Employee Classification Act

Due to the increasing prevalence of employers misclassifying employees as independent contractors in order to avoid providing the proper compensation, Illinois legislators created the Employee Classification Act in 2008. This act provides definitions of the types of employees which may be considered independent contractors as well as the penalties which employers face for violating the terms of the act. While the act deals specifically with construction workers who work as independent contractors, the terms of the act can be used to apply to all people and entities who perform work for a person or company, but do not fit the requirements of an employee.

Under the Act, an individual can be considered an independent contractor if she "has been and will continue to be free from control over the performance of the service for the contractor," if the service that the individual provides is "outside the usual course of services performed by the contractor," and "the individual is engaged in an independently established trade, occupation, profession, or business."

The Illinois Department of Labor is responsible for conducting investigations into alleged violations of the Act. In the event that an investigation reveals that an employer is guilty of violating the act, the Department of Labor can fine the employer up to $1,000 for each violation found in the first investigation. If any subsequent investigations are conducted within five years of the first investigation, and violations of the act are still found, the employer may be fined up to $2,000 per violation.

As with most laws that are enacted in order to protect employees, the Act forbids anyone from obstructing the enforcement of the Act. Obstruction would include interfering with or preventing investigators from conducting an investigation, or prohibiting employees from reporting violations to the Department of Labor. Under the act, anyone who obstructs enforcement of the act in any way may be fined up to double the normal statutory penalties.

Retaliation is also forbidden under the act. Employees are more likely to stand up for their rights if they know that they cannot be fired from their current position for doing so. In order to ensure that employees are protected, the act expressly forbids employers from retaliating in any way against an employee who reports violations of the act. This includes firing the employee, demoting the employee, or harassing the employee at work.

Under the Employee Classification Act, an employee whose rights have been violated may be able to collect "the amount of any wages, salary, employment benefits, or other compensation denied or lost" as a result of the violation in addition to an equal amount in liquidated damages, compensatory damages, and as much as much as $500 per violation of the act, as well as attorneys' fees and costs.

If an employee has suffered violations of the Employee Classification Act, she has 3 years after she has ceased to work for the employer to file a civil action against the employer. The employee may be able to file a civil action later than that if the employer did something to deter her from exercising her rights under the act earlier.

The Illinois overtime attorneys at the Chicago Overtime Law center have extensive experience representing all kinds of workers in making claims for overtime at both the state and federal level. Serving clients throughout the country, our practice is dedicated to ensuring that the workers we fight for earn an honest and accurate wage for all of the time they spend doing their jobs. Contact us online or call (312) 869-4095 to set up a confidential, no-cost consultation with a member of our team.