Background
The City of Chicago has enacted a wage theft ordinance that prohibits employers from committing theft in the form of nonpayment of wages and paid time off. Wages are defined as earnings including salary or compensation for work provided as well as paid time off that is accrued as a result of working a specified number of hours.
Summary
An employee alleging a violation of this law may submit a claim through the Office of Labor Standards or a civil action. The employer may then be liable for underpayments and damages of either:
- 2% of the total amount of underpayment for each month the wages go unpaid or
- Amount stated in the state wage payment law (whichever is greater)
The law also requires employers to provide domestic workers with a contract that includes specified wages and work schedules.
Record Retention
Employers must retain the following records for five years or for the duration of a pending claim, investigation, or civil action:
- Employee’s name and address
- Hours worked
- Pay rate
- Wage agreement
- Any other records to demonstrate compliance
Employers that violate the terms of the ordinance are subject to fines between $500 and $1,000 for each offense, and an employee may file a civil suit for any alleged violations.
Employers Next Steps
- Employers must post a notice that includes employee rights under the wage theft provisions.
- Employers should monitor the Office of Labor Standards (OLS) website for an updated version of the workplace posting.
- If you are a Full-Service or Virtual HR client and would like our assistance with updating your policy, please email us.
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This content is provided with the understanding that HR Knowledge is not rendering legal advice. While every effort is made to provide current information, the law changes regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable laws in your jurisdiction and consult experienced counsel for legal advice. If you have any questions regarding this content, please contact HR Knowledge at 508.339.1300 or email us.
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