Illinois' new paid leave law is a win for workers and a win for businesses

It is not often that passage of a new law can be considered both a win for workers and a win for businesses.

But in the case of a new paid leave law that was just signed by Gov. Pritzker, that is exactly the case.

Coming into 2023, Illinois was a $1 trillion economy with over six million workers. And yet 1.5 million of these workers lacked access to any paid sick leave, according to research from Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois.

Researchers noted that more than half of those without paid sick leave were located outside of Chicago. Of the estimated 760,000 workers who lacked access to paid sick leave benefits in the suburbs, majorities were men (57%) and white (62%).

Now, thanks to new legislation, called the Paid Leave for All Workers Act, that is all going to change.

Senate Bill 208 will guarantee 40 hours of paid leave per year for Illinois workers starting in January 2024. For those who work a traditional eight-hour day, this is the equivalent of five days - or one week - of paid time off. Importantly, workers can take paid leave for any reason.

Workers accrue one hour of paid leave for every 40 hours worked, meaning that they need to work at least 1,600 hours in order to get the maximum of 40 hours. But employers can choose to voluntarily offer their employees more paid leave than this statewide standard to attract and retain top talent.

While Illinois' new law will expand access to paid leave to well over 1 million Illinois workers, there are also a few exemptions in the new law. These include school districts and construction workers covered by collective bargaining agreements. This makes sense considering that public school teachers already get a minimum of 10 sick days per year and many union construction workers jump from employer to employer as projects are completed and have access to vacation savings benefits that deliver members the financial equivalent to paid leave.

Illinois already has a good idea of what to expect. In 2017, both Cook County and the city of Chicago enacted local sick leave ordinances. The Chicago ordinance extended access to more than 385,000 workers and, importantly, failed to produce the negative business impacts that opponents of such benefits claim.

In fact, Chicago experienced higher job growth than the rest of Illinois after it enacted its law. Research has helped to explain way, linking these laws with a variety of improved business outcomes - including higher workforce productivity, fewer costly turnover problems, a 39% reduction in the risk of infectious diseases outbreaks at workplaces, and a decided advantage in tight labor markets like the one we are living through today.

Equally important, research also associates access to paid leave with higher incomes for all Illinois workers, which are then redirected in the form of increased consumer spending and net job creation across the economy.

Illinois is not alone. Sixteen other states plus the District of Columbia ensure that workers have some access to paid leave, including for illness, for child care needs, or for escaping domestic abuse. Like Illinois' new law, Nevada and Maine allow paid leave to be used for any reason.

The growing trend of states implementing paid leave standards is not by accident.

It is because real-world data shows that paid leave delivers positive economic and public health outcomes at no net-negative expense to businesses. And it ensures that families can afford to pay bills during periods of high inflation - even when they are sick or need to care for loved ones.

Put simply, paid leave strengthens the labor market, boosts workforce and business productivity, and improves public health.

That's a win for workers, a win for businesses, and a win for the people of Illinois.

• Frank Manzo IV, MPP is the Executive Director of the nonpartisan Illinois Economic Policy Institute.