Employers Must Pay Fines for Violations of Illinois Wage Payment and Collection Act

On May 25, 2021, both houses of the Illinois General Assembly approved a amendment the state law on the payment and collection of wages (“the law”). The change would require employers who break the law to pay damages of 5% of the amount of any underpayment of wages, compensation or pay supplements for each month following the date of payment in which the amount (s) owed. remain unpaid. This represents a 150% increase in the penalty, as the legal rate before this change was 2%. The measure will take effect upon signature by Governor JB Pritzker.

the Act covers private employers as well as local government units, including school districts, but exempts state and federal government employees. It requires that the wages of non-exempt workers be paid at least twice a month and that executive, administrative and professional employees, as defined by the Federal Fair Labor Standards Act (FLSA), be paid at least once. per month. It limits the time between the dates of salary payment and salary payment, depending on whether the employer’s pay period is weekly, fortnightly or fortnightly, and sets out specific rules for the final payment of salary and compensation when the separation from service of an employee. the employer. Notably, the law requires employers in Illinois to pay departing employees the full dollar value of all unused vacation accruals at the employee’s final rate of pay and prohibits any employment contract or policy from providing for confiscation of vacation earned during separation. The Act also prohibits employers from making deductions from wages or final compensation unless required by law or a valid order, for the benefit of the employee, with express written consent, or for certain foreclosures. – legally authorized stops.

Failure to comply with the law can cost an employer dearly: Employees who are not paid according to mandatory deadlines can file a complaint with the state Department of Labor or take legal action. In addition to recovering any underpayment and damages, a successful plaintiff will also be entitled to legal costs and fees, and the employer will also be liable to fines of up to $ 1,000. If the violation of the Act by an employer is found to be willful or fraudulent in nature, the employer will also be found guilty of a misdemeanor. Repeat offenders can be convicted of a crime.

The amendment to the Act only changes the severity of the penalty for non-compliance, not the substantive requirements imposed on employers. Nonetheless, now is a good opportunity for Illinois employers to ensure their exposure is limited by ensuring that their compensation practices are fully compliant with the law.