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Set up Illinois Paid Leave

by Intuit•25• Updated 4 months ago

Learn how to set up QuickBooks Payroll to track paid leave in Illinois.

Illinois has implemented a paid leave law called the Paid Leave for All Workers Act (PLAWA). This law guarantees most workers in Illinois 40 hours of paid time off each year for any reason. It'll take effect on January 1, 2024.

To learn more, see the Paid Leave for All Workers Act FAQ.

Additional details about IL PLAWA

  • Existing Paid Time Off (PTO) Policies: Employers with preexisting paid leave policies that provide employees at least 40 hours of paid leave and offer employees the option to take paid leave for any reason are exempt from modifying their policies to comply with the Act. 
  • Accrual: Paid leave can be accrued at a rate of one hour for every 40 hours worked
  • Carryover: All accrued but unused paid leave must carry over from one 12-month period to the next. Employers may establish a reasonable policy restricting employees’ ability to carry over more than 80 hours of unused paid leave.
  • Frontloading: Instead of accruing paid leave as work is performed, employers may frontload ‌paid leave upon hire and at the beginning of each 12-month period after that. 
  • Employee usage: Accrual of paid leave is required to begin on January 1, 2024. Employees aren't entitled to begin using ‌accrued paid leave until 90 days after the Act’s effective date or the start of employment. Therefore, the earliest day any employee can take time off is March 31, 2024.

Track IL PLAWA for your employees

Select your product below.

Note: Not sure which payroll service you have? Here's how to find your payroll service.

QuickBooks Online Payroll

If you are already tracking paid time off in QuickBooks Online Payroll you’ll need to review your current paid time off policy(s) to help ensure you meet the minimum requirement. Here’s how: 

  1. Go to Payroll, then Employees.
  2. Select your employee.
  3. From Pay types, select Start or Edit.
  4. Scroll down to the Time off policies section. Select Edit ✎ next to the policy to view the Hours per year box.
  5. Review your policy to make sure it provides the employee with at least 40 hours of PTO, including sick and vacation, for 12 months. If your existing policy doesn't meet the minimum requirements, you can create a new one or update the Hours per year box for the existing one.
  6. When finished, select Save.
  1. Go to Payroll, then Employees.
  2. Select your employee.
  3. From Pay types, select Start or Edit.
  4. Scroll down to the Time off policies section. From the Paid time off, Unpaid time off, Sick Pay, or Vacation Pay ▼ dropdown, select Add new [time off pay] policy.
  5. Complete the on-screen fields to create your policy, then select Save. To stay compliant, make sure your policy provides the employee with at least 40 hours of PTO, including sick and vacation, for 12 months.
  6. When finished, select Save.

QuickBooks Desktop Payroll

If you are already tracking paid time off using the vacation and sick policy schedule, you’ll need to frontload the IL Paid Leave hours.  

Note: This option is limited to sick accruals using the Beginning of the year method.

To do this: 

  1. Create a new time off Sick Pay payroll item. Name it, IL Paid Leave.
  2. Modify your existing Sick Pay time off policy.
    1. Select Edit, then Preferences.
    2. Select Payroll & Employees, then go to the Company Preferences tab.
    3. Select Sick and Vacation.
    4. Add the additional hours to (e.g., 40) in the Hours accrued at the beginning of the year field.

If you aren't actively using the Sick policy schedule, you’ll need to set up a new Sick Pay payroll item.

Follow the steps in the Set up and track time off in payroll to create a new Sick Pay payroll item. Name it, IL Paid Leave.

Get a report for IL PLAWA

  1. Go to Reports, then Standard.
  2. Search for Vacation and Sick Leave.
  1. Select Reports, then Employees & Payroll.
  2. Select More Payroll Reports in Excel, then Employee Sick & Vacation History.
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