By: Sean F. Darke, Esq.

As yet another year comes to an end, the General Assembly was busy creating or amending laws, some changes were good and some changes made no sense. But we have no choice but to follow. So as we reflect on 2011 and these changed laws, which new law or amendment changed the Illinois landscape and really requires Illinois companies to pay attention and take notice? The Illinois Wage Payment and Collection Act (IWPCA) was amended to include harsher fines and penalties, and started to be enforced back on January 1, 2011, but the majority of employers still do not know the ramifications.

As previously mentioned in the Client Alert, the IWPCA provides employers with guidelines as to the frequency of wages being paid and established when employees must receive their earned wages. The new amendment to the IWPCA provides severe consequences if a company fails to follow the law. The following is a recap of the IWPCA:

Civil and Criminal Penalties:

• Establishes a non-waivable administrative fee of $250 to employers found liable of owing wages to an employee.

• Establishes a 2% penalty of the unpaid wages due to the employee for each month of the underpayment. The penalty amount is payable to the employee.

• Increases the criminal penalty for repeat criminal violations from a misdemeanor to a felony.

• Increases the criminal penalty for cases $5,000 or less from a Class C misdemeanor to a Class B misdemeanor.

• Increases the criminal penalty for cases over $5,000 from a Class C misdemeanor to a Class A misdemeanor.

Enforcement Fund: Establishes the Wage Theft Enforcement Fund. All civil penalties and fees due to the State will be deposited in this Fund. The Fund can only be used for the enforcement of the IWPCA and will provide the Illinois Department of Labor with additional staff and resources.

Employer Definition: Clarifies the Act's definition of "employer" so that it is consistent with the Illinois Minimum Wage Law and the federal Fair Labor Standards Act. Further, officers of a corporation or agents of an employer who knowingly permit the "employer" to violate the law are personally liable under the Act.

New Adjudicative Process for Small Claims: Provides the Illinois Department of Labor with the authority to establish a new adjudicative process for claims or specific categories of claims under $3,000, including instances where an employer fails to timely respond to a notice of claim issued by the Illinois Department of Labor. The new process will result in an enforceable order at the Department level. This authority is subject to appropriation by the Illinois General Assembly.

Private Right of Action: Clarifies the Act's private right of action language to make clear that one or more employees may file an action in the county where the alleged violation took place or where an employee who is party to the action resides. The employee(s) does not need to file a claim with the Illinois Department of Labor first to file a private right of action. Additionally, the amendment allows the employee to recover costs and all reasonable attorneys' fees.

Retaliation: Provides for a private right of action for an employee who has been unlawfully retaliated against, with the ability to collect all costs and reasonable attorneys' fees.

In addition to the new amendments, the IWPCA provides a section that creates PERSONAL LIABILITY against the officers, Presidents, etc. Typically, Owners, Officers, Vice Presidents, or Presidents are protected by the corporate shield when making business decisions, but the IWPCA eliminates that protection! Illinois companies must start paying attention to these amendments before it's too late.