Wage & Hour Law in Illinois

In the U.S., there are labor laws that focus on the rights and restrictions of individuals working in the country. Among the most important of these laws are the ‘Wage & Hour’ laws created by the federal Fair Labor Standards Act (FLSA). Wage & Hour laws fall in the category of individual labor laws and their primary objective is to regulate the wage rates an employee working in the States is entitled to and the work hours for which he or she must be compensated by their employer.

Like all other states, the state of Illinois has implemented its own set of Wage & Hour laws supplementing federal laws that create some basic wage and hour protections for most employees who work in Illinois. The protections offered from the Wage & Hour law in Illinois are beyond the general U.S. standards as outlined in the FLSA.

If you are looking for more information on Wage & Hour law in the great state of Illinois, you have come to the right place. Throughout this feature, we will go into the different legal codes that come under the Wage & Hour laws in Illinois as well as their key requirements and notable exceptions.

The minimum wage simply refers to the lowest hourly rate employers are legally allowed to pay their employees.

In the state of Illinois, the minimum amount an employee must be compensated for an hour of work is $8.25 (IL Statute 820-105/4). The federal minimum wage sets the minimum amount required by all employers in the United States with four (4) or more non-family employees to pay their employees. Should the federal minimum wage and that of a state be of differing values, employers of that state must pay the minimum that is most beneficial to their employees. Being that the Illinois minimum wage is higher than the federal minimum wage, which is set at $7.25 per hour (part of the Fair Labor Standards Act); all employers in Illinois must pay a wage of no less than $8.25 an hour to all employees.

That being said, various positions and types of workers may be exempt from Illinois’ minimum wage law. These are stipulated by the experience and condition of the employee.

• Tipped employees: Employees can be exempted from the standard minimum wage rate if a sizable portion of their earnings is derived from gratuities. (IL Statutes 820-105/4(c)) If exempt, a lower minimum wage rate of $4.95 per hour applies to tipped employees who receive no less than twenty dollars ($20) a month in tips on a regular basis — or if the total amount they earn (hourly wages plus tips) equals or exceeds the federal minimum wage rate. (IL Admin. Code 210.110)
• Learners: An employer may pay learners or newly hired employees – who have been involved in training programs – a subminimum wage rate that is no less than seventy percent (70%) of the standard minimum wage rate, but only for the first six (6) months of employment. (IL Statutes 820-105/6(c) and IL Statutes 820-105/6(d))
• Employees with disabilities: Employees with disabilities that can have an impact on the production capacity of the workplace are also exempt from the standard minimum wage. However, an employer, if licensed from the Illinois Department of Labor, may pay an employee with disabilities a subminimum wage rate based on the individual employee’s earning or productive capacity. (IL Adm. Code 210.500)
• Students: A full-time student, if qualified as student learner, can be paid no less than seventy percent (70%) of the standard minimum wage rate. (IL Admin. Code 210.110 and IL Admin. Code 210.640)

Overtime pay is an integral part of the United States work culture. It refers to the compensation an employee receives for the time he or she works beyond the standard working hours.

The right to overtime pay is a key right that Illinois wage and hour law provides to employees. Despite the fact that the federal law does not place a limit on the hours an employee is required to work in a day or week, employees are entitled to be compensated for the hours they do work. In Illinois, an employee is entitled to overtime pay if they have worked in excess of forty (40) hours in the course of a single workweek. The work week must be seven (7) consecutive days, beginning and ending on the same day of the week for the duration of the employment. For employees, these overtime hours must be compensated at one and a half times (1 ½) their regular rate of hourly pay. (29 CFR 778.107)

For instance, if an employee is making $14.50 an hour and working in excess of forty (40) hours a week would be paid all overtime work done at a rate of $21.75 [14.50 x 1.5] an hour. Calculating the overtime pay rate for a salaried worker is a bit more challenging than that of employees who are paid on an hourly basis. As an illustration, assume that a qualifying employee makes $32,000 a year. So, to calculate their overtime pay rate, the employer will first need to divide their yearly salary by 52 (the number of weeks in one calendar year) to determine their weekly salary. [32,000/52 = $615.38] Next, the weekly salary has to be divided by 40 to determine the hourly salary. [615.38/40 = $15.38] After that, the hourly wage has to be divided by two. [15.38/2 = $7.69] Lastly, the above quotient needs to be added to the employee’s hourly rate. [15.38 + 7.69 = $23.07] In the case above, any hours that the employee works in excess of 40 per week should be compensated by the employer at a rate of $23.07 an hour.

