Employers And The Illinois Wage Payment And Collection Act

Illinois businesses and employers, large and small know that paying employer taxes is required, the same as workers’ compensation. But how does your company know how much to pay and when? Do you need to pay more if your ex-employee filed for unemployment? It is essential to understand the answers to these questions and recent updates to the Illinois Wage Payment And Collection Act. Our Chicago unemployment defense lawyers at North Suburban Legal Services can answer any additional questions you have.

Illinois Wage Payment And Collection Act (IWPCA)

The Illinois Wage Payment and Collection Act is a law that governs Illinois employment law and how unemployment benefits are administered in the state. The Act contains provisions in these areas:

  • Who is covered under unemployment
  • What companies need to do to comply with the law
  • What parties are considered employers
  • How unemployment earnings should be deducted from gross income

The Act also details the duties of the Illinois Department of Labor and how Act violations are investigated. Last, the Act has provisions that outline remedies to companies for unpaid wages. This offers employees legal options when they are not paid their wages promptly. The state’s labor department can now deal with claims for wages less than $3,000.

In an earlier legislative session, the state legislature passed an amendment to the Act that doubles the compensation a worker can recover from their employer in a wage claim. Employers that do not pay their workers’ earned wages every two weeks or make the final payment to an ex-employee within a single pay period can be fined. The punishments may be up to 5% per month, increasing from 2%.

If a wage disagreement has gone into litigation, the company can still be fined throughout the lawsuit. The recent amendment to the Illinois Wage Payment and Collection Act. It also increases possible liability for Illinois employers, so it is important to work with your attorney to respond in a timely manner to unpaid wage claims.

What Should You Do If You Have An Unemployment Wage Dispute?

If current or former workers filed a wage claim against your Chicago firm, you should promptly retain an unemployment defense attorney. Your business may be penalized as the case proceeds, so the sooner you have an attorney, the better. The IWPCA includes enhanced worker protections and has increased unemployment insurance premiums for businesses in Chicago.

Companies that fail to comply with the Act or do not pay wages on time or at all could be criminally prosecuted. An ex-employee who brings a successful wage claim against your company also may receive legal fees from your business. So, the stakes are high. Chicago employers should review their employment agreements and wage practices to see if they comply with the Act. Our attorneys can help with unemployment litigation and enhance your protection against future liability.

Frequently Asked Questions

The Illinois Wage Payment and Collection Act is complex, and it is standard for employers and employees to have questions. Some of the most common questions are:

Who Is Covered By The Wage Payment And Collection Act?

The Act covers private employers and departments of the local government. State and federal workers are exempt from the law. The work must be performed in Illinois for the workers to claim under the law. For instance, a trucker who lives in Illinois but travels throughout the Midwest for work is probably not covered.

Independent contractors cannot file a claim under the law. However, a decision about whether a person is an independent contractor or an employee must be made after a fact-based inquiry.

How Often Is The Employer Required To Pay My Wages?

Every covered employer must pay wages earned to workers at least semi-monthly. The wages must be paid 13 days after the conclusion of the pay period for which the pay was earned. However, professional, administrative, and executive employee wages can be paid monthly.

What Must An Employer Do After It Receives A Claim Notice?

The company must respond to the claim by doing one of two things. First, it can resolve the claim without additional costs by writing a check to the Illinois Department Of Labor for the claimed amount. Second, you can challenge the claim by completing a questionnaire and answering each complaint allegation.

What Happens After The Claim Notice Response Is Received?

After the Department gets all the necessary information, it will do an investigation and decide. If the Department decides there are issues of fact, a formal hearing will be scheduled with an administrative law judge.

What Are The Penalties The Employer Can Pay If The Judge Upholds The Claim?

If the claim goes to a hearing and the judge finds in favor of the employee, in addition to what is owed to the worker, the employer will need to pay an administrative fee. It also will have to pay statutory damages – 2% of what is owed, multiplied by the months that have passed since the underpayment and when the judge’s order is paid. If the employer does not comply with the order after 15 days, a penalty of 20% is imposed.

Can The Company Owner Or Officer Be Held Personally Liable For A Claim?

Anyone in the organization, including owners, corporate officers, and others who act in the interest of the employer related to an employee is considered by the Act to be an employer. So, they could be held personally liable for wages and compensation owed.

How Long After An Employee Is Fired Or Quits Does The Employer Have To Pay?

All final compensation has to be paid to you on the next payday.

How Long After An Employee Leaves Can They File A Wage Claim?

They must file a wage or final compensation complaint within a year after the wages were due.

Contact Our Chicago Unemployment Defense Lawyer Now

Did a former employee file an unemployment claim without cause? If you think the unemployment claim is false, you should retain an attorney immediately. Our Chicago unemployment defense attorney at North Suburban Legal Services can help your defense, so call (312) 909-6089.




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