New Paystub Obligations for Illinois Employers

“Pay Stub” Defined

The Act defines a “pay stub” as 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.

Obligations

Each payday, an employer is required to furnish each employee with a pay stub with an itemized statement of deductions made from his wages for each pay period.

An employer is required to maintain a copy of an employee’s pay stub for a period of not less than three years after the date of payment, regardless of whether the employee’s employment ends during this period or whether the pay stub is furnished electronically or in paper form.

An employer is also required to furnish copies of pay stubs to current and former employees as follows:

• An employer is required to provide an employee with a copy of the employee’s pay stubs upon the employee’s request. The employer may require that the employee submit the request in writing. The employer is required to furnish a copy of the pay stubs to the employee within 21 calendar days of the employee’s request. An employer is not required to grant an employee’s request for a copy of pay stubs more than twice in a 12-month period.

• An employer is required to provide a former employee with a copy of the former employee’s previous pay stubs upon the former employee’s request. The employer is required to furnish the copy of the pay stubs to the former employee within 21 calendar days of the former employee’s request. An employer is not required to grant a former employee’s request for a copy of pay stubs more than twice in a 12-month period or more than one year after the date of separation. The employer is required to provide a copy of the pay stubs in either a physical or electronic format, as chosen by the former employee. This includes communication transmitted through email, text message, or a computer system, or any other electronic method that allows the pay stub to be downloaded or permanently retained by the former employee.

• An employer who furnishes electronic pay stubs in a manner that a former employee cannot access for at least a full year after separation shall, upon an employee’s separation from employment, offer to provide the outgoing employee with a record of all of the outgoing employee’s pay stubs from the year preceding the date of separation.  The offer shall be made to the outgoing employee by the end of the outgoing employee’s final pay period. An employer is required to record in writing the date on which this offer was made to the outgoing employee and if and how the outgoing employee responded.

• A request made by an employee or former employee shall be made to a person responsible for maintaining the employer’s payroll, including the employer’s human resources department or payroll department, the employee’s supervisor or department manager, or an individual designated in the employer’s written policy.

Penalties

An employer who fails to furnish an employee or former employee with a pay stub as required by the Act or commits any other violation of this Act is subject to a civil penalty of up to $500 per violation payable to the Department of Labor (“Department”). In determining the penalty amount, the Department considers the appropriateness of the penalty relative to the size of the business of the employer charged and the gravity of the violation.

Impact

As a result of this amendment, employers should ensure that their payroll practices are compliant with the new amendment. Employers should review and update their Human Resource policies to ensure compliance with the Act, especially regarding record-keeping and requests from former employees.

Gordon Rees Scully Mansukhani’s Employment team will continue to monitor these amendments and provide further guidance if necessary.