Illinois Wage and Hour Law
Dolley Law has extensive knowledge and experience in wage and hour law. We have represented clients across the country, including in Illinois, in connection with these matters. Contact us if you are seeking legal representation in connection with a wage and hour matter.
Illinois Overtime Law
Interpretation of Illinois wage and hour laws and regulations are construed in accordance with the Fair Labor Standards Act (“FLSA”). See Ill. Admin. Code tit. 56 §§ 210.100, 210.120 (2005). Like the FLSA, Illinois law requires a minimum payment of 1.5 times an employee’s regular rate for every hour worked over 40 in a work week. 820 ILCS 105/4a.
The employees who are exempt from Illinois wage and hour laws are generally the same employees who are exempt from the FLSA. 820 ILCS 105/3, 29 U.S.C. § 213. However, the exemptions from Illinois wage and hour laws and the exemptions from the FLSA are not identical. For example, “highly compensated employees” who are exempt under the FLSA are not exempt under Illinois state overtime laws. 820 ILCS 105/3(d); 29 C.F.R. § 541.601.
Illinois law provides additional protections to employees that the FLSA does not. Every employer must allow an employee 24 consecutive hours of rest every calendar week. 820 ILCS 140/1(a). The employee may choose to work seven days in a row; however, it must be voluntary. 820 ILCS 140/2; Ill. Admin. Code tit. 56 § 220.125. There are also requirements for unpaid meal breaks; employers must permit an employee who works 7.5 consecutive hours to take at least a 20-minute meal break no later than five hours after they start work. 820 ILCS 140/3.
Illinois Minimum Wage Law
Illinois’ minimum wage is higher than the federal minimum wage. The minimum wage mandated by the FLSA is $7.25 per hour, whereas the minimum wage for Illinois, as of January 2020, is $9.25 hour. Like other states that have recently raised their minimum wage rate, the minimum wage in Illinois is planned to increase gradually each year until January of 2025. 820 ILCS 105/4(a)(1). On July 1, 2020, it will increase to $10 per hour; for the next five years, it will increase another dollar until it reaches $15 per hour on January 1, 2025. Id.
Like other states and the FLSA, Illinois recognizes certain special rules to paying employees at an hourly rate less than the minimum wage rate, provided certain conditions apply. These special rules apply to tipped workers, minors, and new hires. With respect to tipped employees, employers are authorized to reduce an employee’s hourly rate by up to 40% of the applicable minimum wage rate so long as the employee still makes a regular rate that is above the minimum wage when all tips are counted toward weekly compensation. Thus, for example, tipped employees must currently (as of June 2020) be paid at least $5.55 per hour, excluding their tips. See 820 ILCS 105/4(c). As the state minimum wage continues to increase, so will the rate for tipped employees. See 820 ILCS 105/4(c). In contrast, the federal minimum hourly rate for tipped employees is significantly lower: $2.13 per hour. 29 C.F.R. § 516.28 (2019).
Potential Wage and Hour Violations
Illinois’ wage and hour laws were recently amended in 2019 to impose more severe consequences for employers found to be in violation. Employers can be held liable for attorney’s fees, triple the amount of unpaid wages, and an additional 5% of the underpayments for each month following the date of payment during which the underpayments remain unpaid. 820 ILCS 105/12(a). If the violations are determined to be willful, repeated, or in reckless disregard of Illinois wage and hour law, then employers can be held liable by the Department of Labor for an additional 20% of the unpaid wages and a $1500 civil penalty. 820 ILCS 105/12(a).
Additionally, to ensure compliance, the Illinois Department of Labor is authorized to perform random audits of employers at reasonable times during normal business hours. 820 ILCS 105/7. Finally, employers who pay employees less than what is required can also be held criminally liable. 820 ILCS 105/11(b). And, for every week an employee is underpaid wages, the employer may be found guilty of an additional offense. Id.
In actions to recover unpaid overtime or minimum wages, the statute of limitations for wage and hour violations in Illinois is different than the FLSA. Minimum wage and overtime claims under federal law generally have a two-year statute of limitations, with an exception for a three-year statute of limitations if the violations are proven to be willful. 29 U.S.C. § 255(a). In Illinois, however, the statute of limitations is three years as general rule, without regard to employer willfulness. See 820 ILCS 105/12(a).
Wage Payment and Timing
Section 115 of Chapter 820 of the Illinois State Code, otherwise known as the Illinois Wage Payment and Collection Act (“IWPCA”), has additional protections for employees who are not paid wages in a timely manner. 820 ILCS 115. Wages are due to employees at least semi-monthly no later than 13 days after the end of the pay period. 820 ILCS 115/(3)-(4). If employees are paid on a weekly basis, the wages are due no later than 7 days after the end of the pay period. Id.
Additionally, Illinois law provides protections for agreements made through a contract between an employer and employee. 820 ILCS 115/5. When an employee resigns or is terminated, any vacation time accrued through an employment agreement but not used at the time the employee leaves should be paid out to the employee with the employee’s final compensation. 820 ILCS 115/5.
Employers who do not pay employees on time or do not pay employees what they are legally due are subject to additional liabilities and civil penalties. 820 ILCS 115/14. For each month following the date the payment was due, employers must pay the employee an additional 2% of the underpayments and damages; if an employee prevails in a civil action to recover these unpaid or underpaid wages, the employer must also cover the employee’s attorney’s fees. 820 ILCS 115/14(a). There are also criminal repercussions if an employer willfully violates the IWPCA. 820 ILCS 115/14.
Section 13 of the IWPCA imposes personal liability on officers or agents of an employer who knowingly violated the wage payment laws. Andrews v. Kowa Printing Corp., 838 N.E.2d 894, 899 (Ill. 2005); 820 ILCS 115/13. For an owner or officer to be held individually liable for the wages, the individual must have both knowledge of the compensation agreement and have knowingly permitted the corporation to wrongly deny some amount of compensation. Spaulding v. Abbott Laboratories, No. 10 C 199, 2010 WL 4822894, at 6 (N.D. Ill. Nov. 22, 2010).
Our Firm represents clients in FLSA and wage and hour cases in courts throughout the United States. We can help answer questions regarding compliance with state and federal regulations, prevailing wage laws, recordkeeping requirements, and exemptions to requirements. If you are in or around Cook, DuPage, Lake, Will, Kane, McHenry, Winnebago, Madison, St. Clair, or Champaign counties, please feel free to contact our attorneys directly to discuss a wage and hour issue at 314-645-4100 or by email at [email protected]