The Illinois General Assembly has been busy, passing legislation that HR professionals need to know about. Specifically:
- The Employee Credit Privacy Act, which prohibits many Illinois employers from basing hiring, promotion and other employment decisions on the credit histories of employees and job applicants.
- The Wage Payment and Collection Act, which protects employees who have not been paid all their wages.
Both laws take effect on Jan. 1, 2011. Now is the time to familiarize yourself with these new mandates, before the hectic winter holidays and year-end HR bustle.
Employee Credit Privacy Act
This new law forbids employers from inquiring about or obtaining a copy of an applicant’s or employee’s credit history or credit report or using credit history in employment decisions.
Employers will still be permitted to conduct background checks on applicants and employees, as long as that check does not include a credit history or report.
The new law contains some exceptions. Employers can check a credit history if the employee involved will be working in a high-level managerial position. In addition, managers who have signatory power exceeding $100 or who have access to sensitive information such as trade secrets or personal information may have their credit history checked.
Essentially, if an employer can show that a good credit history is a bona fide occupational requirement, it can check that history. Otherwise, it cannot. Gone are the days that a poor credit history could block hiring if needed for jobs that don’t involve unsupervised access to cash or other assets.
Note: The law includes a major exception for jobs in banking, insurance, law enforcement or many public-sector positions. Presumably, lawmakers assumed that those kinds of jobs require employees uncompromised by serious financial or legal problems.
Check your employment policies and make the changes required to comply with the law.
Wage Payment and Collection Act
This law has been amended to make it easier for employees to collect wages unpaid. Employees who believe their employers owe them $3,000 or less will be able to file a claim with a new administrative office in the Illinois Department of Labor.
The amendments also allow employees to go directly to court if they don’t want to press their claims with the state Department of Labor. If they do, they can sue on behalf of a class of similarly situated employees.
There are also enhanced remedies for underpaid wage claims. Employees can collect 2% interest per month for unpaid wages, plus costs and attorneys’ fees. Employers aren’t allowed to retaliate against employees who report alleged unpaid wages.
Criminal classifications will be stiffer for those who willfully refuse to pay wages. Starting Jan. 1, withholding pay will be a Class B misdemeanor for amounts of $5,000 or less, and a Class A misdemeanor for amounts more than $5,000. A second offense within two years would be a Class 4 felony.
Review your wage payment policies to make sure they comply with existing Wage Payment and Collection Act provisions, such as the one that requires payment within 14 days.
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