Illinois Laws on Wage Payment and Deductions

November 21, 2018

By Associate Attorney Bianca Saviano

Numerous questions surround the subject of payment of wages and deductions, especially in the event of a separation from employment. The Illinois Wage Payment and Collection Act (“IWPCA”) establishes laws for payment of wages, final compensation and the deductions that an employer can make from an employee’s wages. The IWPCA covers private employers and units of local government.

Employers covered by the IWPCA are required to pay all wages earned at least semi-monthly and wages are to be paid no later than 13 days after the end of the pay period in which the wages were earned. Wages of executive, administrative and professional employees (as defined in the Federal Fair Labor Standards Act of 1939) may be paid once a month. Similarly, commissions may be paid once per month. (820 ILCS 115/3-4).

In the event of separation from employment, all final compensation, including bonus payment, vacation pay, wages and commissions must be paid on what would be the employee’s next regularly scheduled pay day. (820 ILCS 115/5).  Although, an employee is not entitled to severance pay, sick pay or holiday upon separation, unless the employer has promised the pay in an employment contract or other agreement. (820 ILCS 115/2).

An employer may make certain deductions from your pay, but the law mandates that each employee shall be furnished with an itemized statement of deductions for each pay period. Deductions may be made (1) when required by law, (2) to the benefit of the employee, (3) a valid wage assignment or wage deduction order in effect, or (4) with the express written consent of the employee, given at the time the deduction is made. However, an employer cannot withhold or deduct from wages pending the return of uniforms, tools, pagers or other employer owned equipment. (56 Ill. Adm. Code 300.830). Furthermore, an employer may not deduct money from your pay for cash or inventory shortages or damages to the employer’s equipment or property unless you sign an express written agreement allowing deductions at the time the deduction is made. (56 Ill. Adm. Code 300.730; 56 Ill. Adm. Code 300.820).

If you have questions regarding payment of your wages or deductions, please call Illinois Advocates today.

"Wages and deductions must be handled correctly because they can greatly affect a worker's livelihood.  Call an attorney at our offices if you have any questions," says Joseph Coli, Partner at Illinois Advocates.

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Chicago, IL 60602

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Fax: 312-492-4804