24 th Annual Illinois Statewide APA Payroll Conference

24 th Annual Illinois Statewide APA Payroll Conference “Be a Payroll Champion” Illinois Department of Labor Minimum Wage & Overtime One Day of Rest in Seven Illinois Wage Payment and Collection Act Executive, Administrative & Professional Exemptions Illinois Child Labor Law La. June Davis

Illinois Minimum Wage Law 820 ILCS 105/1 -16 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 2

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Coverage n n Covers all Illinois employers with four or more employees Family members are not included in sole proprietorships but are covered in corporations 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 3

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Minimum Wage n n July 1, 2010 increased to $8. 25 in Illinois compared to federal minimum wage of $7. 75 Credit of. 50 given for employees under 18 years of age ($7. 75) 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 4

Illinois Minimum Wage Law 820 ILCS 105/1 -16 New Minimum Wage Rates n n As of July 1, 2010, Illinois mw increased to $8. 25 per hour The new rate makes IL the 3 rd highest mw paid in the nation 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 5

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Tipped Employees n n n Servers, bartenders, bus help etc. not hostesses, management, dishwashers Employee must be paid 60% of wage $4. 95 for 18 years of age and older $4. 65 for under 18 years of age Reasonable allowances for meals and/or lodging 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 6

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Overtime n n Time and one half or the employee’s regular rate must be paid for all hours worked in excess of 40 hours of actual work Per work week -defined as 168 consecutive hours fixed and permanently determined by the employer 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 7

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Overtime continued n n n Hours actually worked (not required for vacation, sick time, holidays) Cannot average two weeks (not over 80 hours in two weeks) Tipped employees (Half of regular minimum wage $4. 12 + 60 % of minimum wage $4. 95 = $9. 07 for overtime rate) 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 8

Illinois Minimum Wage Law 820 ILCS 105/1 -16 What is the Regular Rate? n n n Total remuneration divided by total hours worked Must include all wages (bonuses, shift differential, incentive pay) Each week stands alone in the calculation 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 9

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Exemptions from both Minimum Wage & Overtime n n Drivers, driver’s helpers, loaders and mechanics subject to The Secretary of Transportation Outside salesmen Domestic workers Certain agricultural workers n n Members of religious corporations Certain college students under work study programs 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 10

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Sub-minimum wage allowance n n Licensed by IDOL to employ handicapped workers Licensed by IDOL to employ learners 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 11

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Overtime Exemptions n n Salesmen and mechanics selling and servicing automobiles, trucks or farm implements in retail establishments (example – car dealerships salesmen & mechanics exempt however office staff, parts personnel and secretaries are not) Salesmen primarily engaged in selling trailers, boats, or aircraft 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 12

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Overtime Exemptions con’t. n n Agricultural Labor Executive, Administrative and Professional employees as defined in the Fair Labor Standards Act of 1938 and the rules adopted under that Act, as both existed on March 30, 2003 but compensated at a guaranteed salary rate of $455. 00 per week or higher 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 13

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Overtime Exemptions con’t. n n Certain commissioned employees employed in retail or service establishments as described in paragraph 7(I) of the FLSA Must have bona fined commission plan More than half of wages must come from commissions Average hourly rate must be more than 1 ½ times the federal minimum wage ($7. 75 x’s 1. 5 = $11. 63) for representative period of 1 to 6 months 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 14

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Overtime Exemptions con’t. n n Employee in the stead of another employee of the same employer pursuant to a work time exchange agreement between employees Certain employees of not-for-profit education or residential child care institutions 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 15

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Record Keeping n n n n Three year retention required Name of employee Address of employee Birth date of employee under 18 years of age Social Security number Sex and occupation in which employed Type of payment (salary) and dates of pay for each pay period n n Hours worked each day and each work week (original time records) Time of day and day of week each workweek begins Basis for which wages are paid Additions and deductions from wages for each pay period with explanation 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 16

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Contact: Illinois Department of Labor Fair Labor Standards Division 160 N. La. Salle St. Suite C-1300 Chicago, IL 60601 (312)793 -2804 Website: www. state. il. us/agency/idol/ n 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 17

Illinois Minimum Wage Law 820 ILCS 105/1 -16 Questions? ? 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 18

One Day of Rest in Seven 820 ILCS 140 One Day of Rest in Seven Illinois Department of Labor 820 ILCS 140 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 19

