Corporate Officer Liability Under The Illinois Wage Payment And Collection Act

The Illinois’ Wage Payment and Collection Act, 820 ILCS 115/1 et seq. (the “Act”) offers an unpaid employee strong recourse against his former employer.

Not only can a corporate employer be liable under the Act to the employee claimant, but so can the individual corporate officer in some cases. See Act, ss. 2, 13.

The Act also outlaws employer retaliation against an employee who makes a claims under the Act.

Section 5 of the Act requires an employer to pay a separated employee final compensation no later than the next regularly scheduled payday.

The Act defines “employer” variously as (1) any individual or business entity that acts directly or indirectly in the interest of an employer in relation to an employee and (2) an officer of a corporation or agents of an employer who knowingly permit the employer to violate the Act. 820 ILCS 115/2, 13.

Act Section 2 binds an employer not only for its own failure to pay employee wages but also for violations committed by its agents (i.e. supervisors).

Section 13 imposes personal liability on an officer or agent of an employer who knowingly permits an Act violation.

But Section 13 liability applies only to corporate “decision-makers” – corporate personnel who occupy supervisory positions and have a role in setting company policy and working conditions.

A corporate officer can defend a personal liability under the Act by showing he relied on corporate financial documents in failing to pay an employee.

Section 14 is the Act’s anti-retaliation section. It provides that an employee can recover damages where an employer “unlawfully retaliates” him. 820 ILCS 115/14(c).

Unlawful retaliation under the Act means an employer fired or discriminated against an employee who complained that he hasn’t been paid. A prime example of retaliation under the Act is where an employee makes a demand for unpaid compensation and is fired in response.

Our attorneys stand ready to assist with both prosecution and defense of any Wage Payment and Collection Act claims.