Illinois Wage Payment & Collection Act

The Illinois Wage Payment and Collection Act provides the rules on several important wage issues:

• Procedures for paying an employee
• Rules regarding deductions from wages
• An employee’s final compensation
• Penalties and liabilities for any violations

Contact our wage lawyer in Chicago online or by calling (312) 345-6603 to schedule a free consultation.

Understanding the Protections of the Act

The different protections of this act include:

• Paying an employee: Employers must pay employees their wages at least semi-monthly in cash, by check, or electronically. However, an employer can pay “executive,” “administrative,” and “professional” employees on a monthly basis, as the Federal Fair Labor Standards Act of 1938 defines those terms. Employers must also notify their employees at the time of hiring the amount of their pay, and both the time and place of payment. The Act further requires employers to post notices indicating the regular paydays, and the place and time for payment.
• Final compensation: The employer still must pay full compensation to a terminated employee no later than the next scheduled payday. If the employee has paid vacation days he or she did not use, then the employer must pay the employee the monetary equivalent of those days. An employment policy also cannot force an employee to forfeit any earned vacation days upon separation.
• Wage deductions: An employer can only make deductions from an employee’s wages when the deductions are (1) required by law, (2) to the employee’s benefit, (3) in response to a valid wage deduction order or wage assignment, (4) with the express written consent freely given at the time the deduction is made, (5) by certain entities for certain debts, or (6) the result of an accidental over payment. Even if the employer receives the employee’s consent to make deductions when the employee starts the job, the employer must still receive the employee’s written consent each time the employer makes a deduction. Finally, the Act states that accepting a disputed check is not a release of the balance of the employee’s claim.
• Liabilities and penalties: Violations of the Act can be severe. An employer can be liable to pay the unpaid wages, along with an interest payment of two percent for each month it failed to properly pay the wages. An employer is also liable for an employee’s litigation related expenses, including court costs and attorneys’ fees. Shifting costs to the employer is important because it provides an attorney with an incentive to help individuals with small wage disputes. Importantly, officers or agents that knowingly permit the employer to violate the statute can be individually liable. The Act even includes criminal provisions for willful violations.
• Enforcement: An employee can bring a lawsuit against an employer in civil court. Alternatively, an employee can seek help through the Illinois Department of Labor (“IDOL”). The IDOL is responsible for enforcing the Act and it attempts to resolve controversies between employees and employers. The IDOL can prosecute claims on an employee’s behalf, and can assess additional penalties to an employer.