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More Penalties for Employers - Non-Payment of Wages

December 2010

By: Walter J. Liszka, Esq.

Even though the State of Illinois is currently experiencing massive difficulties with regard to its state budget, the Illinois lawmakers - while not dealing head-on with the budget crisis - have seen fit to put additional measures into place under the Illinois Wage Payment and Collection Act (IWPCA) that expose employers to greater potential liability, both from a financial standpoint and potential criminal penalties.

Through an amendment of the State Finance Act, beginning on January 1, 2011, the Illinois Department of Labor (IDOL) has now been authorized to adjudicate and issue binding decisions regarding any unpaid wage claim up to $3,000 that has been filed with the Department (820 ILCS 115/11). The Director of Labor is authorized and granted the authority to create rules and regulations in compliance with these new powers of adjudication and issue binding decisions regarding these claims. It should be noted that this "new authority" also includes potential liabilities for an employer who fails to respond to a notice of claim issued by the IDOL.

Furthermore, by amending a specific section of the IWPCA (820 ILCS 115/14), the legislature has empowered employees who are the alleged victims of a violation of the IWPCA to file a legal action (without filing any claim with the IDOL) in the Circuit Courts of the State of Illinois where the alleged offense occurred or where an employee resides. The employee will also have the right to extend this action not only on behalf of himself/herself, but also on behalf of other aggrieved employees. The legislators have seen fit to make it possible for employees to receive damages up to 2% of the amount of any and all underpayment of wages, final compensation of wage, or wage supplements for each month that the owed monies remain unpaid. It also should be clearly understood that an employee who initiates court action may be entitled to reasonable costs and reasonable attorneys' fees.

Additionally, employers who fail to pay monies may be found guilty of a Class B Misdemeanor if the amount claimed is $5,000.00 or less. If the amount were to exceed $5,000.00, employers could be found guilty of a Class A Misdemeanor. It should be noted that each day the compensation is alleged to be remaining due and owing would be considered as a separate offense. If an employer is found to commit a succeeding violation of the Act within a two year period of time from a prior conviction of an offense under the IWPCA, the employer would be guilty of a Class 4 Felony.

If an employer is, in fact, ordered by the IDOL or the court to pay wages due to an employee, the employer will also be held responsible to pay a $250.00 non-waivable administrative fee to the IDOL.

If an employer refuses to pay within 15 calendar days of a demand made under the IWPCA or, in the alternative, within 35 calendar days of an administrative order issued by the IDOL or a court order, the employer will be responsible to pay to the IDOL a fee of 20% of the total amount owed and will also owe a 1% penalty per calendar day of the total amount alleged to be due and owing to the involved employee who's denied payment.

Obviously, the potential costs and liabilities to an employer for non-payment of wages have been substantially increased. While in the past some employers have chosen to ignore claims made to the IDOL, that option is no longer available. It is respectfully suggested by the writer of this article that all employers heighten their interest in dealing with matters arising under the IWPCA so the employer does not find itself in a situation of paying additional fees and/or exposing itself and/or its agents to potential criminal liabilities.

Contact any Wessels Sherman attorney to discuss questions regarding this subject.