It is important to note that Illinois exempts several types of employees from the overtime pay requirements. (IL Comp. Stat. Ch. 820 Sec. 105/4a) An employee is considered exempt from receiving overtime pay if he or she meets at least one of the following conditions:

• They manage the entire business as the primary duty,
• They supervise at least two full-time employees,
• They have the authority to hire, discipline, promote and fire employees,
• They exercise independent business judgment, and
• They spend at least fifty (50%) of their time doing the above

Moreover, there are other preconditions that exempt employees from receiving overtime pay. Illinois state law specifies these in more detail. In general, these exemptions fall in three categories: Administrative exemption, executive exemption, and professional exemption.

• Administrative Exemption: To be in the category of the administrative exemption, the employee must perform office or non-manual work or work in school management. Administrative employees must also regularly exercise discretion and independent judgment in important matters. For instance, planners and department store buyers may be examples of administrative employees. Although clerical work is considered "administrative", most secretaries are entitled to overtime pay. Filing, answering phone calls, gathering reports and making travel plans are not considered high-level job tasks. As a result, secretaries performing these job tasks do not meet the provisions of the administrative exemption. Additionally, although many secretaries exercise judgment in their positions, this level of judgment must be compared to the importance of the entire business. For instance, choosing the supplies for the office would not typically be considered an important matter when comparing this job task with those of others in the company.
• Executive Exemption: To meet the executive exemption, the worker must regularly direct no less than two employees, manage the business or a unit of the company, and have the authority to recruit and dismiss employees. If an assistant manager and a manager are always on duty simultaneously, the manager is considered to be the person "in charge." Therefore, many assistant managers are eligible for overtime pay when working more than forty (40) hours a week.
• Professional Exemption: To be considered a professional, the employee must perform a job requiring comprehensive knowledge and skills in the area of learning sciences. Professional employees typically have a specialized academic degree in their field. An individual whose occupation necessitates originality and imagination in an artistic or creative field would also fall under the professional exemption. Examples of professional employees include teachers, lawyers, doctors, musicians and scientists.
• In addition to the three main overtime exemptions, those engaged in outside sales (sales made away from the worksite) cannot receive overtime pay. In addition, some computer employees may be exempt from overtime pay. However, systems engineers, computer operators, junior programmers, and technical writers, as well as computer professionals who make, repair or maintain computer hardware are generally eligible for overtime compensation.

It is important to take into account that employers are obliged to pay overtime by the next payroll period, following the time in which the overtime wages were incurred. Moreover, employees cannot waive their overtime rights, and employers can make employees work overtime, assuming that they pay them overtime as well. If employees refuse to work overtime when requested by employers, employers are allowed to discipline the employees. Lastly, if an employee does not work in excess of forty (40) hours in a week, he or she is not entitled to overtime payment, regardless of whether they work no less than eight (8) hours in one day or if they work on weekends or even a federal or state holiday.

So, how can an employer calculate the overtime pay owed to an employee with an accuracy? In that case, the employer must first determine the employee’s regular rate of pay (more on that later) and hours worked by the employee in the applicable time period.

An employee’s regular rate of pay is nothing but the rate at which they are compensated for all non-overtime hours worked in a week. It also includes any compensation (wages, commissions, bonuses, etc.) provided to the employee in the applicable week. (29 CFR 778.108, 29 USC 207(e) and Walling v. Youngeman-Reynolds Hardwood Co., 325 U.S. 419 (1945))

• Hourly Rate and Salaried Employees – If an employee is compensated on an hourly basis or with a monthly/yearly salary, their regular rate is simply their wage rate for the hours they work. If they work in excess of forty (40) hours in the course of a single workweek, they are qualified for an overtime pay rate that is one and a half (1 ½) times their established wage rate. (29 CFR 778 110(a)) Calculating overtime pay rate for hourly rate and salaried employees has already been mentioned earlier.
• Pieceworkers – If an employee is compensated on not an hourly basis, but on the basis of accomplishing a particular assignment, their regular rate is typically the compensation paid to them in the workweek divided by the number of hours the employee actually worked. In order to determine the overtime pay owed to a pieceworker, all that the employer needs to do is multiply the total number of overtime hours worked by the said employee by half (1/2) their regular pay rate. (29 CFR 778.111 (a))
• Day and job rate employees – If an employee is paid a flat rate per work day regardless of the hours they work, their regular rate is simply the compensation paid to them in the applicable workweek divided by the hours the employee actually worked. (29 CFR 778.112)
• Wages paid with alternatives to cash – If, instead of cash, an employee is paid with goods or benefits, their regular pay rate is simply the aggregate of the market values of their goods or benefits and their cash wages. (29 CFR 778.116)
• Employees being paid two or more rates – If an employee is paid different pay rates in the course of a single work week, their regular rate can be determined by dividing the sum total of their pay rates for the week by the total number of hours they actually worked. (29 CFR 778.115)

