Wage Payment and Collection Act Penalties
Notice To Employers
An employer who is found to have violated the Wage Payment and Collection Act is liable not only for the amount of any unpaid wages or final compensation owed to an employee but also for:
damages equal to 5% of the underpayment, per month (calculated from the date of the underpayment) for each month during which wages or final compensation remain unpaid. Damages are payable to the employee and continue to accrue, without limitation, until the amount found owing is paid.
In addition, any employer who has been demanded or ordered by Illinois Department of Labor (IDOL) (or ordered by a court) to pay wages or final compensation to an employee must also pay:
a $250 non-waivable administrative fee to IDOL. This fee increases to $500 if the amount ordered by the Department is more than $3,000, and $1,000 for orders of $10,000 or more. (Note: This fee will not be assessed if the claim is paid prior to the issuance of a demand or order.)
Furthermore, any employer who fails to timely comply with a demand or final order issued by IDOL shall also be liable for:
a penalty, payable to IDOL, equal to 20% of the underpayment;
and a penalty, payable to the employee, equal to 1% per day of the underpayment, for each day that payment is delayed. Again, this penalty continues to accrue without limitation until the amount found owing is paid.
Lastly, be advised that:
in addition to an individual who is deemed to be an employer under the Act, any officers of a corporation or agents of an employer who knowingly permit such employer to violate the Act shall be personally liable for an employee’s unpaid wages or final compensation and any fees or penalties assessed.
An employee files a claim with IDOL on March 1, 2015 seeking $1000 in wages that were due, but not paid, on February 15, 2015. A demand issues from IDOL on June 15, 2015 in the amount sought. If the employer pays within 35 days (that is, by July 20, 2015), the employer is required to pay for a total of $1450 ($1200 to the employee and $250 to IDOL) calculated as follows:
- $1000 in wages to the employee;
- $200 in damages to the employee (5% x $1000 x 4 months);
- a $250 administrative fee to IDOL
Note: For each month the employer fails to pay the amount found owing, 5% in statutory damages continues to accrue without limitation on a monthly basis.
In contrast, and by way of illustration, if the employer waits until August 15, 2015, (25 days after payment of the demand was due on July 20, 2015), the employer is required to pay a total of $2000 ($1550 to the employee and $450 to IDOL) calculated as follow:
$1000 in wages to the employee; and
plus $300 in damages to the employee (5% x $1000 x 6 months = $300); and
a $250 administrative fee to IDOL;
In addition, the following will be due:
- a penalty of $250 to the employee (1% of $1000 x 25 days); and
- plus a penalty of $200 to IDOL (20% x $1000 = $200)
Note: For each day the employer fails to pay the amount found owing, the 1% penalty continues to accrue without limitation on a daily basis until payment in full is made.
View the full details of the Illinois Wage Payment and Collection Act