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Illinois Strengthens Ability of Employees and Department of Labor to Seek Unpaid Wages

  • August 10, 2006

On July 14, 2006, Illinois amended both its Minimum Wage Law and its Wage Payment and Collection Act to increase the power of both employees and the Illinois Department of Labor to seek unpaid wages from employers.

Under these amendments, the IDOL is now able to subpoena witnesses, books, payroll records, and other evidence relating to its investigations.  Employers who fail to comply with these subpoenas are subject to contempt-of-court proceedings.  The amendments also streamline the process by which the IDOL can recover a 20% underpayment penalty against employers who violate minimum wage or overtime requirements willfully, repeatedly, or with reckless disregard for the law.

The Minimum Wage Law was further amended to clarify employees' right to seek punitive damages against employers.  The MWL allows an employee either to assign his claim to the IDOL or file a private lawsuit on his own behalf, and a 2005 court decision interpreted the MWL to bar employees from recovering punitive damages in such private lawsuits.  The amended MWL now explicitly provides that employees can recover punitive damages (two percent of any unpaid wages for each month they remain unpaid) in private lawsuits.  In other words, employers can now be liable for punitive damages in all suits under the MWL, regardless of who brings the suit.

Finally, the Wage Payment and Collection Act was amended to penalize employers who ignore an IDOL demand to pay wages.  The penalty is one percent of the unpaid wages per day, beginning fifteen days after the IDOL makes its demand, and capped at 200% of the total unpaid wages.

These amendments to the MWL and WPCA, which are effective immediately, underscore the importance of compliance with Illinois wage laws for all employers.  Jackson Lewis attorneys are available to assist employers in understanding the changes to these laws and avoiding exposure to their newly-strengthened penalties. 

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