One Day of Rest in Seven 820 ILCS 140 Provisions l Day off in each week • 24 hours of rest in each calendar week l Meal period • 20 minutes after 5 hours of work if 7 1/2 hour of work or longer 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 20

One Day of Rest in Seven 820 ILCS 140 One day off each week l l Every employee must receive 24 consecutive hours of rest in each calendar week Calendar week is always Sunday through Saturday 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 21

One Day of Rest in Seven 820 ILCS 140 Meal period required l l 20 minutes required within five hours of starting time for all employees required to work 7 1/2 hours or longer additional 20 minutes in each continuous 7 1/2 hours 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 22

One Day of Rest in Seven 820 ILCS 140 Exception from the statute l l l Watchmen and security guards Employees who work less than 20 hours per week Agricultural employees Governmental employees Certain seasonal perishable products producers 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 23

One Day of Rest in Seven 820 ILCS 140 Exception from the day off provision l l Executive, administrative and professional employees as defined by the Fair Labor Standards Act Certain supervisors defined by the NLRB 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 24

One Day of Rest in Seven 820 ILCS 140 Exception from meal period provision l Employees whose meal periods are bargained for through the collective bargaining process 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 25

One Day of Rest in Seven 820 ILCS 140 Exception from the day off provision l l Employer request Written exception from IDOL prior to the work All work must be voluntary even with the written permission 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 26

One Day of Rest in Seven 820 ILCS 140 Exception from the day off provision cont. l l If requested, eight weeks granted each year without justification Additional weeks granted if justified as to necessity 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 27

One Day of Rest in Seven 820 ILCS 140 Record keeping l l Three years retention Hours worked each day and each week Lunch hours, documented received Open to inspection by IDOL 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 28

One Day of Rest in Seven 820 ILCS 140 Illinois Department of Labor Fair Labor Standards Division 160 North La. Salle St. C-1300 Chicago, IL 60601 312 -793 -2804 http: //www. state. il. us/agency/idol/ 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 29

One Day of Rest in Seven 820 ILCS 140 Questions? ? 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 30

Illinois Wage Payment and Collection Act 820 ILCS 115/1 - 16 Illinois Wage Payment and Collection Act (820 ILCS 115/1 -16) 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 31

Illinois Wage Payment and Collection Act 820 ILCS 115/1 - 16 What the Act provides The Act provides three basic areas of protection to workers: l Regulates the time of payment of wages, requires employers to pay by certain dates l Prohibits unilateral/illegal deductions, cannot take money from your pay check l Establishes requirements for final compensation, what you are entitled to at termination 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 32

Illinois Wage Payment and Collection Act 820 ILCS 115/1 - 16 All wages must be paid within: 13 days if paid bi-weekly or semimonthly l 7 days if weekly pay l 24 hours if paid daily l Wages of Executive, Administrative, and Professional employees as defined in FLSA may be paid monthly l 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 33

Illinois Wage Payment and Collection Act 820 ILCS 115/1 - 16 Payments l Must be in lawful money, check or cash – redeemable without discount Cannot require direct deposit l Statement of deductions is required l 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 34

Illinois Wage Payment and Collection Act 820 ILCS 115/1 - 16 Deductions prohibited l * * * All unilateral or unauthorized deductions are prohibited unless: required by law, example taxes to the benefit of the employee, union due, health insurance voluntary written consent of the employee at the time the deduction is being made 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 35

Illinois Wage Payment and Collection Act 820 ILCS 115/1 - 16 Not allowed to deduct for: - damages - shortages - breakage - failure to return employer property, etc. 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 36

Illinois Wage Payment and Collection Act 820 ILCS 115/1 - 16 Final compensation Required at next regular pay day; not on day of exit l Must calculate all earnings including pro rata vacation, commission and bonus l Must make check available to separated employee for five days l If employee fails to pickup upon scheduled pay day, then demands after the five day limit, employer has additional five days to re-issue l 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 37

Illinois Wage Payment and Collection Act 820 ILCS 115/1 - 16 All Claims l l l are filed in writing by individual employee information is shared through the mail with employer If employer pays, file is closed 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 38

Illinois Wage Payment and Collection Act 820 ILCS 115/1 - 16 Claims continued: l Employer responds in dispute or disagreement, – – – file reviewed and a copy sent to the claimant one of three things occur: case is dismissed case is set for hearing automatic demand for payment is issued 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 39

