The Statewide Rule (PLAWA) 

Most Illinois employees can earn up to 40 hours of paid leave for any reason each year. You can let time accrue at 1 hour per 40 hours worked or front-load the annual amount at the start of your benefit year. Employees can use leave after 90 days; you can set reasonable notice rules, but you can’t ask the reason or require documentation. 

If you accrue time, unused hours carry over, though you only have to allow 40 hours of use per year. If you front-load, carryover isn’t required. Unused hours aren’t paid out at separation unless they’re part of a broader PTO bank that your policy pays out. 

Chicago Goes Further 

Chicago’s ordinance creates two separate banks: 

• Paid Leave (any reason): up to 40 hours per year 
• Paid Sick Leave: up to 40 hours per year 

Both accrue at 1 hour per 35 hours worked and apply once an employee works 80+ hours in any 120-day period within city limits. 

Employees can use Paid Leave after 90 days of employment and Paid Sick Leave after 30 days. 

• Sick Leave carries over up to 80 hours. 
• Paid Leave carries over up to 16 hours (unless front-loaded, in which case carryover isn’t required). 

Payout at separation depends on employer size: 

• Large employers (101+): must pay out all unused Paid Leave. 
• Medium employers (51–100): must pay out up to 16 hours through June 30, 2025. 
• Small employers (1–50): no payout required. 
  Paid Sick Leave is not paid out at separation. 

Keep Chicago’s two buckets separate from any statewide bank you use elsewhere to maintain compliance. 

Cook County (Outside Chicago) 

Many suburban municipalities follow the Cook County Paid Leave Ordinance, which like the state law provides paid leave for any reason at 1 hour per 40 hours worked. Some municipalities have opted out, so if you operate in the suburbs, confirm each location’s status and set your policy accordingly. 

How to Set This Up Without Headaches 

• Choose between accrual or front-load and define a clear benefit year. 
• Turn on distinct earning codes (PLAWA statewide; Chicago Paid Leave; Chicago Paid Sick Leave) and display balances in self-service. 
• Train managers: no reason required, no doctor’s notes for state leave, and no retaliation. 
• Reconcile quarterly for carryovers and, in Chicago, any potential payout exposure. 

Next Steps 

Turning complex compliance into simple payroll solutions is what we do best. Journey Payroll & HR can help you navigate Illinois’ evolving paid-leave rules with confidence from clean earning codes to easy manager training and accurate employee balances. Partner with us to keep your payroll running smoothly and your team focused on what matters most: your business.