How Does the Illinois Wage Payment and Collection Act Affect Chicago Employers?

Businesses and employers of all sizes know employer taxes are mandatory in Illinois, just like workers’ compensation coverage. But how do you know what to pay and how often? Do you pay additionally if a former employee files an unemployment claim with the State? How will new updates to the Illinois Wage Payment and Collection Act affect Chicago employers? Our latest blog post provides guidance to employers regarding the enforcement of the statute.

What is the Illinois Wage Payment and Collection Act?

The Illinois Wage Payment and Collection Act is a statute governing employment law and the administration of unemployment benefits in Illinois. It contains provisions regarding:

  • What parties are covered under unemployment
  • What employers must do to comply with the act
  • What parties are deemed an employe
  • How unemployment wages should be deducted from gross pay

It also explains the role of the Illinois Department of Labor and how potential violations of the Act are investigated. Finally, the Wage Payment and Collection Act contains provisions regarding remedies to employees for unpaid wages.

In the previous legislative session, the Illinois Legislature passed an amendment to the Illinois Wage Payment and Collection Act (“IWPCA”) that doubles the amount an aggrieved employee can recover from an employer in a wage violation claim. Employers who fail to pay earned wages biweekly to covered employees, or fail to make a final payment to a former employee within one pay period can now be assessed statutory penalties. These punishments can be up to five percent a month, an increase from the previous two percent a month.

Even if a wage dispute has entered litigation, the employer can still be assessed penalties throughout the life of the lawsuit. This new amendment increases potential liability for employers.

What are Your Next Steps in an Unemployment Wage Dispute?

If a former or current employee has filed a wage claim against your Chicago business, you should contact an Illinois business unemployment lawyer as soon as possible. Because your business could be assessed penalties in the interim, the sooner an experienced lawyer can review your case, the better. The IWPCA has enhanced protections for employees while increasing unemployment premiums for law-abiding businesses.

Businesses that do not comply with the statute or allegedly fail to pay wages timely or at all could be subject to criminal penalties. A former employee who successfully brings a wage claim against an employer could also be awarded attorney’s fees from the defendant’s business. The stakes could not be higher. Employers should review their employment agreements and wage practices to determine if they are in compliance with the statute and to reduce potential liability. Our attorneys at North Suburban Legal Services can assist in active unemployment litigation and help bolster a business from potential future liability.

Contact Chicago Unemployment Dispute Attorneys at North Suburban Legal Services, LLC

If your former employee has filed an unemployment claim and they voluntarily resigned, or if you believe a false unemployment claim has been made against your business, it is crucial you contact an experienced Illinois unemployment attorney as soon as possible. Our lawyers at North Suburban Legal Services offer expertise in the areas of tax, business, and unemployment law and help businesses and corporations navigate unemployment disputes. We offer tailored advice to each client based on their unique circumstances and serve businesses throughout Greater Chicago. Call today to schedule a comprehensive case evaluation.




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