On August 22, 2014, significant changes to the Illinois Wage Payment and Collection Act (IWPCA) regulations became effective. The IWPCA is an Illinois law with a ten-year statute of limitations that governs the payment of wages, deduction from wages and payment of vacation, commissions and bonuses. The changes now require employers to give employees written notice of their rate of pay at the beginning of their employment and any time the rate of pay changes. The regulations also expanded the scope of the IWPCA to enforce “promises” contained in employee handbooks, despite contract disclaimers to the contrary. Employers who pay employees in cash must obtain a signed receipt from the employee including the date and amount received. In addition, employers are now required to reimburse employees for business expenses incurred by employees, and commissions may now need to be paid to terminated employees, although employers may deduct advanced commissions from compensation if the sale is canceled. Moreover, employers may be required to pay severance if the employer has a “practice” of paying severance. The changes also significantly expanded the Illinois Department of Labor’s (IDOL) enforcement authority. For example, the IDOL now has jurisdiction over non-resident corporate officers of a company, and over any employee who performed work within Illinois, even if the employer does not have a physical office in Illinois. Additionally, the IDOL now can “assist” a “class” of employees alleging IWPCA violations, and investigate retaliation complaints. The foregoing are only highlights of the significant changes to the regulations implementing the IWPCA. Employers should make sure to thoroughly review all of the changes to determine whether changes in existing policies or practices are needed.
