Amendments to the Illinois Wage Payment and Collection Act (IWPCA) setting forth new pay stub requirements for employers take effect on January 1, 2025. Here are the highlights.


What Is a “Pay Stub.”


The IWPCA now specifically defines a “pay stub” as an itemized statement reflecting an employee’s:
• hours worked
• rate of pay
• overtime pay
• overtime hours worked
• gross wages earned
• deductions made from the employee’s wages
• total wages and deductions for the year


New Employer Pay Stub Obligations.


The IWPCA now requires employers to:
• Provide an electronic or physical pay stub containing the above information to employees each pay period.
• Maintain copies of employees’ pay stubs for at least three years after the date of payment, even if the employment relationship ends before the three-year period has run.
• Provide a current or former employee copies of his or her pay stubs within 21 days of that employee’s request.


Notably, if an employer furnishes electronic pay stubs in a manner that does not allow a former employee to access them for at least a full year after separation, the employer must (1) offer to provide a record of all pay stubs from the year preceding the date of separation by the end of the outgoing employee’s final pay period; and (2) maintain a written record of the date on which its offer was made and how the employee responded.


Limits on Employee Pay Stub Requests.


An employee’s right to request pay stub copies is not unlimited under the IWPCA:
• An employer may require that requests for copies of pay stubs be submitted in writing.
• An employer is not required to grant a current or former employee’s request more than twice in a 12-month period.
• An employer is not required to grant a former employee’s request more than one year after the date of separation.


Potential Penalties.


An employer who fails to comply with the IWPCA may be subject to a civil penalty of up to $500 per violation. Such penalties are in addition to any damages or attorney’s fees and costs for other wage-related violations of the IWPCA.
The amendments do not specify whether individual employees have a private right of action for a violation of the new pay stub requirements. Nor do the amendments specify whether the civil penalties may be enforced retroactively.


Next Steps for Employers.


By January 1, 2025, Illinois employers should, at minimum:
• Ensure pay stubs contain all required information.
• Train payroll personnel to effectively respond to employee pay stub requests.
• Verify that recordkeeping procedures comply with the three-year retention period.
• Verify whether pay stubs provided electronically may be accessed by former employees for one year after separation, and if not, establish a process for offering them to employees upon separation.


If you have any questions about the topics discussed in this article, please contact James P. Looby at jlooby@vedderprice.com, Michael D. Considine at mconsidine@vedderprice.com or any Vedder Price attorney with whom you have worked.

Holding Paycheck

Under the Illinois Wage Payment and Collection Act (IWPCA), an employee may file suit for compensation owed “pursuant to an employment contract or agreement.”  820 ILCS 115/2. Courts have taken different approaches regarding what constitutes an agreement under the IWPCA, and prior to October 2024, the Seventh Circuit had not opined as to whether boilerplate disclaimer language in an incentive compensation plan prevents an agreement under the IWPCA from ever being formed. 

But, on October 4, 2024, the U.S. Court of Appeals for the Seventh Circuit weighed in.  As held in Case No. 23-3209 the Court found that “boilerplate disclaimer language” in an incentive compensation plan does not prevent the formation of an “agreement” between an employee and his employer for purposes of a claim under the IWPCA.  Santanu Das v. Tata Consultancy Services Ltd., No. 23-3209(7th Cir. 2024). This decision is significant because it puts Illinois employers on notice that employees may have a claim for unpaid compensation under the IWPCA even if the employer expressly disclaims that it ever agreed to pay such compensation.

To learn more about the decision and how it may affect your company, please read the full article here.

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