Under the Illinois Wage Payment and Collection Act (WPCA), employers have different obligations to employees depending on the kind of leave they provide, especially at termination.
Traditionally, employers provide two separate banks of time off: sick leave, which is only available when an employee is actually ill, and vacation or personal time, which is available without condition. However, there has been a recent shift toward merging these two banks into one: paid time off—which can be used for any purpose.
The WPCA requires that employers pay out earned leave upon termination. This means that sick leave, which is technically only available to employees who are ill is not considered earned and doesn’t need to be paid out. On the other hand, vacation and paid time off are considered earned from the get-go, as they can be used for any reason, and must be paid out in full at termination. If an employer fails to pay out for earned leave at termination, it will be liable for damages under the WPCA.
If you have questions about your time off policy contact us for a free, 30-minute consultation with an employment lawyer.