We’ve seen vaccine mandates, mask mandates, and “stay at home” mandates. But now Illinois is going to have a “vacation mandate?” That sounds kind of awesome at first glance. Who wouldn’t like a nice vacation? But no… as usual, this isn’t something that will send individual workers to the beach for a week or so. Governor J.B. Pritzker signed a new law directly impacting employers. Every company will be forced to offer paid vacation time to all full-time workers starting next year. Vacation benefits for full-time employees are so ubiquitous these days that the law may not sound like that big of a deal, but the Democrats in Illinois have once again pushed the envelope to the point where some smaller employers will probably be damaged by this move. (Associated Press)

Illinois will become one of three states to require employers to offer paid time off for any reason after Gov. J.B. Pritzker signed a law on Monday that will take effect next year.

Starting Jan. 1, Illinois employers must offer workers paid time off based on hours worked, with no need to explain the reason for their absence as long as they provide notice in accordance with reasonable employer standards.

Just Maine and Nevada mandate earned paid time time off and allot employees the freedom to decide how to use it, but Illinois’ law is further reaching, unencumbered by limits based on business size.

We’re currently in a job market with so many openings and too few workers that pretty much every employer of any reasonable size already has to offer paid vacation time. Who is going to sign on for a job without benefits in such a competitive market? A study from Forbes last year showed that vacation benefits were being augmented at a majority of companies.

So does that mean that the new Illinois law won’t have much of an impact? Not quite. As I noted above, companies “of any reasonable size” are offering good benefits. But very small employers don’t always have the budget for that sort of generosity. Maine and Nevada are the other two states with mandatory paid vacation time, but they both exempt small businesses with fewer employees. The Illinois law offers no such exception, so this legislation may wind up driving some small operations out of business. And then their former workers will have no benefits at all while collecting unemployment.

The other odd feature of this law is the way that it specifies that time off must be allowed “for any reason.” This sounds like a solution in search of a problem. Have you ever worked for an employer who demands to know what you plan on doing during your vacation? I know I haven’t and I’ve been working for the better part of a half-century. Even the military never asked me what I planned to do while I was on leave. It’s understandable that most employers want some sort of a doctor’s note if you are using sick time, but for vacation?

At the heart of this issue, this new law in Illinois is yet another example of the state’s regulatory impulses overriding the free market. In the private sector, businesses have to compete for the best workers. The ones who offer better (but affordable) employee benefits will attract applicants. The ones with few or no benefits won’t be able to compete and they’ll be pruned from the employment landscape.

Meanwhile, it will be the small businesses taking it on the chin in Illinois. The Census Bureau defines a small business as one having fewer than 750 employees. But they also note that 56% of businesses have fewer than five employees. Those are not the types of operations that can afford to give everyone two weeks of paid time off every year as soon as they are hired. Maine and Nevada make exceptions for those types of companies. Illinois should have done the same.