In Illinois, failure to pay employee wages when they are due is a crime. On July 30, the Illinois Wage Theft Enforcement Act went into effect. The new law increases criminal penalties for violations of the Wage Payment and Collection Act, making willful failure to pay wages due under the Act a Class B misdemeanor for amounts of $5,000 or less, and a Class A misdemeanor for larger amounts. Repeat offenses within two years of a prior criminal conviction under the Act are now a Class 4 felony.

The new law also provides civil enforcement mechanisms. Employees may now pursue wage claims in court directly, either as an individual or in class actions, without filing a complaint with the Department of Labor. Employees who prevail on a wage claim may recover attorneys’ fees and costs, as well as damages at a rate of 2% of the amount of any unpaid wages for each month that the wages remain unpaid. The new law also allows the Illinois Department of Labor to set up a system for directly adjudicating small wage claims of up to $3,000. Employees who claim they have been subjected to retaliation for complaining about nonpayment of wages may file a complaint with the Department of Labor or a civil lawsuit and may recover costs and attorneys’ fees.

If an employer is ordered by the Illinois Department of Labor or a court to pay wages, it must pay a non-waivable administrative fee of $250. Additionally, if the employer fails to comply with or file a timely appeal of a wage payment demand or order, the employer must pay a penalty of 20% of the amount of the order to the Illinois Department of Labor, plus an additional 1% of the amount owing per calendar day to the employee. Fees and penalties collected by the Illinois Department of Labor under this provision are to be placed in a Wage Theft Enforcement Fund, for use in enforcing the Wage Payment and Collection Act.

If you have any questions regarding compliance with the law, do not hesitate to contact your employment counsel at Smith, Gambrell & Russell, LLP.