Prairie State Wire

The Illinois Senate has decided to extend its committee and third-reading deadlines to May 9 for a proposed bill known as SB 2413. This bill, introduced by Villivalam, aims to introduce a payroll tax on Illinois workers and employers to facilitate a state-operated paid-leave program.

Currently under consideration in the Paid Leave Subcommittee of the Senate Executive Committee, the legislation proposes an initial payroll tax of 1.12% on wages beginning January 1, 2027. At the outset, employees would bear 40% of this tax, while employers with 25 or more employees would handle the remaining 60%. Starting January 1, 2029, it is proposed that all employers cover 60% of the payroll tax. The proposal includes safeguards as the percentage may change based on program expenditures; nonetheless, the tax would not exceed 1.25% of wages.

In comparison, Minnesota enacted a similar measure in 2023 and adjusted its payroll tax even before the program was fully implemented. According to the Illinois proposal, employees could be eligible for up to 18 weeks of paid family and medical leave annually. Furthermore, an additional 9 weeks of paid leave would be accessible for issues related to pregnancy.

The leave program would authorize several situations, including personal health issues, medical care for a family member, birth, adoption, child placement, pregnancy-related issues, and domestic or sexual violence experiences either personally or relating to a family member.

During approved leave periods, individuals would receive 90% of their average weekly benefit rate, up to $1,200. The maximum payment rate would be adjusted yearly to reflect the state's weekly wage rate. Importantly, the proposed payroll tax would not apply to the first $15,000 of income or any income over $352,200, or "2 times the Social Security contribution and benefit base…whichever is greater."