SMITHAMUNDSEN’S LABOR & EMPLOYMENT GROUP HELPS SHAPE NEW LAWS IMPACTING ILLINOIS EMPLOYERS
SmithAmundsen's Labor & Employment Practice Group continues to be on the cutting-edge of local, state, and federal statutory developments. Although many firms do an excellent job of keeping accurate tabs on the latest legislative changes, few are actually part of that process. Through our connections in Springfield, we are regularly called upon to provide input and guidance on proposed workplace regulations impacting small, medium, and large employers throughout Illinois. Over the years, our collective insight has helped shape key statutory changes in Illinois labor and employment laws. For the most part, our "voice" has been able to diminish, if not prevent, fundamentally anti-business legislation. Our clients and friends understand that a majority of this legislation has been aimed at interfering with management's ability to effectively manage and/or has served as a great distraction for employers trying to focus on expanding the private sector and creating jobs. At times, however, the proposed legislative changes are not necessarily negative on the surface; and we ensure that is indeed the case. We are proud of our track record in this regard, and we are committed in continuing to look out for employers' best interests. With this in mind, we would like to inform you of three (3) employment related laws recently signed by Governor Quinn. The first substantially penalizes employers for failing to pay wages to workers, the second is designed to expand leave entitlements for military family members, and the third limits most employers from conducting credit checks.
ILLINOIS' WAGE PAYMENT & COLLECTION ACT AIMS TO PENALIZE EMPLOYERS
Senate Bill 3568 strengthens the rights of Illinois workers who have been victims of alleged wage theft at the hands of their employers. The bill makes both first and repeat wage violations more serious crimes. Civil and criminal penalties for purported wage violations will increase under the new law, and repeat offenders can face up to three years in prison. Workers will now be better able to take alleged violations directly to the state circuit court and collect all costs and reasonable attorney’s fees. The Illinois Department of Labor (IDOL) will also establish a streamlined process to resolve small claims (although those "wrinkles" have yet to be "ironed out"). For the first time ever, employees will be expressly allowed to file class action lawsuits against employers. Additionally, workers will be protected from retaliation for reporting alleged violations in public forums. The amendments are effective January 1, 2011.
Under Senate Bill 3568, if the IDOL determines that an employer has committed wage theft, the employer will suffer a severe penalty and will be ordered to pay a hefty fine even if the employer believed it was acting in compliance with the law (aka the Illinois Wage Payment and Collection Act). Jeffrey Risch, Partner and Chair of SmithAmundsen's Labor & Employment Practice Group, worked with proponents of the legislation in Springfield and successfully lobbied to provide employers the opportunity to exhaust any and all rights to appeal any adverse IDOL decision prior to any automatic penalty or fine. He further argued and insisted that the Illinois Wage Payment & Collection Act should focus on preventing wage theft and should be aimed at penalizing only willful violations.
SB 3568’s Most Practical & Immediate Impact? It’s still too early to tell just what sort of impact these modifications will have on an Illinois employer. However, our experience and insight tells us that many employers will be instantaneously impacted by Senate Bill 3568 as many continue a custom and practice of withholding final wages or earned income to employees who owe their employer money, property, equipment, etc. This often used (and quite effective) tactic has always been outlawed, but there was no real teeth deterring it. There’s little doubt that Senate Bill 3568 now provides employees (and their lawyers) a better avenue to go after employers who withhold wages under any circumstance.
ILLINOIS' FAMILY MILITARY LEAVE ACT EXPANDS SCOPE & COVERAGE - BUT ACKNOWLEDGES THE FMLA’S MILITARY LEAVE PROVISIONS
Senate Bill 3818 amends the Illinois Family Military Leave Act to include adult children and grandparents of individuals called to military service as eligible for the same leave provided to spouses and parents. Under the new law, certain employers will be required to provide up to 15 or 30 days of unpaid family military leave to a worker when their spouse, child, parent, or grandchild is being deployed for a period of more than 30 days. The changes are effective January 1, 2011. In effect, grandparents and children of military personnel now have leave rights under the law. The changes do not impact the thresholds of coverage as employers employing between 15 – 50 employees must still provide up to 15 days of unpaid leave while employers with over 50 employees must still provide up to 30 days of unpaid leave.
Jeffrey Risch advised key lobbyists that these leave rights should not exceed the protection afforded under the federal Family Medical Leave Act (FMLA). Therefore, if an employee receives leave under the Illinois Family Military Leave Act, the employee's rights should not be greater than the rights provided through the FMLA (as applicable under the circumstances). This is a significant development in the law, as the prior Illinois Family Military Leave Act required employers to offer such leave benefits only after all other leave benefits (i.e. the FMLA) were first exhausted rather than offering both concurrently. This was due primarily because Illinois’ original Family Military Leave Act was created prior to the FMLA amendments that included military leave components.
Thanks to SmithAmundsen, the Illinois Chamber of Commerce, and cooperation from the bill’s proponents, special attention was given to the legislation to specifically add language stating that the number of days of leave provided to an employee because the employee's spouse or child is called to military service shall be reduced by the number of days of leave provided to the employee under specified provisions of the FMLA because of any qualifying exigency arising out of the fact that the employee's spouse or child is on covered active duty (or has been notified of an impending call or order to covered active duty). Therefore, employers may, only as applicable, exhaust both Illinois Family Military Leave Act benefits concurrently with the FMLA.
NEW ILLINOIS LAW LIMITS MOST EMPLOYERS FROM CONDUCTING CREDIT CHECKS
House Bill 4658, sponsored by Rep. Jack Franks (D-Woodstock) and Sen. Don Harmon (D-Oak Park), creates the Employee Credit Privacy Act. Under this new law, Illinois employers may not use a person’s credit history in the employment context (i.e. to determine whether to extend an employment offer, terminate employment, provide a promotion, or determine compensation levels). The new law forbids most employers from inquiring about an applicant or employee’s credit history or obtaining a copy of their credit report. Employers who violate the new law can be subject to civil liability for damages and/or injunctive relief. The law takes effect on January 1, 2011.
SmithAmundsen was called to comment about HB 4658 when it was first proposed and noted that special attention needed to be made to broaden what types of employers may be exempt from the Act's requirements and/or under what circumstances may an employer still be allowed to conduct lawful credit checks amongst applicants or employees. Ultimately, HB 4658 was revised to carve out special exemptions for specific employers. These exempt employers include banks, credit unions, insurance companies, and sureties pursuant to the Illinois Insurance Code, state law enforcement agencies, state or local government agencies that require the use of an applicant's or employee's credit history and debt collection agencies pursuant to federal or state law.
Additionally, the final version of HB 4658 provides that employers who are not specifically exempt from the law may still access credit checks under limited circumstances, where positions involve: bonding or security per federal or state law; unsupervised access to more than $2,500 in marketable assets; signatory power over business assets of more than $100; management and control of the business; access to personal, financial or confidential information, trade secrets, or state or national security information.
Recently, Jeffrey Risch appeared on WFLD-TV Fox News Chicago to discuss HB 4658 and the topic of employers conducting credit checks in the hiring process. Specifically, Jeffrey discussed how he encourages clients to complete a credit check, especially those filling high level and financial positions. To view the segment, please click here. Rep. Franks (D) also appeared and commented.
If you have any questions regarding this legislation, your responsibilities, and/or how this affects your workplace, please contact Jeffrey Risch.