Illinois Wage Payment and Collection Act 820 ILCS 115/1 - 16 Claims cont. l l l If Claimant does not respond to employer’s disagreement statements: the case is dismissed! Important to let the agency know your correct address 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 40

Illinois Wage Payment and Collection Act 820 ILCS 115/1 - 16 If necessary: l l Informal Hearing is conducted. Case is dismissed or, Employer is demanded to pay. If employer fails to pay – – case is referred to Attorney General, or case is closed. 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 41

Illinois Wage Payment and Collection Act 820 ILCS 115/1 - 16 For information l Call: 312 -793 -2808 l http: //www. state. il. us/agency/idol/ 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 42

Illinois Wage Payment and Collection Act 820 ILCS 115/1 - 16 Questions? ? 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 43

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 44

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Guaranteed Salary not subject to deductions n Paid the same promised salary each pay day (can be paid semi-monthly or monthly) n Salary must be $455. 00 per week n Initial and termination weeks can be prorated by day n Partial day deductions are prohibited 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 45

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Guaranteed salary continued: Full day deductions allowed only if: With Leave Plan: n Employee voluntarily absent for a full day n Sick, and has exhausted a sick or leave plan Without Leave Plan: n If no leave plan in place, can not deduct for sickness n If one hour is worked the whole week is payable 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 46

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Executive Exemption Must meet all criteria n n n Primary Duty must be management Supervises two full time employees Authority to hire and fire or recommend Customarily and regularly exercise discretionary powers Guaranteed salary of more than $455. 00 per week 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 47

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Primary duty must be management: n Hired to function as the manager n More than 50% of time spent supervising n Recognized as the supervisor n Job title is not significant n What do they actually do? 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 48

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Supervise two or more employees: Two full-time employees or part time equivalent n Must be 80 hours of labor n Can be three or four part as long as it is 80 hours n Must be direct supervision n 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 49

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Authority to hire and fire or recommend: Must have exercised that authority n Must be part of the evaluation process n Must have ability to set rates of pay n Some weight has to be given to their recommendations n 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 50

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Customarily and regularly exercise discretionary powers: Make independent decisions n Set schedules n Call for service work if there is a breakdown n Answer the phone n Call for help n Ability to fix what is broken n Not very well defined n 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 51

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Administrative Exemption Criteria for determination: n Office or non-manual work directly related to management policies or general business operations; OR n Academic instruction or training carried out in the administration of a school system or educational establishment; AND 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 52

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Criteria continued: n n n Customarily exercise discretion and use independent judgement Assist a proprietor or bona fide executive Perform work only under general supervision along specialized or technical lines that require special training Execute special assignments Spend no more than 20% of time (40% in retail or service establishment) on non-exempt work Must be paid on a salary or fee basis of $455. 00 per week 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 53

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Who are these employees? n Thinkers and planners n Advisory specialists, buyers, purchasing agents n Wage rate analysts n Safety directors n Human Resource managers n People that make decisions that affect profit and loss 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 54

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Who are they in schools? n Academic administrative employees n Principals and heads of departments 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 55

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Who are they NOT? ? ? n Bank tellers, bookkeepers n Secretaries n Shipping and receiving clerks n Accounts receivable and payable staff n Payroll staff n Building management and maintenance 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 56

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Key Issues n Perform no production work of any kind n They are not the people who do not fit the other exemptions 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 57

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Professional Exemptions n Learned n Artistic n Teaching 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 58

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Learned Professions Knowledge of an advanced type, four year degree or its equivalency n Field of science of learning n Examples – attorneys, doctors, registered nurses, architects, and engineers n Technologists not technicians n 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 59

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Artistic Professions n Creative work requiring imagination or invention n Talent, entertainment industry personnel, radio and television talents, actors and musicians 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 60

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Teaching Professionals n Certified or recognized n Educational institution or school system 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 61

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Other criteria Exercise discretion and judgement n Work is predominantly intellectual and varied – as distinguishable from routine or mechanical n Not more than 20% of time is spent on activities not essentially a part of the professional duties n Salary or fee of $455. 00 per week n 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 62

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Exemptions from the salary test: n Holder of a valid license in the practice of law or medicine and engaged in the practice n Medical interns or residents n Teachers in schools or education institutions 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 63

