The Illinois Wage Payment and Collection Act (ILWPCA) establishes how and when an employer must pay their employees’ wages and commissions. It also prohibits employers from most deductions in an employee’s paycheck and requires the employer to notify the employee, in advance, of changes in pay.
Payment of Wages
The ILWPCA requires that all Illinois employers must pay their employees the wages that they’ve earned at least semi-monthly and no later than 13 days after the end of a pay period. An employer may pay wages once a month to employees who are executives, administrative and professional employees (as defined under the FLSA).
Reduction in Pay
An employer can reduce an employee’s pay rate but the employee must be notified of the change prior to performing any work for the employer. The reduction cannot be lower than minimum wage.
Final Pay
An employee that has been terminated or has resigned must receive their compensation for wages earned by the next regularly scheduled payday. In addition to wages, final pay includes bonuses, vacation pay and commissions.
Vacation, Severance and Sick Pay
Under the Illinois Wage Payment and Collection Act, an Illinois employer is not required to provide vacation pay. However, if the employer does provide vacation pay, a former employee is entitled to be paid the monetary equivalent of the accrued vacation at the time of their separation from the employer.
Sick pay, severance pay and holiday pay are also discretionary. The employer does not have to pay accumulated sick pay to the separated employee.
Deductions from Wages
An Illinois employer cannot make any deductions from an employee’s paycheck with the following exceptions:
• Payroll taxes
• Premiums for health insurance, union dues or any benefit of the employee
• Court ordered wage garnishments
• Or any deduction made with the express written consent of the employee.
The employee must receive an itemized statement each pay period.
Unless express written agreement allowing deductions is given by the employee at the time the deduction is made, an employer cannot deduct wages for the following:
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