Formal contract not necessary for employee to bring wage claim under IWPCA — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Formal contract not necessary for employee to bring wage claim under IWPCA

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in Human Resources

Under the Illinois Wage Payment and Collection Act (IWPCA), employees can sue their employers if they believe they are owed money, including promised commissions and the like.

The law doesn’t require that the money owed be promised in a binding, written contract. Instead, all the employees have to show is that there was an agreement to pay out the money.

Recent case: Guy Martino sued MCI Communications, claiming he had not been paid all the commission the company had promised him. The company told the court that there was no written contract—and in fact, the company’s commission plan specifically stated that it was not a contract.

The court said it didn’t matter that there was no formal contract. All the IWPCA requires is that the employee can prove there was an agreement to pay the money. In this case, the court said the disclaimer in the compensation plan was broad enough to prove there was no agreement. Martino lost his case. (Martino v. MCI Communications, No. 08-C-4811, ND IL, 2008)

Final note: An agreement, under Illinois law, requires that two parties show they assent to an arrangement. This is tricky. Consult your attorney when drafting bonus or commission plans. A lawyer can word it to minimize the chances the plan will become either a contract or an agreement, and can also help you draft disclaimer language for your handbook, applications and other employee guides.

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