Practice Areas

Test Your Knowledge - April 2012

April 2012

By: Jennifer Adams Murphy, Esq. and Ryan L. Young, Esq.

Fact of the Month

An employer found to have violated the Illinois Wage Payment & Collection Act ("IWPCA") will be liable not only for wages and payments recovered in a civil action, but also for the claimant's reasonable costs and attorney fees. In addition, an employer or agent of an employer who "willfully refuses to pay as provided in the [IWPCA], or falsely denies the amount of validity [of a claim]" is guilty of a misdemeanor, and if found to have engaged in the willful conduct twice within two years is guilty of a Class 4 felony.

Test Your Knowledge!

(see answers below)

Illinois Wage Payment & Collection Act ("IWPCA")

1. Items that can be deducted from paychecks without written authorization include:

a. repayment of cash loans

b. cost of uniforms

c. cash shortage reimbursements

d. cost of company cell phone dropped in toilet

e. all of the above

f. none of the above

2. An at-will employer must notify employees in writing at the time of hire of their rate of pay and time and place of payment.

a. true

b. false

3. Where sick pay is included in earned paid time off ("PTO"), unused earned PTO does not have to be paid out upon termination.

a. true

b. false

4. If an employer accidentally overpays an employee and the employee agrees that an overpayment has been made, the employer:

a. cannot under any circumstances recover the overpayment under the "finders keepers" doctrine.

b. can deduct the full amount of the overpayment from the first regular paycheck following the discovery.

c. can recover only 15% of the overpayment from each paycheck.

Answers to Test Your Knowledge

1. f (none of the above). See 56 Ill. Adm. Code §300.720 et seq.

2. a (true). See 820 ILCS 115/10. Section 10 of the Illinois Wage Payment & Collection Act provides that "whenever possible" at the time of hiring, notification of "rate of pay and of the time and place for payment" shall be in writing.

3. b (false). Employees have the right to take earned paid time off for any purpose (unlike traditional sick leave, which use is contingent upon illness). Unused earned paid time off must be paid as earned vacation time upon termination.

4. b and c are both correct depending on the circumstances - pursuant to 56 Ill. Adm. Code §300.900, "when the employee agrees that an overpayment has been made, the entire sum of the overpayment may be deduced on the employee's first regular payday subsequent to the payday on which the overpayment occurred." If the employer does not make the deduction on the next regular payday, the overpayment is treated as a cash advance repayment and the repayment terms must be set forth in a written agreement and cannot exceed 15% of the employee's gross wages per paycheck. See 56 Ill. Adm. Code §300.750; §300.800; §300.930. Fortunately, the "finders keepers" rule applies only to the playground and not in the workplace!