New Illinois Legislation Expands Punitive Damages in Wage Actions

Illinois employers beware: new legislation will allow employees to collect punitive damages in private actions to collect unpaid wages under the Illinois Minimum Wage Law. Both the Illinois Senate and House recently passed Senate Bill 2339, and Gov. Blagojevich signed the bill into law on July 14, 2006. The bill amends the Illinois Minimum Wage Law by providing for an employer’s liability for punitive damages in all cases where wages have been underpaid.  

This bill appears to be a legislative response to the employer’s victory last year in Gelb v. Air Con Refrigeration & Heating Co. In that case, the Illinois Appellate Court relied on the plain language of the Illinois Minimum Wage Law in holding that punitive damages are recoverable only when the Illinois Department of Labor is a party — not when a private citizen brings an action. With the enactment of this amendment, punitive damages will be available in a private action brought directly by an employee (or group of employees) regardless of the Department of Labor’s involvement.

More specifically, the new provision allows an employee to collect punitive damages equal to two percent of the amount of any underpayments for each month following the date of payment during which such underpayments remain unpaid. The employee already had the right under the previous version of the law to collect the amount of underpayment of wages, together with costs and reasonable attorney’s fees.

This recent legislation highlights the importance of proactively monitoring your wage and hour policies to comply with applicable law.

Additional Information

If you have any questions on this or any other workplace issue, please contact your Ogletree Deakins attorney or any Ogletree Deakins Labor & Employment attorney through the Client Services Department at 866-287-2576 or via e-mail at clientservices@ogletreedeakins.com. 
 

Note: This article was published in the July 17, 2006 issue of the Illinois eAuthority.