Understanding overtime regulations is necessary to guarantee that workers who put in extra time are compensated fairly.
According to federal and Illinois labor laws, non-exempt workers who surpass a 40-hour workweek receive an overtime rate of 1.5 times their typical pay rate. However, the Fair Labor Standards Act (FLSA) doesn’t demand overtime pay for weekend or holiday labor or regular days off.
This article will provide you with the information to successfully navigate Illinois’ overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.
This article covers:
- Illinois Overtime Rates
- Overtime Entitlement in Illinois
- “Compensatory Time” in Illinois
- Refusing to Work Overtime in Illinois
- One Day Rest in Seven Day Act (ODRISA) in Illinois
- Overtime Pay for Tipped Employees in Illinois
- Overtime for Salaried Employees in Illinois
- Calculating Illinois Overtime with Commission
- Statute of Limitations for Overtime Claims in Illinois
- Overtime Exceptions and Exemptions in Illinois
- Misclassifying Employees in Illinois
- Legal Cases Relating To Overtime Compensation in Illinois
The Illinois overtime legislation mandates that overtime in Illinois is set at 1.5 times the regular hourly wage for workers who exceed 40 hours a week.
Since the regular Illinois minimum wage is $14.00 per hour, Illinois’ overtime minimum wage is $21.00 per hour (one and a half times the minimum wage).
It’s worth noting that the federal Fair Labor Standards Act (FLSA) and the Illinois Overtime Law (also known as the Illinois Minimum Wage Law) are quite similar. However, there are some variances between them.
According to Illinois law, the law applies to any employer with one or more gainfully employed workers (the Federal Law mandates that the company, regardless of the total number of employees, have gross revenue of $500,000).
A distinct minimum salary is also required under Illinois law.
Illinois’ overtime law includes certain types of workers who meet the criteria for overtime pay and entitles them to receive overtime compensation for all hours worked beyond 40 in a week.
In general, hourly workers in non-exempt industries who make less than $684 per week ($35,568 annually) are entitled to overtime compensation.
You are likely covered by the overtime rules if your job requires manual labor (such as being a construction worker, a factory worker, a cashier, etc.).
Occasionally, instead of paying non-exempt workers extra for the hours worked beyond 40 per week, a compensatory time off policy, often known as a “comp time” policy, gives them compensated time off that they can use in the future.
Every hour worked overtime by an employee entitles them to get 1.5 paid hours off.
Only public employees are eligible to obtain “comp time” in lieu of overtime compensation in Illinois, as they do in other states. This practice is prohibited under the FLSA for all non-governmental businesses.
It is within your employer’s authority to demand that employees work overtime even with minimal advance notice. Additionally, neither state nor federal laws impose any restrictions on the maximum number of hours a standard employee can be compelled to work in Illinois.
Refusal to comply with such a request may result in termination or other forms of penalties imposed by your employer.
The One Day Rest in Seven Day Act establishes a 24-hour minimum resting period for employees in Illinois for every subsequent 7-day stretch. Any overtime compensations are applicable for hours worked over 40 if an employee has willingly chosen to do so.
Employees are also entitled to a meal break that lasts at least 20 minutes for every 7.5-hour shift. The meal break must start before the 5-hour mark of the shift. If an employee is to work for 12 hours or more, they are entitled to receive another 20 minutes break. If the employee happens to work through their meal break, they should also be compensated accordingly.
It is important to note that this act is only applicable to non-exempted employees.
When they work more than a certain amount of hours each week, the majority of tipped workers in Illinois are entitled to overtime compensation. Legally speaking, overtime hours pay time and a half of the employee’s regular hourly rate.
If a tipped worker goes overtime, their overtime wage is determined using the entire minimum wage rather than the lower cash wage that the company is paying them. Employers in Illinois are permitted under federal law to make a tip credit claim. However, overtime hours cannot be given a bigger tip credit by the employer than regular hours.
In Illinois, salary type does not qualify as an exception to the overtime laws. Unless expressly exempted, salaries, paid piece rates, fixed charges with variable hours, daily rates, and other forms of payment are nonetheless subject to overtime regulations. For each possible payment type, a separate calculation is made to determine when overtime is due and what the employee’s typical rate of pay is.
The usual exemption (in certain US states) for highly compensated workers who make more than $100,000 per year is not covered under Illinois overtime law. Even highly compensated workers may be eligible for overtime pay.
When determining an employee’s overtime pay, the normal rate of compensation must take into account commissions, non-discretionary bonuses, and any other additional payments that are directly related to the number of hours put in or the accomplishment of particular goals.
To calculate Illinois’ overtime wages that include commission:
Commissioned Workers’ Overtime Rate = half of the normal hourly rate
Normal rate = (total hours times hourly rate) plus the commission’s weeklong equivalent, divided by the number of hours in the workweek.
This means that if you work 45 hours at $10/hour and earn $40 in commission for the week, your total wage for the week is $490.
Divide that amount by the number of hours worked (45 hours) and you get $10.88. That will be the new normal rate per hour for the week.
To calculate overtime wages, take that normal rate, halve it and you will get $5.44. That will be the rate used to calculate the overtime hours of the week.