One Day Rest in Seven Act or ODRISA is an Illinois law that entitles employees, with the exception of part-time workers who do not work more than twenty (20) hours during the work week and workers needed for an emergency, to at least twenty four (24) hours of rest every week. (820 ILCS 140/2 and IL Dept. of Labor FAQs) That being said, an employer may choose to not provide their employees with one day rest, assuming they have obtained a permit for it. (56 Ill. Adm. Code 220.200)

Meal or break rest refers to regularly scheduled time off taken by employees to grab lunch or take rest during their work hours. These periods are generally considered a standard perk at most workplaces and yet FLSA does not oblige employers to provide their employees with meal or rest breaks during the work hours.

Illinois is one of several states with specific state law regarding the subject of meal breaks. Even though the Illinois Law does not entitle employees to paid meal or rest breaks, they do entitle employees to paid short rest breaks throughout the day (five (5) minutes to twenty (20) minutes). In Illinois, employers are not required to provide paid meal breaks to their employees, but they are required to provide unpaid meal breaks of no less than twenty (20) minutes to employees who work at least seven and a half (7 ½) continuous hours. These breaks are given no later than five (5) hours after the employees’ work hours begin. However, employees under a collective bargaining agreement and those who monitor individuals with mental impairments are exempt from this law. (820 ILCS 140/3)

The only employees entitled to paid meals breaks in Illinois are hotel room attendants – those who put guest rooms in order and clean them. Hotel room attendants, if they work no less than seven hours during a work day, are also entitled to two (2) paid rest breaks of fifteen (15) minutes each.

A vacation leave refers to a pre-approved paid absence from work that an employee can use for any personal reason(s), typically for going out on a vacation.

In Illinois, an employer is not obliged to provide its employees with either paid or unpaid vacation benefits. On the other hand, an employer must pay vacation benefits to an employee if there is an established vacation and personal leave policy or an individual employment contract in place. (820 ILCS 115/2) If there is indeed a vacation policy in place, the employee must be fully compensated for all accrued vacation days that they have not used from the employer upon separation from employment. (820 ILCS 115/5 and 56 Ill. Adm. Code 300.520) The only exceptions to this rule would be part-time employees or union workers on a collective bargaining agreement. (820 ILCS 115/5)

According to the Employee Sick Leave Act (Public Act 99-0841), sick leave is defined as a work absence due to personal illness, injury or medical appointment that an employee can take to stay home to attend to their health and safety needs without losing pay. An employee can also take sick leave to adequately address the health and safety needs of their child, partner, sibling, parent, in-law, grandchild, grandparent or stepparent.

In Illinois, employers are not obliged to offer either paid or unpaid sick leave benefits to their employees. On the other hand, the Family and Medical Leave Act (FMLA) states that an employer with more than fifty (50) employees must give an employee no more than twelve (12) weeks of unpaid sick leave if the employee:

• Has worked for the employer for at least twelve (12) months; and
• Has worked at least twelve hundred and fifty (1,250) hours during the twelve (12) months.

According to the FMLA, a qualifying employee is entitled to sick leave for:

• Birth and care of a child, or placement for adoption or foster care of a child;
• Care of an immediate family member (a spouse, child or parent) who has a serious health condition;
• Care of the employee’s own serious health condition which renders them unable to perform the essential functions of their job.

Holiday leave refers to a leave taken by employees on a federal or public holiday.

In Illinois, private-sector employers are not obliged to recognize any of the holidays, whether state or federal, or provide paid or unpaid leaves to their employees for any holiday. Additionally, there is no law that requires employees to be rewarded with any premium wage rates for working on the official holidays. On the other hand, if an employer chooses to voluntarily grant time off to their employees on any public or state holiday or pay premium wage rates to employees working on those days, they must act in accordance with a prior holiday leave policy or employment contract established. (IL Dept. of Labor Holiday FAQs)

A jury leave refers to a paid or unpaid time off given to an employee when they are obliged to serve on juries or have been duly summoned to report to jury duty.

