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Governor Quinn Signs Wage Theft Bill

Governor Pat Quinn talks about Wage Theft Bill

On July 30, Governor Pat Quinn signed a bill into law that increases protections for Illinois workers who are not paid the wages they have earned. Senate Bill 3568 Wage Payment and Collection Act Amendment strengthens the rights of Illinois workers who have been victims of wage theft.

Local 881 was a strong advocate in the passage of this legislation. You may be wondering what wage theft means. Wage theft is the illegal underpayment or non-payment of workers’ wages. Some common examples of wage theft include: not paying earned overtime, forcing workers to work off the clock, workers not receiving their final paychecks or earned vacation pay, or misclassification of workers.

The new law amends existing state law to help thousands of Illinois workers recover unpaid wages more quickly. Workers will now be able to take alleged violations directly to the state circuit court and collect all costs and reasonable attorney’s fees. The Illinois Department of Labor (IDOL) will also establish a streamlined process to resolve small claims. For the first time ever, employees will be allowed to file class action lawsuits against employers. Additionally, workers will be protected from retaliation for reporting alleged violations in public forums.

The Illinois General Assembly sent the bill to the Governor’s desk after overwhelmingly passing it during the Spring legislative session; the Senate vote was 56-0, while the House vote was 112-1. Illinois’ legislative action follows a growing number of states and counties enacting wage enforcement laws to address the crime of wage theft by employers. Nationwide, legislators are responding to research highlighting the severe toll wage theft takes not only on workers, but also on local economies and state and municipal tax rolls.

A recent study by the University of Illinois at Chicago’s Center for Urban Economic Development underscored the negative impact of wage theft on workers in Chicago and suburban Cook County, as well as the economy overall. Nearly half (47 percent) of the 1,140 local workers surveyed experienced at least one pay-related violation in the previous work week. The average worker lost $50, out of average weekly earnings of $322. That translates into wage theft of 16 percent of earnings. Assuming a full-time, full-year work schedule, the study estimates that these workers lost an average of $2,595 annually due to workplace violations, out of total earnings of $16,753. The study further approximates an average of 146,300 cases of wage theft each week—resulting in about $7.3 million each week in unpaid wages, or $380 million per year.

The study revealed that violations are rampant in several categories, including: worker compensation, earned tips, Pay stub itemization and illegal deductions, off the clock work, minimum wage, and overtime. However, another significant concern was raised regarding illegal employer retaliation. According to the study, when workers complain about their working conditions or try to organize a Union, employers often responded by retaliating against them. For example, employers fired or suspended workers, threatened to call immigration authorities, or threatened to cut workers’ hours or pay. Just as important, many workers never made complaints in the first place because they feared retaliation by their employer.

This study highlighted exactly why this legislation is so important. Too many unscrupulous employers were being allowed to cheat employees out of earned pay, without fear of any consequences. Local 881 members have the benefit of their Union contract in place to outline specific negotiated wage rates and other provisions. Plus, if a violation is suspected, the Union is always there to investigate and fight on your behalf.

That isn’t the case at non-union companies. In 2008, for example, Walmart announced it would settle 63 cases in 42 states charging that the company forced its employees to work "off the clock"—that is, requiring unpaid work after employees had clocked out at the end of their official shifts. The settlement totaled $352 million in unpaid wages and involved hundreds of thousands of current and former employees.

Upon signing the bill into law, Governor Quinn stated, "Illinois workers deserve every penny they have earned, on-time and in-full. This legislation will help Illinois workers recover unpaid wages faster and will further crack down on wage theft throughout our state." The amended Act takes effect January 1, 2011. Sources: www.state.il.us/agency/idol; www.urbaneconomy.org