Tuesday, May 26, 2015


The Illinois Department of Labor has passed new regulations concerning the administration of the Wage Payment and Collection Act.  Under the new regulations, an employer is required to notify an employee of his rate of pay in writing at the time of hiring.  Written notice is also required each time a change in the time, amount, or method of payment is made.  The employee’s continued employment is not regarded as consent to any modification that was not the subject of a written notification to the employee prior to the change, although an employee is presumed to have consented to the change if he continues to work after being notified in writing of the change.

The regulations also provide that no employee can be required to enroll in a direct deposit arrangement unless the employee voluntarily accepts the arrangement and voluntarily designates a financial institution as the recipient of direct deposits.  Many employers now require direct deposit, and some collective bargaining agreements provide for payment by direct deposit.  It is unclear, however, whether the prohibition by administrative regulation of involuntary direct deposit arrangements can stand in the face of direct deposit that is mandated or authorized by a collective bargaining agreement entered into pursuant to the Illinois Public Labor Relations Act.

Finally, the new regulations require employers to make and maintain, for not less than three years, time and pay records regarding their employees.  For each employee, records must include: name and address, hours worked each day of the work week; rate of pay, copies of all notices given to the employee concerning his initial rate of pay and any changes in time, amount, or method of payment, the amount paid each pay period, and all deductions made from wages or final compensation.  Also employers that provide paid vacations must maintain, also for three years, records of the number of vacation days earned each year and the dates on which vacation days were taken and paid.  Significantly, these records must be maintained for exempt (executive, administrative, professional) employees as well as non-exempt employees.

The burden to keep and maintain accurate records is placed squarely on the employer.  Thus, the regulations state:

In the absence of employer records, a claimant may not be denied recovery of wages or final compensation on the basis that the employee is unable to prove the precise extent of uncompensated work or final compensation.  An employee need only produce sufficient evidence to demonstrate the amount and extent of work or time earned as a just and reasonable inference.  The employer must then produce evidence of the exact amount of work or time earned or produce evidence to negate the reasonable inferences drawn from the employee’s evidence.  The employer’s failure to make and maintain records as required under subsection (a) shall not preclude a finding based on the information available that wages or final compensation are due, even though the award may be only approximate. 

While the federal Fair Labor Standards Act for many years has required employers to maintain adequate time and pay records, many employers, especially small employers, use informal, inexact, and irregular methods of keeping time and pay records.  With these changes in the rules governing the administration of the Wage Payment and Collection Act, employers are given even greater incentive not only to keep accurate time and pay records but to mandate and require employees to follow sound timekeeping procedures.