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 “Salary test” waived Limited to highly skilled computer analysts, programmers, software engineers and specialists, etc. n If employee is compensated at 6 ½ times the minimum wage in effect at the time of the change n $4. 25 x’s 6 ½ = $27. 63 per hour n 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 64

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 For further information: Contact info: Illinois Dept of Labor Fair Labor Standards 312 -793 -2804 Website: www. state. il. us/agency/idol/ 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 65

Executive, Administrative and Professional Exemptions FLSA 29 CFR 541 Questions? ? 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 66

Illinois Child Labor Law 820 ILCS 205/1 et seq. Illinois Department of Labor Fair Labor Standards Division 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 67

Illinois Child Labor Law 820 ILCS 205/1 et seq. Protects minors ONLY until their th 16 birthday • The Fair Labor Standards Act, federal law, continues to protect minors until the age of 18 years from certain hazardous occupations if the employer is covered by the Act. 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 68

Illinois Child Labor Law 820 ILCS 205/1 et seq. Three basic areas of protection • Certifies the age of the worker • Restricts the hours of work allowed • Prohibits certain types of work 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 69

Illinois Child Labor Law 820 ILCS 205/1 et seq. Employment and Age Certificates • Both are issued by the local school or the Regional Office of Education • Employment Certificates (work permits) issued for those under 16 years of age and expire annually • Age Certificates for ages 16 to 20 years and valid for the term of employment 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 70

Illinois Child Labor Law 820 ILCS 205/1 et seq. Procedure for securing certificate: Minor must be accompanied by a parent or guardian and must appear at the school 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 71

Illinois Child Labor Law 820 ILCS 205/1 et seq. Documents Required 1. 2. 3. 4. Letter of intent to employ from the employer stating the type of work and hours to be worked. Birth certificate Physical fitness examination current within one year Principal’s statement, if work is during the school year, verifying that the minor is in good academic standing. 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 72

Illinois Child Labor Law 820 ILCS 205/1 et seq. Hours of work restrictions: • Not before 7: 00 AM • Not after 7: 00 PM (except June 1 st through Labor Day when minor is allowed to work until 9: 00 PM) • Not more than 3 hours per day when school is in session • Not more than 8 hours per day when school is not in session • Not more than 24 hours per week when school is in session 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 73

Illinois Child Labor Law 820 ILCS 205/1 et seq. Hours of work (continued): • Not more than 48 hours per week when school is not in session • Not more than 8 hours per day combining school and work • Not more than six days in one week • Scheduled meal period of at least 30 minutes required after five hours of work 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 74

Illinois Child Labor Law 820 ILCS 205/1 et seq. Hazardous Occupations • Work is not allowed in the 26 listed prohibited areas • No exceptions!!!!!!! 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 75

Illinois Child Labor Law 820 ILCS 205/1 et seq. List of hazardous occupations • Numerous amusement facilities like bowling alleys, pool halls, exhibition parks, skating rinks, plus messenger services • In the oiling / cleaning of machinery • Mines and quarries • Stone cutting or polishing • Hazardous factory work • Manufacturing or use of explosives • Plants manufacturing iron or steel • Operation of machinery used in rolling of metal stock • In or about sawmills or lath • Power driven woodworking machines • Freight elevators / hoisting machines and cranes • In spray painting, exposure to lead or its components as well as other dyes and chemicals 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 76

Illinois Child Labor Law 820 ILCS 205/1 et seq. Hazardous Occupations cont. • In any place that alcoholic drinks are served or sold for consumption on the premises (some exceptions allowed) • In oil refineries • In laundry or dry cleaning • Radioactive substances • Any gas filling or service station • In any construction work • In roofing operations • In excavating operations • In logging operations • Public and private utilities and related services • Meat slaughtering, processing, and packaging • Working on elevated surfaces • In security positions as well as any that requires the use of carrying a firearm • Those that involve the handling or storage of any biohazard substance 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 77

Illinois Child Labor Law 820 ILCS 205/1 et seq. Illinois Department of Labor • Child Labor Hotline 800 -645 -5784 • www. state. il. us/agency/idol/ • Questions? ? 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 78

Contact: Illinois Department of Labor Fair Labor Standards Division 160 N. La. Salle St. Suite C-1300 Chicago, IL 60601 (312)793 -2804 Website: www. state. il. us/agency/idol/ n 24 th Illinois Statewide Payroll Conference "Be a Payroll Champion" 79