The Seven-Stop Payday Walk
One practical way to review wage-law compliance is to walk through a single payday from start to finish. The Seven-Stop Payday Walk follows the order in which the Illinois Wage Payment and Collection Act touches a paycheck.
- Schedule. Confirm paydays fall at least twice a month, with each payment inside the time limits in the rules and numbers.
- Notice. Check that each worker was told the pay rate, payday and place of payment at hire, and was told before any change.
- Stub. Open one pay stub: hours, rate, overtime, gross wages, deductions and year-to-date totals. Confirm copies are kept for 3 years.
- Deductions. Match every deduction to a legal requirement, a benefit to the worker or written consent given at the time.
- Final pay. Test a sample separation: wages, earned commissions, bonuses and earned vacation by the next regular payday.
- Expenses. Look for a written expense reimbursement policy and its 30-day submission rule.
- Posting. Confirm the paydays notice and IDOL summary are posted, and sent by email or posted online for remote staff.
Common mistakes
- Paying a leaver on a later "final paycheck" date instead of the next regular payday.
- Letting policy forfeit earned vacation at separation.
- Holding the last paycheck until a uniform, tool or phone comes back, which IDOL guidance says is not allowed.
- Taking shortage or damage deductions without a written agreement signed at the time.
- Treating a worker as a contractor when all three parts of the Section 2 test are not met.
- Pay stubs that miss required fields or are not kept 3 years (see record retention).
- Having no written expense reimbursement policy.
- Printing "payment in full" on a disputed paycheck, which is void and a violation.
When to talk to an attorney
A CPA cannot answer these legal questions. Employers commonly bring in an attorney when:
- An IDOL claim, demand letter, investigation or lawsuit arrives, including one for similarly situated employees.
- A dispute turns on whether a worker is a contractor, or on a deduction or forfeiture backed by a signed agreement.
- A bonus, commission or severance plan is unclear about when pay is "earned".
- An officer or manager faces personal or criminal exposure for willful non-payment.
- A construction subcontract chain or a multi-state workforce is involved.
Frequently asked questions
When must an Illinois employer pay final wages?
The Act says final pay goes out at separation if possible, and no later than the employee's next regularly scheduled payday. It includes earned commissions, bonuses and vacation and holiday pay. A worker can ask in writing to have it mailed.
Can an employer deduct for a broken tool or unreturned uniform?
Deductions are limited to those required by law, those that benefit the employee, those under a valid assignment or order, and those with express written consent given freely at the time of the deduction (a few large public bodies have extra rules). IDOL guidance says an employer may not hold pay for unreturned uniforms or equipment.
Does an Illinois employer have to pay out unused vacation?
Where a contract or policy provides paid vacation, earned vacation must be paid in final compensation, and a policy cannot forfeit it (a collective bargaining agreement can provide otherwise). Time accrued only under the Paid Leave for All Workers Act need not be paid out unless it sits in a PTO or vacation bank.
How long does a worker have to file a wage claim with IDOL?
One year after the wages were due. Other deadlines apply to other claims, such as three years for Paid Leave Act complaints, so the claim type matters.
A CPA can help with the payroll, tax and accounting side of these rules, including Illinois filings, and works alongside the owner's attorney on the legal questions.
Official sources
- Illinois Department of Labor: Wage payment FAQ
- Illinois Department of Labor: Deductions from pay FAQ
- Illinois General Assembly: 820 ILCS 115, Wage Payment and Collection Act
- Illinois Department of Labor: Wage Payment and Collection Act
This page is a plain-language summary. The official source controls if there is any difference.