook County adds another layer. If you operate in multiple Illinois jurisdictions or cross state lines, you need to know which rules apply and where they conflict. This guide breaks down the employer obligations in each territory.

Illinois Paid Leave for All Workers Act (State Level)

Effective January 1, 2024, Illinois enacted the Paid Leave for All Workers Act (820 ILCS 192), a statewide mandate that covers most private employers in Illinois. This law sets a floor for paid leave rights that employers outside Chicago must follow.

Who Must Comply

The state law applies to employers with 1 or more employees working in Illinois. This includes sole proprietorships, partnerships, LLCs, and corporations. A handful of narrow exemptions exist, but they are uncommon. If you have staff in Illinois, assume you must comply unless your workers clearly fall outside it (for example, true independent contractors, or the narrow groups the Act carves out). For your specific situation, confirm your compliance status with the Illinois Department of Labor at www2.illinois.gov/idol.

The 40-Hour Minimum

Illinois paid leave for all workers requires that employers provide at least 40 hours per year of paid leave that employees can use for any reason. Unlike sick leave, which is restricted to illness or health-related purposes, this paid leave is unrestricted. Employees can use it for vacation, personal appointments, emergencies, or any reason they choose.

Employers have two options for meeting this requirement:

• Accrual method: Credit 1 hour of paid leave for every 40 hours worked. Accrual starts on the first day of employment, and employees can begin using paid leave after 90 days of employment.
• Front-load method: Give employees the full 40 hours at the start of the year (or hire date). Employers that front-load do not have to carry over unused leave and may require it to be used by the end of the 12-month period.

You can choose either method. Employers may designate any consecutive 12-month period in writing at the time of hire.

Carryover and Payout

Under the accrual method, unused paid leave carries over to the next year, but you are not required to let an employee use more than 40 hours of paid leave in a 12-month period. The Act does not require payout of unused leave at separation. If you credit this leave to a vacation or PTO bank, though, unused hours must be paid out at separation the same way vacation is under the Illinois Wage Payment and Collection Act.

Record-Keeping

You must track paid leave balances and make them accessible to employees. There is no mandated format, but records must be accurate and available for inspection by the Illinois Department of Labor if audited.

Cook County Paid Leave Ordinance

Cook County extends the state requirement through its own paid leave ordinance, which mirrors the Illinois state law. However, Cook County employers cannot hide behind the state baseline; they must still comply with Cook County rules for employees working in unincorporated Cook County territory or certain municipalities within the county (unless those cities have their own stricter rules).

Coverage and Requirements

Cook County's ordinance requires the same 40 hours per year for any reason, with the same accrual (1 hour per 40 worked) or front-load options. The carryover cap and payout rules are also identical to the state law.

Key Distinction: Chicago Exemption

Here is the critical point: employers in the City of Chicago are exempt from both the state Paid Leave for All Workers Act and Cook County's ordinance. Chicago has its own paid leave law (effective July 1, 2024) that supersedes state and county rules for Chicago workers. Do not assume Cook County rules apply to your Chicago employees. See the Chicago section below.

If you operate in both Chicago and unincorporated Cook County (or other Cook County municipalities), you will need to apply different rules to different employee groups. Payroll systems must be set up to track this distinction.

Chicago Paid Leave Ordinance (City Level)

Effective July 1, 2024, the City of Chicago implemented its own paid leave law that is stricter than state law. Chicago employers must comply with this ordinance for all employees who perform work within Chicago city limits, regardless of where the employer is headquartered.

The Dual Requirement: Paid Leave and Paid Sick Leave

The critical difference between Chicago's law and the state law is that Chicago requires both paid leave (for any reason) and paid sick leave (for health-related purposes) as separate entitlements. State law combines them into one "paid leave for any reason" bucket. Chicago does not.

Here is what Chicago employers must provide:

• Paid Leave (unrestricted): Up to 40 hours per year, for any reason, accrued at 1 hour per 35 hours worked or front-loaded. Covered employees can carry over up to 16 hours.
• Paid Sick Leave (restricted): At least 40 hours per year for diagnosing, caring for, or treating an existing health condition; preventive care; public health emergencies; care for a family member; or leave related to domestic violence, sexual assault, or stalking. Accrual is also 1 hour per 35 hours worked (or front-loaded), and employees can carry over up to 80 hours of unused paid sick leave.

Combined, Chicago employees are entitled to a minimum of 80 hours per year of combined paid time off (40 paid leave plus 40 paid sick leave), and each type has its own designated purpose.

Exemptions from State Act

Because Chicago has its own paid leave law, employers in Chicago are not subject to the Illinois Paid Leave for All Workers Act. You follow Chicago rules, not state rules. Do not apply the state law to your Chicago staff.

Chicago Fair Workweek Rules

In addition to paid leave, Chicago also enforces fair workweek (predictable scheduling) rules for certain lower-paid employees in seven covered industries: building services, healthcare, hotels, manufacturing, restaurants, retail and warehouse services. While not directly part of paid leave, these rules affect how employees access leave and schedule time off.

