Illinois Client Update
Legal News for Illinois Employers 
Protecting Employers for over 30 Years 
November 2017  

Illinois Employers Should Use Caution with Having Low-Income Employees Sign Covenants-Not-To-Compete  
By Joseph H. Laverty

This article may surprise Illinois employers who are not aware that there is an Illinois law prohibiting employers from entering into non-compete agreements with low wage employees. Continue reading for more details.

The unemployment rate in Illinois continues to decline, as is the case nationally. As of the time of writing this article, the state wide unemployment rate in Illinois is 4.6% and numerous experts predict that this rate will go lower as the economy continues to improve. Some cities in Illinois have unemployment rates as low as 3.4%. What this means for employers is that it may become even more difficult to fill open positions.

Many employers are reviewing their wage and benefit packages to try to retain employees. Employers are also using restrictive covenants more and more in trying to keep employees from going to other employers for higher wages and better benefits. Illinois employers need to be aware of the Illinois Freedom to Work Act ("Act"). The Act became law on January 1, 2017. The Act prohibits employers from entering into a covenant not to compete with any low-wage employee.
 
Questions? Contact Attorney Joe Laverty at (563) 333-9102 or by email at jolaverty@wesselssherman.com
The Illinois Department of Employment Security (IDES) Interprets Independent Contractor ABC Test More Harshly than Other States
By Nancy E. Joerg
 
Good news for New Jersey employers who use independent contractors! Happily, the Superior Court of New Jersey Appellate Division [in Garden State Fireworks Inc. v. NJ Dept. of Labor, A-1581-15T2 (N.J. App. Div. September 29, 2017] recently decided that a pyrotechnics company's legal relationship with its independent contractor pyrotechnicians satisfied all three parts of the "ABC test" as laid out in New Jersey's definition of independent contractor status for unemployment insurance purposes.

What makes this New Jersey decision fascinating to me [as an attorney who frequently represents Illinois companies in their independent contractor legal battles with the Illinois Department of Employment Security (IDES)] is the exceedingly sensible way by which the Superior Court of New Jersey Appellate Division interpreted the ABC test. They used common sense!

Questions? Contact Attorney Nancy Joerg in our St. Charles office at (630) 377-1554 or by email at najoerg@wesselssherman.com
Sexual Harassment Protection - Chicago Style
By Walter J. Liszka 
 
The highly questionable activities of Harvey Weinstein and others have caused the City Council of the City of Chicago to make significant changes to its laws in an effort to reduce sexual harassment. As a result of a recent survey of numerous hotels in the Chicagoland Area, which asserts that more than half of the women surveyed were allegedly sexually harassed or assaulted on their job, the Chicago City Council passed an Ordinance with the intent of protecting Hotel Workers.

The new Ordinance, which is a modification of the Municipal Code of the City of Chicago, has two primary components, both of which will require Chicago Hotels to take quick actions.

Questions? Contact Attorney Walter Liszka in our Chicago office at (312) 629-9300 or by email at waliszka@wesselssherman.com
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IRS to Begin Collection Process for ACA's "Pay or Play" Penalties
By Peter E. Hansen 
 
Employers who averaged 100 or more employees over the 2014 calendar year may be receiving a notice from the IRS in the coming months relating to potential penalties for failure to offer affordable coverage to full time employees for the 2015 calendar year, in violation of the ACA's Employer Shared Responsibility Mandate. In brief, employers who met the 100-employee threshold in 2014 were required to do the following in 2015:
  • Offer coverage to all full-time employees (meaning employees who worked 30+ hours/week on average); and
  • