Most BA members not aware of new IDOL rules requiring hours-of-work tracking for all employees

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The Chicago Builders Association (BA) reports 70 percent of members surveyed are not aware of a new Illinois Department of Labor (IDOL) regulation requiring employers to track the hours of all employees. “The law applies regardless of whether employees are “exempt” or “non-exempt” as defined by the federal Fair Labor Standards Act,” Hart McLaughlin & Eldridge partner Robert McLaughlin reported in an article published on the BA website.

He cited the regulations which specify:

a) Regardless of an employee’s status as either an exempt administrative employee, executive or professional, every employer shall make and maintain, for a period of not less than 3 years, the following true and accurate records for each employee: the name and address, the hours worked each day in each work week, the rate of pay, copies of all notices provided to the employee as required by subsection (d), the amount paid each pay period and all deductions made from wages or final compensation. Additionally, any employer that provides paid vacation to its employees must maintain, for a period of not less than 3 years, true and accurate records of the number of vacation days earned for each year and the dates on which vacation days were taken and paid.

b) In the absence of employer records, a claimant may not be denied recovery of wages or final compensation on the basis that the employee is unable to prove the precise extent of uncompensated work or final compensation. An employee need only produce sufficient evidence to demonstrate the amount and extent of work or time earned as a just and reasonable inference. The employer must then produce evidence of the exact amount of work or time earned or produce evidence to negate the reasonable inferences drawn from the employee’s evidence. The employer’s failure to make and maintain records as required under subsection (a) shall not preclude a finding based on the information available that wages or final compensation are due, even though the award may be only approximate.

“A lack of hours worked tracking records will cause an employee to instantly prevail in a wage claim against his employer,”McLaughlin reported. “Therefore, employers must track the hours of all of their employees, exempt and non-exempt alike. One easy way to do this is to require all employees to submit time sheets. Notably, merely requiring an exempt, salaried employee to clock in and out will not destroy the employee’s exemption, as long as the employer does not make any deductions from his or her salary based on the amount of time worked.”

Although he wrote that employers may be concerned that complying with this law “could create a perception that the employee is not truly functioning with the discretion and independence necessary to qualify as an exempt employee,” the consequences of not observing it could be painful as the Illinois Wage Payment and Collection Act has criminal and civil penalties, including jail and fines of several hundred thousand dollars.

“Accordingly, employers need to be aware of the regulations of the Labor Department and Wage Act, including keeping detailed records of hours worked by all employees and ensuring timely payments of all wages and benefits owed to employees.”

“The Builders Association ran a short survey to gauge the knowledge our members have of this law and to learn how some of our members are dealing with it,” McLaughlin wrote.  “Seventy percent of those responding were not aware of the requirement. All of those responding stated that no changes to their payroll operations have been made as of yet, in part because they felt their payroll systems were currently asking for and recording the information required. Eighty percent felt this was one more additional burden to deal with. Our survey was a small sampling but did show that if you aren’t aware of this newer law, you’re not alone. However, meeting the requirements of this new law may save you money and problems in the future.”

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