Illinois Wage Payment and Collection Act
The Illinois Wage Payment and Collection Act governs when Illinois employers must pay employee wages and commissions, prohibits most deductions from employee pay, requires notice for changes in pay and provides for employee rights to vacation pay upon separation.
Prompt Payment of Illinois Wages
The Illinois Wage Payment and Collection Act requires Illinois employers to pay all wages earned at least semi-monthly and no later than 13 days after the end of the pay period in which the wages were earned. However, employers may pay the wages of executive, administrative and professional employees, as defined in the Fair Labor Standards Act of 1938, once per month. Illinois employers must pay commissions once per month.
Reduction in Pay
Illinois employers can reduce employee pay, but only if they notify employees of the change prior to performing the work and the wage remains above the minimum wage.
Final pay for Separated Employees
Illinois employers must pay all final compensation of separated employees by the next regularly scheduled payday. Final compensation includes bonus payments, vacation pay, wages and commissions.
Vacation, Severance and Sick Pay
The Illinois Wage Payment and Collection Act does not require employers to provide vacation pay. If the employer chooses to adopt a vacation policy, however, a former employee has a claim under the Illinois Wage Payment and Collection Act for the collection of the monetary equivalent of his/her accrued vacation at the time of separation.
An employer does not have an obligation to pay severance pay, holiday pay or sick pay unless it agrees to do so by contract. An Illinois employer does not have an obligation to pay accumulated sick pay to separated employees.
Deductions from Wages
Illinois employers cannot make deductions from pay, except for deductions:
- required by law (such as taxes);
- to the benefit of the employee (such as health insurance premiums, union dues etc.);
- valid wage assignment or wage deduction order is in effect; or
- made with the express written consent of the employee, given freely at the time the deduction is made.
Illinois employers must provide each employee with an itemized statement of deductions for each pay period.
An employer cannot withhold wages pending the return of company uniforms, tools, pagers, or other equipment. Similarly, an employer may not deduct money from an employee to pay for:
- cash or inventory shortages or
- damages to the employer’s equipment or property
unless the employee signs an express written agreement allowing the deductions at the time the deduction is made.
Form of Payment
An employer must pay each of its employees his/her wages in a form that s/he may readily convert into cash (without the need of a personal bank account), unless an employee volunteers to be paid by direct deposit in an account at a bank or financial institution of his/her choice. Illinois employers may pay wages or final compensation in cash, by check or by direct deposit.
Filing a Claim
The Illinois Wage Payment and Collection Act allows employees to file a claim with the wage claims division of the Illinois Department of Labor for unpaid wages or final pay. An employee must file his/her wage/final compensation complaint with the Department within one (1) year after such wages or final compensation were due.
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