The Lifting Up Illinois Working Families Act (Public Act 101-0001) was signed into law on February 19, 2019.  We know this bill begins with an increase to the minimum wage to $9.25 per hour beginning January 1, 2020 with the final goal of $15.00 by January 2025. There are additional employer requirements that are already effective included within the Act that we will provide here in this alert.

NEW ENFORCEMENT PROVISIONS

Employee Underpayments

There are additional enforcement provisions within the Act that became effective immediately upon passing of the Act.  Employers should be aware of these amended and in some cases new provisions.

For underpayment of wages, the following enforcement provisions have been increased:

An employee may recover directly from the employer any such underpayment of wages.  The employer is liable for three times any such underpayment entitled to an employee together with costs and damages of 5% (up from 2%) of the amount of the underpayment for each month following the date of the underpayment where it remains unpaid. 

The Department of Labor may make a claim on behalf of any employee or by motion of the Director.  The employer would be liable for up to 20% of the total underpayment where the employer’s conduct is proven to be willful or with reckless disregard of this Act.  The employer would be liable for an additional penalty of $1,500, payable to the Department’s Wage Theft Enforcement Fund.  Additionally, the employer would still be liable to the employee for damages of 5% (up from 2%) of the amount of the underpayment for each month following the date of the underpayment where it remains unpaid.

Illinois Wage and Payment Act

The Illinois Wage and Payment Act Section 300.630 Records and Notice Requirements, previously established that:

“(a) Regardless of an employee’s status as either an exempt administrative employee, executive or professional, every employer shall make and maintain, for a period of not less than 3 years, the following true and accurate records for each employee: the name and address, the hours worked each day in each work week, the rate of pay, copies of all notices provided to the employee as required by subsection (d), the amount paid each pay period and all deductions made from wages or final compensation…”  (Source: Illinois General Assembly Website)

The Illinois Wage and Payment Act required employers to keep records on all of their employees, exempt and non-exempt.  This regulation did not have any monetary penalties attached to it; however, employers were still required to comply.

The new Lifting Up Illinois Working Families Act still maintains that employers have always been responsible for keeping accurate records of their employees; however, the Act has now established a penalty to the employer of $100 per affected employee.  The $100 penalty would be payable to the Department’s Wage Theft Enforcement Fund. 

The record-keeping requirements are in regards to employee employment records, and are not pay stub specific. The record-keeping requirements are:

Employee name

Address

Occupation

Rate of pay

Amount paid each pay period

Hours worked each day in each work week

and such other information as the Director (ILDOL) may by regulation prescribe as necessary or appropriate for the enforcement of the provisions of this Act

As a provision of this Act, the Director has authorized representatives to “Make random audits of employers in any industry subject to this Act to determine compliance with this Act.

WHAT DO EMPLOYERS NEED TO DO?

Paylocity highly recommends you review your current employee record-keeping processes and procedures to ensure they are in compliance. Although the record-keeping requirements have always been in place; effective February 19, 2019, the monetary penalties associated with those requirements are now enforceable.

Thank you for choosing Paylocity as your Payroll Tax partner.

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.