Starting on January 1, 2011, employers in Illinois will be subjected to harsher penalties under state law for failure to pay wages due to employees. The amendment to the Illinois Wage Payment and Collection Act, which is being referred to as the “Wage Theft Enforcement Act,” will also make it easier for employees to bring claims for unpaid or late wages before the Illinois Department of Labor or in court.

Specifically, the new Act makes the willful failure to pay wages a Class A or B misdemeanor, depending on the amount of the wages, and makes repeated violations a Class 4 felony. Further, the Act provides for employees to collect interest on unpaid wages at a rate of 2% per month for the entire time the wages are unpaid. Additionally, although the previous law already prohibited retaliation against an employee for exercising his or her rights under the Act, the amendment now provides for an employee’s recovery of costs and attorneys’ fees in a retaliation claim brought in court.

To avoid being on the receiving end of these harsh penalties, all employers should review their wage payment practices to make sure that employees are paid on time and in full, and that terminated employees receive all final compensation due within the time period prescribed by the Act.

To discuss these or other employment laws, contact Laura A. Balson or Margaret A. Gisch.