CHICAGO – As the calendar flips to a new year, a host of new laws in Illinois and elsewhere will take effect, including a number of which employers should particularly be mindful.
On Jan. 1, for instance, the Illinois Employee Sick Leave Act (IESLA), signed into law by Illinois Gov. Bruce Rauner four months ago, will expand employees' rights to use paid sick leave.
Despite its title, the law does not demand that Illinois employers provide paid sick leave if they have not done so already. It also does not expand the benefits offered under the federal Family and Medical Leave Act.
The new law, however, does provide that employers offering paid sick leave must allow workers to also use the time off to care for a spouse, domestic partner, child, parent, sibling, parent-in-law, grandchild, grandparent or stepparent who requires medical attention or is ill.
The usage of sick leave in this manner is addressed by the law, which notes that the time allotted for such use must not be “less than the personal sick leave that would be accrued during six months.” Earlier in 2016, Chicago and Cook County both passed ordinances containing similar provisions. Those ordinances, which also mandate employers provider employees with paid sick leave, take effect July 1, 2017.
In speaking with the Cook County Record, E. Jason Tremblay, a Chicago attorney and partner at the firm of Arnstein & Lehr LLC, who counsels employers on a wide range of employment-related issues, depicted IESLA's impact on Cook County and Windy City employers as “a bit overlapping”, but did note some subtle differences. The county's ordinance, which mimics the one enacted by Chicago, has created some controversy, as a number of suburban Cook County communities have used state law to either "opt out" of the paid sick leave mandate, or indicated they will soon do so.
Cook County's rule also exempts government bodies and agencies, Indian tribes and unions. Chicago further exempts agricultural workers, “outside salespersons, members of religious corporations or organizations, students at an Illinois college or university … and employees of motor carriers. Both ordinances exclude construction workers subject to collective bargaining agreements,” according to a blog posted by the Sheppard Mullin law firm.
Another law set to reshape the employment landscape on Jan. 1 is the Illinois Freedom to Work Act. Bred out of a controversy involving a non-compete clause that fast food franchiser Jimmy John’s and several Jimmy John’s franchisees operating in Illinois had with low-wage employees, the new law effectively ends the use of non-competes by private businesses for employees earning $13 an hour or less.
Tremblay said this non-compete law was not well-publicized and “under the radar” of many employers, but has the potential to be more impactful than some may think.
Even with the new prohibition on non-competes for low-wage employees in Illinois, the law continues to protect an employer’s right to secure confidential information and trade secrets, as well as an employer’s right to restrict a departed employee from attempting to siphon away the business' customers or solicit others in other kinds of protected business relationships.
Illinois has made itself the second state in the union to mandate unpaid leave for the death of a child, stepchild or foster child. Passed on July 29 and immediately put into effect, the Illinois Child Bereavement Leave Act effects employers with 50 or more employees and allows for 10 days of unpaid leave following the death of a worker’s child, and 6 weeks if a second child dies within 12 months of the first.
The implementation of a law signed in 2015 by then-Gov. Pat Quinn and set to go into effect in 2017 has recently been postponed until early 2018. The Illinois Secure Choice Savings Program (ISCSP) mandates that employers who have at least 25 employees and have been in business for at least two years must offer their workers a retirement plan using Roth IRAs or allow access to the state program. If employees do not clearly opt out in writing, than at least 3 percent of their compensation must be deposited into the state-run plan.
The fact that the ISCSP is a program that creates employee pension plans funded by payroll deductions would normally subject it to the regulations set forth by the federal Employee Retirement Income Security Act of 1974 (ERISA). Yet an "informal opinion" by the Department of Labor (DOL) allowed the program to escape regulation because of the “safe harbor provision”. This exemption applies to employers who institute IRA payroll deduction programs, make their employees aware of the program, but do not endorse the program.
The minimum wage in Cook County and Chicago is set to rise in the New Year. On July 1, 2017, Cook County will elevate the minimum to $10 per hour and will be followed by a $1 increase per year until 2020. In a significant deviation from Chicago’s minimum wage increase, starting next year, tip-earning employees in Cook County, who are entitled to earn a minimum of $4.95 per hour under Illinois law, will also see the rise in their cash wages tied to the level of inflation each year. Chicago’s minimum will rise to $11 per hour and will also gain $1 a year for two years. Suburban Cook County communities have also indicated their intentions to "opt out" of the countywide minimum wage rules.
Employers, labor groups and others had also closely monitored the proposed amendments to the federal Fair Labor Standards Act, which would have extended overtime pay requirements to employees engaged in executive, administrative or professional duties and earning $913 a week or less, instead of the prior threshold of $455 a week. It was expected that around 4.2 million workers would receive a financial boost come Dec. 1, when the law was set to go into effect. However, in late November, a Texas federal judge enjoined the law from going into effect after 21 states and civic organizations petitioned the court saying the law was arbitrary and constituted bureaucratic overreach by the Department of Labor.
An appeal to this decision has been expedited, but Tremblay told the Record that it is likely that nothing significant will happen in the next “several months if at all.”
Tremblay went on to say that the U.S. Court of Appeals for the Fifth Circuit, which is generally known to be pro-employer, will likely not address the case until President-elect Donald Trump takes office. If the Department of Labor’s appeal is unsuccessful, there is no guarantee that a DOL under a Trump administration will even attempt to take the issue to the U.S. Supreme Court.
“I am not optimistic that the FLSA regulations, as currently written, will see the light of day," Tremblay said.
A new reality could emerge if the Fifth Circuit reverses the decision of the district court, causing, Tremblay says, “any number of things” to happen.
"The plaintiff-states could appeal to the U.S. Supreme Court or decide on the immediate implementation of the final FLSA regulations," he said.
For those employers attempting to stay ahead of the curve, Tremblay advised to keep up with what is happening on all levels of government, not just with federal regulations.
“Notwithstanding all the press associated with federal laws and regulations, be very mindful of state and local laws," Tremblay said. "A lot of (new legislation) is being passed at the state and local level that can have a significant impact on employers of all sizes.
"Illinois is becoming increasingly employee-friendly, and I am seeing a lot more legislation here in Illinois, Cook County and Chicago that first originated in states like California and New York, which generally provide greater employee rights.”