The amount will vary according to your hours worked, hourly rate, and commission earned.
Employees in Illinois have the option of suing their employer in court for unpaid overtime compensation. The circumstances determine the statute of limitations:
- Demands for minimum pay and overtime pay under state statute – three years
- Demands for minimum pay and overtime pay under the federal statute – 2 years (3 years if an employer intentionally broke the law)
According to federal overtime requirements, there are four main types of White Collar employees in Illinois that are not protected by the law and are exceptions to minimum wage rules. As long as they earn at least $684 per week, they do not need to receive 1.5 times their hourly pay rate for working beyond 40 hours. The four categories of White Collar employees include:
- Outside sales representatives
Employers usually misclassify their employees to avoid providing benefits such as overtime compensation. In Illinois, this can cost a company more than what they were trying to save when they chose to misclassify employees.
Misclassifying workers in Illinois may have the following effects:
- Financial sanctions for failing to record employee wages.
- Financial sanctions are imposed for failing to make payments to the unemployment insurance.
- Staff who knowingly cause a business to fail to make payments may now be held personally accountable for the amount owed from the business.
Below, we present law cases relating to fair overtime compensation for employees in Illinois:
1. Pizza Franchise Required to Pay $250K to Employees After Overtime Violation Claims
The case US Department of Labor v. Om Matteson Pizza, Inc., initiated in 2021, highlights that Rosati’s Pizza has been found in violation of the Fair Labor Standards Act (FLSA). Despite their employers’ management of their work schedules and responsibilities, delivery drivers were mistakenly classified as independent contractors.
Besides that, other violations include certain staff members who work more than 40 hours in a workweek not being paid overtime, misclassification of some management staff as exempt from the overtime rule, and not maintaining proper pay records for employees.
The case concluded with Rosati’s Pizza having to pay a total of $250k in back wages and liquidated damages to their employees. They are also required to accurately manage all employees’ records of work and overtime hours moving forward.
Key lessons from this case:
- Employees must be informed of their entitlements regarding overtime compensation and must notify the proper authorities of any infractions.
- It’s important to have written records of any agreements that workers make to work extra or on different schedules for the workweek. Regarding the number of overtime hours worked as well as the corresponding overtime rate, this paperwork could potentially avoid disagreements.
- Accurately tracking employees’ work hours can be improved by the implementation of trustworthy timekeeping systems. A solid system in place makes it possible to guarantee that proper documentation is readily available to support overtime claims.
2. Global Trade Hub to Pay $142,200 in Settlement over Employees’ Overtime Pay
In People of the State of Illinois v. Global Trade Hub, a settlement was initiated after a lawsuit was filed stating that Global Trade Hub failed to pay their workers time and a half for the hours worked exceeding forty hours per week violating the Illinois Minimum Wage Law.
Global Trade Hub and the Office of the Attorney General agreed on how to resolve the case, and both parties consented to the entry of this settlement. Global Trade Hub has consented to the settlement, while not admitting guilt, to bring the case to a quick conclusion.
The agreed settlement amount is $142,200 which is to be paid by Global Trade Hub.
Global Trade Hub must also guarantee that the aforementioned wage information is included in the paychecks provided to their workers.
Key lessons from this case:
- The option for a settlement should always be explored as it is an efficient and cooperative method that can be used in replacement for a court trial. This allows the Department of Justice to settle any disagreements by negotiating among both parties.
- It is important to have rules in black and white, to abide by the law, and to encourage employees and employers to have open comments to maintain equality when it comes to compensation as well as to avoid having legal battles.
3. Illinois Home Healthcare Provider to Pay $1.1M to 69 Employees for Violating Overtime Laws
In the case of Walsh v. McDevitt, a federal court has mandated that Midwest Home Care, an Illinois-based provider of home healthcare, pay 69 workers $1.1 million in unpaid salaries and penalties. After conducting an inquiry, the U.S. Department of Labor discovered that the company had not paid its employees for all hours worked.
The company’s argument that it was immune from the Fair Labor Standards Act as it operates only in Illinois was rejected by the court. The court also decided that participating employees’ names may be preserved.
It was determined that the corporation had breached rules governing record keeping.
Midwest Home Care has altered its payroll procedures and will no longer commit such violations in the future. The case serves as a reminder of how common wage infractions are in the home healthcare sector.
Key lessons from this case:
- The healthcare provider’s argument that it was free from wage rules because it only conducted business in Illinois was rejected by the court. This demonstrates the importance of businesses realizing that regardless of their location or size, they may still be governed by federal labor rules.
- The case brings to light the widespread problem of pay theft in sectors like home nursing. Employer salary violations frequently affect low-paid workers in various industries.
- The court ruled that the corporation failed to adequately log employees’ hours which breached record-keeping regulations. To calculate the correct compensation for employees and guarantee compliance with wage standards, proper documentation is crucial.
Learn more about Illinois Labor Laws through our detailed guide.
Important Cautionary Note
When making this guide we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you seek advice from qualified professionals before acting on any information provided in this guide. We do not accept any liability for any damages or risks incurred for use of this guide.