Wage Payment Collection Law: What Illinois Employees Need to Know

In Illinois, employees have the right to receive their wages on time, and there are laws in place to protect them. Illinois law requires employers to pay employees at least twice a month, on regular paydays.

The wage payment collection law in Illinois is governed by the Illinois Wage Payment and Collection Act (IWPCA). This law sets out the rules for when and how employers must pay their employees.

Under the IWPCA, employers must pay employees all wages earned by them, including overtime pay, within three days of the regular payday for the pay period in which the wages were earned. This means that if an employee worked overtime in a pay period, they should receive their overtime pay within three days of the regular payday for that period.

Illinois employees who don't receive their wages on time can file a complaint with the Illinois Department of Labor, which can help resolve the issue.

In Illinois, the Wage Payment and Collection Act (IWPCA) governs the payment of wages to employees. The IWPCA applies to all employers and employees in the state, including those in local government and school districts, but not to the Illinois or Federal governments.

To be covered under the IWPCA, an employee must perform their work in Illinois. The law defines an employer broadly, including management employees who act in the interest of the employer in relation to an employee.

An employee is defined as any individual permitted to work by an employer in an occupation, but excludes independent contractors. To determine whether an individual is an independent contractor, a detailed legal analysis is required.

The IWPCA defines wages as compensation owed to an employee by an employer, whether determined by time, task, piece, or other basis of calculation. Payments to separated employees are termed "final compensation" and include wages, salaries, earned commissions, earned bonuses, and the monetary equivalent of earned vacation and earned holidays.

Employers must notify employees of their rate of pay and time and place of payment at the time of hiring. Wages must be paid at least semi-monthly, with the payment made no later than 13 days after the end of the pay period in which the wages were earned.

Employers cannot change an employee's rate of compensation or rate of pay without first notifying the employee before the effective date of the change. Employers also cannot stiff separated employees by refusing to pay their final compensation.

Here are the key employer duties under the IWPCA:

If an employer fails to pay wages, final compensation, or wage supplements, an employee can file a claim with the Illinois Department of Labor or file a civil action, but not both. If an employee files an administrative complaint, they cannot file a lawsuit against their employer for unpaid wages.

Illinois has specific laws regarding minimum wage and overtime pay. The Illinois Minimum Wage Law requires employers to pay nonexempt employees at least $11.00 per hour, with an increase to $12.00 per hour from January 1, 2022, through December 31, 2022.

Tipped employees must be paid at least $6.60 per hour, which will increase to $7.20 per hour on January 1, 2022. Overtime pay is also required for employees who work over 40 hours in a workweek.

Employers must pay employees overtime at a rate of 1 1/2 times their regular hourly rate for every hour worked over 40 hours in a workweek. Some employees may be exempt from overtime pay, but this depends on specific exemptions under the IMWL.

You can find more information about Illinois minimum wage and overtime laws, including exemptions and charts, by clicking here and here.

If your employer fails to pay you on time, you have two options: file a claim with the Illinois Department of Labor or file a lawsuit in court. However, you can't do both.

You're entitled to recover the amount of any underpayments, plus damages of 5% of the amount for each month it remains unpaid. This means if your employer owes you $1,000 and it's been a month since they were supposed to pay, you're entitled to $1,000 plus an additional $50 in damages.

If you choose to file a lawsuit, you may also be able to recover costs and attorney's fees from your employer. This can help offset the expenses of taking them to court.

Filing a complaint with the Illinois Department of Labor is a good option if you're not sure if you want to go to court. However, keep in mind that if you file a complaint, you can't also file a lawsuit.

If you do decide to file a lawsuit, make sure you do it within three years of the underpayment. This is the deadline set by law.

Employers who retaliate against employees for exercising their rights under the law can face serious consequences. This includes being held liable for violating Illinois law and potentially facing lawsuits from their employees.