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What are the penalties for wage and hour theft?

On Behalf of | Sep 20, 2021 | Wage & Hour Laws

The basic implication for labor is that we are paid for that labor. When we show up for our shift, we expect to be paid for that time within a reasonable amount of time. And, usually, ever week or two, we get a paycheck for the time we spend at our employers. But, what happens when we are not paid, i.e., wage and hour theft?

Notice

First, when an employer is found guilty of wage and hour theft, the Wage Payment and Collection Act sends the employer notice of their finding. The notice explains that the employer will be responsible for the unpaid wages, along with additional penalties.

Penalties

The amount owed by an employer that commits wage theft is the unpaid wages, plus 2% of that amount, calculated per month from the date of the underpayment throughout the entire time between that date the date of payment. There is no limitation to this amount that could be owed. It is owed until paid.

In addition, the Illinois Department of Labor or court can mandate the employer also pay a $250 non-waivable administrative fee, which increases to $500, if the amount is more than $3,000, and up to $1,000 for $10,000 or more.

IDOL could also impose an additional 20% penalty, which is calculated based on the underpayment, in addition to an additional 1% penalty to the employee. This 1% penalty is paid per day and is 1% of the underpayment, and this too accrues until paid and has no maximum.

Personal liability

Employers may believe that these penalties will be extracted from the business itself and that they are shielded from liability. After all, this is why most businesses are set up as some form of limited liability organization. However, IDOL could hold any officers or agents of the employer personally liable if they knowingly permitted the entity to commit wage theft. This means the payments to the employee and government could come out of those individuals personally.

Chicago, Illinois, business are on notice that our state takes wage and hour laws seriously. And, there are severe penalties to wage and hour theft.