HB3635 104TH GENERAL ASSEMBLY

LRB104 07796 SPS 17841 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB3635

Introduced 2/18/2025, by Rep. Daniel Didech

SYNOPSIS AS INTRODUCED:

820 ILCS 115/2

from Ch. 48, par. 39m-2

Amends the Illinois Wage Payment and Collection Act. Provides that the definition of "wages" includes any severance, back pay, front pay, or any concomitant relief owed to an employee pursuant to a separation or severance agreement between the 2 parties, policy of the employer, judicial ruling, or administrative ruling. Provides that the definition applies to former, current, or future employees. Makes a conforming change to the definition of "employee".

A BILL FOR

AN ACT concerning employment.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Wage Payment and Collection Act is amended by changing Section 2 as follows:

(820 ILCS 115/2) (from Ch. 48, par. 39m-2)

Sec. 2. Definitions. For all employees, other than separated employees, "wages" shall be defined as any compensation owed a former, current, or future an employee by an employer pursuant to an employment contract or agreement between the 2 parties, whether the amount is determined on a time, task, piece, or any other basis of calculation, or any severance, back pay, front pay, or concomitant relief owed to an employee pursuant to a separation or severance agreement between the 2 parties, policy of the employer, judicial ruling, or administrative ruling. Payments to separated employees shall be termed "final compensation" and shall be defined as wages, as defined in this Section, salaries, earned commissions, earned bonuses, and the monetary equivalent of earned vacation and earned holidays, and any other compensation owed the employee by the employer pursuant to an employment contract or agreement between the 2 parties. Where an employer is legally committed through a collective bargaining agreement or otherwise to make contributions to an employee benefit, trust or fund on the basis of a certain amount per hour, day, week or other period of time, the amount due from the employer to such employee benefit, trust, or fund shall be defined as "wage supplements", subject to the wage collection provisions of this Act.

As used in this Act, the term "employer" shall include any individual, partnership, association, corporation, limited liability company, business trust, employment and labor placement agencies where wage payments are made directly or indirectly by the agency or business for work undertaken by employees under hire to a third party pursuant to a contract between the business or agency with the third party, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee, for which one or more persons is gainfully employed.

As used in this Act, the term "employee" shall include any individual permitted to work by an employer in an occupation. "Employee" also includes any individual to whom an employer owes any severance, back pay, front pay, or concomitant relief pursuant to an agreement between the 2 parties, policy of the employer, judicial ruling, or administrative ruling. "Employee" , but shall not include any individual:

(1) who has been and will continue to be free from control and direction over the performance of his work, both under his contract of service with his employer and in fact; and

(2) who performs work which is either outside the usual course of business or is performed outside all of the places of business of the employer unless the employer is in the business of contracting with third parties for the placement of employees; and

(3) who is in an independently established trade, occupation, profession or business.

"Pay stub" means an itemized statement or statements reflecting an employee's hours worked, rate of pay, overtime pay and overtime hours worked, gross wages earned, deductions made from the employee's wages, and the total of wages and deductions year to date.

The following terms apply to an employer's use of payroll cards to pay wages to an employee under the requirements of this Act:

"Payroll card" means a card provided to an employee by an employer or other payroll card issuer as a means of accessing the employee's payroll card account.

"Payroll card account" means an account that is directly or indirectly established through an employer and to which deposits of a participating employee's wages are made.

"Payroll card issuer" means a bank, financial institution, or other entity that issues a payroll card to an employee under an employer payroll card program.

(Source: P.A. 103-953, eff. 1-1-25.)