Under Illinois Law, all employees, provided they give reasonable notice in no more than ten (10) days of their jury summons, are entitled time off from work to serve on a jury in court, irrespective of the work hours to which they are assigned. On the other hand, employers are not required to compensate the employee for the time they spend acting as a member of a jury. (Illinois Stat. 705 ILCS 305/4.1) The law also states that the absence of an employee due to jury duty must not be met with the said employee being fired, disciplined, or otherwise penalized by the employer. Any employer who violates the law can be found guilty for the contempt of court. (IL Comp. Stat. Ch. 705 Sec. 310/10.1(b))

A voting leave simply refers to the time off allotted to an employee by their employer to cast their vote on the day of a primary or general election.

Under the Illinois Law, every employee who is a registered voter, after giving reasonable notice prior to the day of the election, is entitled to up to two (2) hours off work to cast their ballots. However, an employee is not permitted time off to vote if their work hours commence no less than two (2) hours after the polls open and end no less than two hours (2) before the polls close. (Illinois Stat. 10 ILCS 5/17-15)

If an employee has recently lost someone close, typically an immediate family member or a close relative, they may be granted some time off by their employer. This time off is also known as bereavement leave and is usually taken by the employee to grieve, make funeral arrangements, attend the funeral, take care of any other immediate post-death duties and/or spend time with other family members.

Neither Federal nor the Illinois Law binds employers to have a bereavement leave or grievance pay policy in place. Despite that, employers, at their discretion, may voluntarily choose to provide paid or unpaid time off to their employees and, in certain circumstances, may be obliged to conform to any established policy or practice that may be a part of individual employment agreements.

When an employee retires or is laid off, resigns or even fired, he or she may be entitled to a cash payment from their employer together with all wages due, unused vacation pay as well as commissions and bonuses still owed to them. The payment they receive is called severance pay, which can be offered by the employer as a lump sum or by means of regular pay periods for a specified duration.

Under Illinois labor laws, employers are not required to offer layoff or severance benefits to their employees, regardless of why their employment is terminated. On the other hand, if there is a specific provision for a severance package in the employment agreement or if there is a history of the employer offering severance pay to other employees in the same position, the employee is lawfully entitled to severance pay upon termination of employment. (5 ILCS 415/10)

Illinois wage and hour laws are applicable to all employees working in the state of Illinois, except:

• Independent contractors: Specialized workers who are paid for a specific project and maintain control over the means by which the project is being carried out as well.
• ‘Exempt’ employees under the Illinois Law: Some employees are exempt from the federal and Illinois wage and hour law requirements for minimum wages and overtime pay. Some of these may include: highly compensated employees – such as executive workers, administrative workers and professional workers, workers who engage in creative jobs – such as music, writing, painting and acting, outside salespeople, computer employees, seasonal employees, local newspaper staff, workers on foreign vessels and casual babysitters.

As an employee working in the state of Illinois, you have the legal right to compensation if your employer:

• Fails to pay you the minimum wage,
• Fails to pay you the overtime you have earned,
• Does not provide you with meal and/or rest breaks,
• Does not provide you with a mandated day off, and
• Misclassifies you as an independent contractor or an ‘exempt’ employee

In this case, you can take your employer to the court under the Illinois Labor Code for the compensation owed, back pay and back wages, interest on the amount owed and the litigation costs as well.

No matter what industry you work in – whether financial services or commissions sales, if you suspect that your employer is violating or has violated Federal and/or Illinois Wage & Hour laws, we, here at Bellas & Wachowski Attorneys at Law, can help you stand up to the unfair compensation practices at your workplace. With more than forty years of experience, legal expertise, talent and an abundance of resources, we can provide you with quality representation throughout your employment claim.

We can assess your legal rights and:

• Explain what laws work best for you and how to enforce your right,
• Advise you on the merits of your claim,
• Give you feedback on court procedures,
• Alert you to any problem areas,
• Suggest evidence that may be useful to your claim;
• And draft or write the necessary paperwork.

We will also deal with all levels of negotiation for your claims and represent you in standing up to your employer. If no form of settlement works for you, we can figure out what is the best next step for you – which may include filing a Wage & Hour lawsuit in Illinois court or joining an Illinois Wage & Hour class action.

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