Salaried employees are individuals who receive a predetermined fixed amount of compensation at regular intervals, such as weekly or less frequently.
Specific laws and regulations govern the rights and obligations of both salaried employees and their employers.
The aim of this article is to provide an overview of the applicable laws and regulations in Illinois concerning salaried employees. It will cover various topics, including payment, break and leave entitlements, as well as the distinction between exempt and non-exempt employees.
This article covers:
- Payment of Wages for Salaried Employees in Illinois
- Pay for Working Overtime for Illinois Salaried Employees
- Exceptions to Overtime Exemptions for Illinois Salaried Employees
- Time Tracking of Salaried Employees Hours in Illinois
- Violation of Salaried Employees Wages Payment in Illinois
- Leave Entitlements for Salaried Employees in Illinois
- Break Entitlements for Salaried Employees in Illinois
- Deductions from Exempt Employees’ Salary in Illinois
- Termination of Employment for Salaried Employees in Illinois
In Illinois, employers are required to adhere to specific guidelines for paying their employees. Pay periods must occur semi-monthly, ensuring that employees receive their compensation within 13 days after the end of each pay period. Employers must also furnish an itemized statement of deductions for each pay period.
Some exceptions apply, with certain roles, such as executive, administrative, professional, and commission-based positions, being compensated on a monthly basis.
If an employee believes they have not been paid fairly, they have the option to file a complaint with the Illinois Workers’ Compensation Commission in person or online.
Being paid on a salary basis doesn’t automatically exempt an employee from overtime pay, their primary duties must also qualify for exemption to be disqualified from receiving overtime pay.
If you are based in Illinois, it is important to understand the exceptions to the overtime rule to verify if you are eligible for overtime compensation.
If you are eligble, to determine the overtime rate for salaried employees, start by calculating the regular rate, which is the salary divided by the intended hours it covers.
If the regular hours are less than 40, pay the regular rate for each hour up to 40 and then pay time and a half for hours over 40. If the regular hours are 40, pay time and a half for hours over 40.
As stated above, overtime exceptions are not strictly related to salary requirements.
Under federal overtime regulations, certain White Collar employees are exempt from minimum wage and overtime rules if they earn a minimum of $684 per week. The four categories of exempted employees are administrative, executives, professionals, and outside sales representatives.
These individuals are not entitled to receive 1.5 times their hourly pay rate for working more than 40 hours in a week.
Learn more in detail about Illinois Overtime Laws.
Salaried employees receive a consistent salary, regardless of their working hours, which frees them from the need to keep track of hours and enables them to concentrate on their tasks within reasonable timeframes. Nevertheless, keeping records and timesheets of hours can be advantageous in situations such as unexpected absences, vacations, holidays, and sick days.
Furthermore, tracking payroll and ensuring compliance with overtime hours (if applicable based on company policies) can be important. While it’s not mandatory, these records provide valuable information for salaried employees regarding tracking time off and compensation.
Explore further insights into time tracking for both salaried and hourly employees in the United States.
Employers found in violation of the Wage Payment and Collection Act in Illinois face various penalties. They are liable for the unpaid wages or final compensation owed to the employee, along with damages equal to 5% of the underpayment per month, starting from the date of the underpayment and continuing until the amount is paid.
Additionally, if ordered by the Illinois Department of Labor (IDOL) or a court to pay, employers must pay a non-waivable administrative fee of $250 to IDOL, which increases to $500 for amounts over $3,000 and $1,000 for orders over $10,000.
If an employer fails to comply with a demand or order from IDOL, they are subject to further penalties, including a 20% penalty payable to IDOL and a 1% per day penalty payable to the employee, accruing until the amount is paid.
Moreover, officers of a corporation or agents knowingly allowing an employer to violate the Act can be held personally liable for the employee’s unpaid wages and any fees or penalties assessed.
In Illinois, salaried employees have access to various types of leave. Medical and Family Leave is available to employees who have worked for at least 12 months and 1,250 hours for a company with at least 50 employees. They can take up to 12 weeks of leave every 12 months for reasons like caring for a family member’s health or bonding with a new child.
Blood Donation Leave provides one hour of leave every 56 days for employees under an employer’s supervision for at least six months in businesses with over 50 employees. Bereavement Leave grants up to 14 days of unpaid leave for employees who lost a child, applicable to businesses with over 50 employees.
School Leave allows parents in companies with over 50 employees to attend school-related activities for up to 8 hours. Jury Duty Leave is granted to employees called to serve on a jury without facing job loss. Voting Time Leave provides up to 2 hours of leave for eligible employees whose shift starts or ends within 2 hours of polling time.
Military Leave ensures job protection and benefits for employees serving in the US Armed Forces. Family Military Leave allows up to 15 days of unpaid leave for employees with family members in military service for over 30 days in companies with at least 15 employees. Emergency Response Leave protects employees needing time off during emergencies.
Witness Leave must be provided to employees called to appear in court. Crime Victim Leave offers paid or unpaid leave for employees or their family/household members affected by a crime. Domestic Violence or Sexual Assault Leave permits leave for victims to address related issues, duration depending on employer size.
Employers in Illinois are required to provide meal breaks to their employees. For shifts lasting 7.5 hours or more, employees must receive a meal break of at least 20 minutes before they have worked for 5 hours.
If an employee works for double the required time, they are entitled to two meal breaks. Minors, on the other hand, are entitled to a meal break for each 5-hour shift they work.
Employers are allowed to make certain deductions from an employee’s pay, but they are required by law to provide an itemized statement of deductions for each pay period. Deductions can be made for reasons such as taxes, employee benefits like health insurance premiums and union dues, or when there is a valid wage assignment or deduction order with the employee’s written consent.
Certain deductions are specifically allowed for employees of the City of Chicago, METRA, CTA, CHA, Chicago Park District, Chicago Board of Education, and Chicago City Colleges.
Moreover, an employer cannot withhold earned vacation, wages, or final compensation due to reasons like failure to provide termination notice, involuntary termination, or not returning employer-owned equipment. Accepting a paycheck with deductions does not necessarily mean the employee has accepted the deduction, and the law protects the rights of the employee in such cases.
Illinois has replaced the employment-at-will regulation with the “just cause” regulation starting January 1, 2022.
Under the new law, employers can only terminate employees for just cause, such as unsatisfactory job performance, serious misconduct, or genuine economic reasons.
Moreover, employers are now obligated to provide mandatory severance pay when terminating an employee.
Additionally, employers must issue a final paycheck to terminated employees, covering all owed wages and benefits. Ideally, the final paycheck should be given at the time of separation, but if not possible, it must be provided no later than the next regular payday.
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.