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Applebee's Learns an Expensive Lesson About Earned Vacation

Former Illinois employees of the popular restaurant chain Applebee's will receive restitution for earned but unused vacation time as part of a $650,000 settlement agreement announced in March. The settlement agreement will cover approximately 5,200 workers who left Applebee's between 2003 and 2013 and were not paid for earned vacation time as part of their final pay. Naturally, this settlement provides a valuable lesson to Illinois employers at Applebee's expense. With that in mind, here are a few key takeaways for employers:

1. There is no state or federal law that requires employers to offer paid vacation time off. That said, it is common for employers to offer this benefit.

2. If an employer does offer paid vacation time off, Illinois law comes into play. Specifically, under the Illinois Wage Payment and Collection Act (IWPCA), employers must pay employees for any earned and unused vacation time at the end of their employment as part of the employees' final pay.

3. The statute of limitations period for an IWPCA claim is ten years. This is why the plaintiffs' claims in this particular case covered the ten-year time period from 2003 to 2013.

4. Plaintiffs can bring unpaid wage claims, as well as similar unpaid overtime or minimum wage claims, and class action claims. Class action claims can expand an employer's liability.

5. Litigation is expensive. The plaintiffs filed this claim in 2003. The attorneys' fees in this case, which spanned four years, had to have been gigantic.

Applebee's settlement provides a stern warning to all employers that wage and hour claims can be very expensive. Illinois employers should ensure that they are in full compliance with the IWPCA as well as Illinois' Minimum Wage Law.

If you have any questions or concerns about this topic, please call Ryan Young of Wessels Sherman's Chicago, Illinois office at (312) 629-9300 or contact him via email at ryyoung@wesselssherman.com.

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