Apr 02, 2014

New Illinois labor statutes demand compliance from employers

A new year brings new resolutions. This is no different for the Illinois legislature, which passed laws making several changes to Illinois employment and labor statutes effective as of January 1, 2014.

The first set of amendments impact the Illinois Wage Payment and Collection Act (Wage Act), which is designed to facilitate the collection of earned compensation by employees. Section 115/11 of the Wage Act has been amended by Public Act 098-0527 to provide that all claims, regardless of amount, will be heard through formal hearing processes within the Illinois Department of Labor (IDOL). The IDOL will have the power to “adjudicate claims and to issue final and binding administrative decisions …” This is a significant procedural change to the law, which previously allowed the IDOL only to conduct “investigatory hearings” on claims in excess of $3,000, and did not allow the IDOL to adjudicate or issue final decisions regarding such claims. The administrative fees applicable to awards under the Wage Act have also been amended.

Another amendment is to the Employee Classification Act (ECA), which was enacted in 2008. The purpose of the ECA is to ensure that employees of the construction industry enjoy the benefits of Illinois labor laws by establishing a presumption that an individual who performs services for a construction contractor is an employee unless specified criteria are met. The amendment to the ECA allows for a formal hearing process to take place for investigations by the IDOL and will add a personal liability clause for employers who knowingly violate the Act. In addition, Section 185/43 concerning reporting requirements has been added to the ECA to provide that any contractors who employ persons performing construction work and not classified as an employee, must report to the IDOL on or before January 31 following the taxable year in which the payment was made. Failure to report can result in civil penalties. The first reporting period covers calendar year 2014 and the first report is due by January 31, 2015.

These are just two of the many changes in Illinois labor laws that took effect January 1, 2014. If you have questions regarding these changes, contact Ryan Haas, and he will walk you through the newly implemented amendments.

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.

Client Alert authored by: Ryan A. Haas