Chicago fair workweek rules require employers in covered industries to:

• Post schedules at least 14 days in advance.
• Pay 1 hour of predictability pay for shift changes made within 14 days.
• Provide advance notice of hiring expectations (e.g., how many shifts the employee can expect per week).
• Let employees decline previously unscheduled hours and decline work that starts less than 10 hours after the previous day's shift ended.

These rules interact with paid leave: employees must be able to request leave with adequate notice, and employers cannot penalize them for using paid leave by reducing future shifts. Confirm whether your Chicago business falls under fair workweek coverage with the City of Chicago Department of Business Affairs and Consumer Protection.

Paid Leave Accrual and Carryover: Practical Examples

To clarify how accrual works in practice, here are two scenarios:

Scenario 1: Illinois (Non-Chicago) Employee Using Accrual

An employee works 2,000 hours per year. Under the 1-hour-per-40-hours accrual method, they earn 50 hours of paid leave annually (2,000 divided by 40 equals 50 hours). The Act only requires accrual up to 40 hours a year, so many employers cap accrual at 40. Unused hours carry over, but you are not required to let the employee use more than 40 hours of paid leave in any 12-month period.

Scenario 2: Chicago Employee Using Front-Load

An employee in Chicago is front-loaded with 40 hours of paid leave and 40 hours of paid sick leave on January 1. Combined, they have 80 hours available on day one. If they use 20 hours by June 30, they have 60 hours remaining for the rest of the year. Because paid leave was front-loaded, it does not have to carry over, but unused paid sick leave carries over up to 80 hours.

Compliance Checklist for Multi-Jurisdiction Employers

If you operate in Illinois with employees in more than one jurisdiction, use this checklist:

• Identify which employees work in Chicago, unincorporated Cook County, or other Illinois municipalities.
• For Chicago employees: apply Chicago's dual requirement (40 hours paid leave plus 40 hours paid sick leave per year, accrued at 1 hour per 35 hours worked, separate tracking). Employers with 51 or more covered employees may also owe payout of unused paid leave at separation.
• For Cook County employees (outside Chicago): apply Cook County's ordinance or Illinois state law (40 hours paid leave for any reason per year), depending on whether the municipality is covered by the county ordinance.
• For other Illinois municipalities: confirm whether they have local ordinances; if not, apply state law.
• Audit payroll systems to ensure different rules are correctly applied to each group.
• Train HR and managers on the distinctions so leave requests are processed correctly.
• Document your accrual method (accrual or front-load) and carryover policy in writing and share it with employees.
• Keep records of hours accrued, used, and carried over for each employee in each jurisdiction for at least 3 years (standard employment record retention).

Best Practices and Pitfalls to Avoid

Use clear policy language. Write a paid leave policy that specifies your accrual method, carryover limits, payout rules, and how to request leave. Ambiguous policies lead to disputes and liability. Provide a copy to every employee at hire.

Do not restrict leave use unfairly. While you can have reasonable notice requirements and blackout dates (within legal limits), you cannot deny leave requests because business is busy or because of scheduling preferences. Leave is a legal entitlement.

Track accruals accurately. Use payroll software or manual ledgers to record hours accrued, used, and available. Errors in tracking expose you to back-pay claims.

Do not treat unpaid leave as paid leave. If an employee takes unpaid time off (FMLA, personal leave without pay, etc.), do not credit it against the paid leave requirement. Paid leave is paid.

Do not retaliate. Employees have a right to use paid leave without penalty. Do not reduce hours, demote, or schedule retaliation because an employee used leave. Retaliation is illegal.

Monitor changes to local laws. Illinois municipalities continue to update paid leave and scheduling rules. Check the Illinois Department of Labor website and city/county websites annually to ensure compliance.

Resources and Where to Get Help

State-level guidance: Illinois Department of Labor, www2.illinois.gov/idol, provides state law summaries and contact information for wage and hour questions.

Chicago ordinances: City of Chicago Department of Business Affairs and Consumer Protection (BACP) maintains current ordinances at www.chicago.gov/city/en/depts/bacp.html. The city's Office of Labor Standards publishes a paid leave FAQ and the required employee notice.

Cook County information: Cook County Government's website (cookcountyil.gov) hosts ordinance text and FAQs. Contact Cook County if you operate in unincorporated areas.

Legal and HR advice: Paid leave law is complex, especially in multi-jurisdictional settings. An employment attorney or certified HR professional familiar with Illinois law can review your policies and payroll practices.

Disclaimer

This guide is informational and does not constitute legal or tax advice. Paid leave law is subject to change, and interpretations vary by situation. Before implementing a paid leave policy or making changes to an existing one, consult a qualified employment attorney or HR professional in Illinois. Violations of paid leave law can result in penalties, back pay, and litigation.