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WHAT YOU DON'T KNOW COULD BANKRUPT YOU: New Illinois Laws Employers Must Become Familiar With.



Many new laws have either recently been enacted or will be enacted in the year 2020 that will affect businesses across the state of Illinois. Being unaware of these new laws could increase your businesses’ exposure to a litigation case, especially an employee lawsuit. These suits can be much more than just an inconvenience. They are expensive, distractive for your management team, and can quickly erode productivity and employee morale. Employee lawsuits are becoming much more common, making employment practices liability insurance (EPLI) a necessity for businesses large and small.


Over the last 20 years, employee lawsuits have risen roughly 400%, with wrongful termination suits jumping up more than 260%. Oddly enough, you are more likely to be sued by an employee these days than to have a fire at your facility.


If you think its only large corporations that are being sued, you are wrong. Roughly 41.5% of employee lawsuits are brought against private companies with less than 100 employees. The financial damage of employee lawsuits can be dramatic; the cost of settling out of court averages $75,000, and the average jury award hits $217,000 if you go to court and lose.


And it’s more than just wrongful termination that can end in a lawsuit, you can be sued for many reasons. Despite all of these scary numbers, roughly 7 out of 10 businesses don’t carry EPL insurance. This can be an expensive mistake, especially considering how currently EPLI is readily available and affordable.


As always, we want to provide our clients with the information required to mitigate, limit, or avoid risks. While we take great pains to verify the accuracy of the information we provide, it is best practice to consult an attorney when interpreting legislation and how it may affect your business. Listed below are some of the ordinances that your business may be affected by. I have provided a quick overview of the context and any key points and will also include a link to the legislation itself. Of Course, feel free to contact us here at Smart Risk Insurance to review your current coverage and address any coverage gaps.


Email: jason@smartriskinsurance.com or call 618 316-7272.


Lifting Up Illinois Working Families Act (Minimum Wage)

http://www.ilga.gov/legislation/publicacts/101/101-0001.htm

Effective: February 2020


Illinois state legislators have passed this act in order to raise minimum wage from $8.25, as it currently sits, to $15 an hour. This will change the yearly salary for worker making minimum wage from $16,200/year to $30,000/year. Business with 50 or less full-time employees will be able to use tax credits to help compensate their employees to the new state standard; under this, employees must work a consecutive 90 days to be considered eligible for this tax credit. These businesses may also use part-time employees for future tax credits, but at a lesser extent that those who work full time. The increase is to occur over a 6-year period set to follow these dates:




Amendment to the Illinois Income Tax


Effective: To be voted on, November 2020

http://www.ilga.gov/legislation/billstatus.asp?DocNum=687&GAID=15&GA=101&DocTypeID=SB&LegID =116624&SessionID=108


The Illinois House and Illinois Senate have created and passed two separate pieces of legislation affecting taxes in Illinois. The first being a graduated income tax within the state. This will be an amendment to the Illinois Constitution, needing a 60% approval of Illinois citizens (or 50% of those voting within the election) to be ratified.


If the amendment is approved by the November 2020 voters, then the second bill will outline the recommended tax rates for corporations based off income; law makers are expecting this to be implemented as early as January 2021. It should also be noted that in accordance with Illinois law, Corporate Personal Policy Replacement Tax (CPPRT) is also applicable to C Corporations (with 2.5 percent and 1.5% through entities). Below are the recommended rates:


Corporate:


Individuals and pass through entities:




Salary History Ban and other Amendments to Equal Pay Act


Effective: September 29th, 2019

http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=101-0177


This bill instructs employers that they may not require an applicant to reveal prior wages while in an interview, but instead can ask their expectation of compensation. This legislation furthermore stops employer’s ability to restrict employees from discussing wages with fellow workers, halting internal disclosure contracts that do such that. There are exceptions to this if the employee in question had obtained a job in which their compensation was of public record, in which case the employer may review the wages. Furthermore, this Act is designed to stop discriminatory wages within the workplace by making employers provide a nondiscriminatory factor into an employee’s difference in wage. Discriminatory includes being based off gender, race, sexual orientation, religion, or other protected characteristics. Failure to do so can cost businesses $10,000, not including legal and personal fees.


Collective Bargaining Freedom Act


Effective: April 12th, 2019

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=3937&ChapterID=68


This Act is made with the purpose to protect labor organization ability to negotiate collectively by prohibiting local government’s from enacting any legislation, rules, regulations, or ordinance that restrict or regulate worker’s unions.


Amendment to the Worker’s Compensation Act


Effective: January 1st, 2020

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2430&ChapterID=68


This amendment will require employers to submit an application for self-insurance, guarantee employers payment of compensation, and his/her entire liability to pay. Furthermore, a hearing may be called to determine whether an employer knowingly failed to provide suitable coverage to employees. Businesses with work declared “extra-hazardous” may be subject to an emergency work-stop order. This amendment will also set the grounds that citations shall within $2,500 t0 $10,000 for offenders, multiple offenses can lead to increase fines.


Equitable Restroom Act


Effective: January 1st, 2020

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=1521&ChapterID=35


This act requires locations to indicate single-use restroom areas as “all-gender” and designate them for single or family use only. Furthermore, it requires stations for baby-changing stations to be accessible to places both designated to both men and women, and also requires for the correct signage to be used to indicate the area dedicated. This part of the act is only applicable to public accommodation, state buildings, or retail stores of 5,000 square feet or more. It is not applicable to industrial buildings, nightclubs, or any location that requires 18+ entry.


Illinois Workplace Transparency Act


Effective: January 1st, 2020

http://ilga.gov/legislation/fulltext.asp?DocNum=1829&DocTypeID=SB&GAID=11&SessionID=84


This act will not allow employers to create contracts that include disclosure agreements against discriminatory behavior within the workplace. Any contract that includes such clauses will be voided as of the effective date. Discriminatory behavior will be defined in this act by the Illinois Human Rights Acts (IHRA). Employers will also be liable for harassment and sexual assault of nonemployee (ex: contractors, consultants) if the employers is made aware and does not take the necessary steps to take corrective measures. This act further goes on to expand the definition of “employer” and “worksite”. Employer will now be defined as any entity that employs one or more persons, versus the current definition as needing 15 or more employees. Worksite will now include places beyond the physical location of the company and will encompass places of remote work or work off the main campus of the business. Every employer in Illinois will now be required to provide sexual harassment prevention training once per year to employees, meeting or exceeding the standards of the model provided by the Illinois government. The fine for failure to provide training ranges from $500 to $5,000. Finally, the act amends the Victims Economic Security and Safety Act to allow victims of sexual assault, domestic violence, or gender violence to be allotted paid leave to seek medical attention, legal assistance, counseling, safety planning, or any other relevant act needed to amend their situation. Victims should be allotted at least 4-12 weeks to take care of these means under the amendment, and employers can be fined for failure to provide this.


Artificial Intelligence Video Interview Act


Effective: January 1st, 2020

http://www.ilga.gov/legislation/BillStatus.asp?DocNum=2557&GAID=15&DocTypeID=HB&SessionID=10 8&GA=101


This act requires employers to seek permission to use artificial intelligence or interviews in the form of video to assess a potential employee. The act furthermore restricts employers from sharing the vide to any person that is not relevant to the interview process. Finally, the act requires the employee to delete any footage used within 30 days of receipt if an employee request so.