Illinois Wage Theft Laws: What It Is and How to Report It

The Illinois Wage Theft Law, under Section 12 of the Illinois Wage Payment and Collection Act (820 ILCS 115/1), prohibits employers from failing to pay employees their earned wages. This law affects all employees in Illinois, including those who work for private and public sector employers.

As of January 1, 2019, the law applies to all employers with at least one employee.

Definition and Structure

The Illinois Wage Theft Law is structured under Chapter 820 of the Illinois Compiled Statutes, specifically Section 115. The law sets a $1,000 threshold for damages, below which employees may not bring a claim. In plain terms, this means that employees who are owed less than $1,000 in back wages may not be able to recover under this law.

The law also adopts the “reasonable person” legal standard, which requires that employers act in good faith when paying their employees. This is where the law gets teeth, as employers who intentionally withhold wages may face penalties of up to $1,000 per violation, under Section 14 of the Act (820 ILCS 115/14).

In practice, this means that employers must keep accurate records of employee wages and hours worked, as required by Section 9 of the Act (820 ILCS 115/9), which mandates that employers maintain such records for at least 3 years.

Requirements and Thresholds

Small Employer Thresholds

Employers with fewer than 5 employees are exempt from certain provisions of the law, under Section 2 of the Act (820 ILCS 115/2). However, these employers are still required to pay their employees at least the minimum wage of $12 per hour, as set by Section 4 of the Illinois Minimum Wage Law (820 ILCS 105/4).

Small employers must also provide employees with a written notice of their wage rates and payment schedules, at least 7 days before the first day of work, as required by Section 10 of the Act (820 ILCS 115/10).

Medium Employer Thresholds

Employers with between 5 and 50 employees are subject to additional requirements, under Section 3 of the Act (820 ILCS 115/3). These employers must pay their employees at least $1,500 per month, and must also provide employees with a written notice of their wage rates and payment schedules, at least 14 days before the first day of work.

Medium employers are also required to maintain accurate records of employee wages and hours worked, as required by Section 9 of the Act (820 ILCS 115/9), for at least 5 years.

Large Employer Thresholds

Employers with more than 50 employees are subject to the most stringent requirements, under Section 4 of the Act (820 ILCS 115/4). These employers must pay their employees at least $3,000 per month, and must also provide employees with a written notice of their wage rates and payment schedules, at least 30 days before the first day of work.

Large employers are also required to maintain accurate records of employee wages and hours worked, as required by Section 9 of the Act (820 ILCS 115/9), for at least 7 years.

Legal Process

Employees who believe they have been victims of wage theft may file a complaint with the Illinois Department of Labor, within 3 years of the alleged violation, as set by Section 11 of the Act (820 ILCS 115/11). The Department will then investigate the complaint and may bring a claim against the employer in court.

The court may order the employer to pay back wages, as well as a penalty of up to $1,000 per violation, under Section 14 of the Act (820 ILCS 115/14). In plain terms, this means that employers who are found to have intentionally withheld wages may face significant fines.

Penalties and Consequences

Employers who are found to have violated the Illinois Wage Theft Law may face penalties of up to $1,000 per violation, under Section 14 of the Act (820 ILCS 115/14). In addition, employers may also be required to pay back wages, as well as interest on those wages, at a rate of 5% per year, as set by Section 12 of the Act (820 ILCS 115/12).

Employers who are found to have intentionally withheld wages may also face criminal charges, under Section 16 of the Act (820 ILCS 115/16), which carries a penalty of up to 1 year in jail and a fine of up to $2,500.

Comparison to Other States

Illinois is one of several states that have enacted wage theft laws, including California, New York, and Massachusetts. California’s law, for example, sets a $5,000 threshold for damages, while New York’s law sets a $10,000 threshold.

Massachusetts’ law, on the other hand, sets a $1,000 threshold, similar to Illinois. However, Massachusetts’ law also provides for more stringent penalties, including a penalty of up to $10,000 per violation.

Practical Steps and Enforcement

Employees who believe they have been victims of wage theft may contact the Illinois Department of Labor for assistance, within 30 days of the alleged violation. The Department will then investigate the complaint and may bring a claim against the employer in court.

The Illinois Department of Labor also provides resources and guidance to employers on how to comply with the law, including a model notice that employers can use to inform employees of their wage rates and payment schedules, as required by Section 10 of the Act (820 ILCS 115/10).

Recent Changes and Legislative Status

In 2020, the Illinois General Assembly passed Senate Bill 161, which amended the Illinois Wage Theft Law to provide for more stringent penalties for employers who intentionally withhold wages. The bill also increased the threshold for damages from $500 to $1,000.

The law is currently enforced by the Illinois Department of Labor, which has the authority to investigate complaints and bring claims against employers in court. As of 2022, the Department has recovered over $1 million in back wages for employees who were victims of wage theft.

The Illinois Wage Theft Law is subject to change, and employers and employees should stay up-to-date on the latest developments and amendments to the law, which may include changes to the $1,000 threshold for damages or the $1,000 penalty per violation, under Section 14 of the Act (820 ILCS 115/14).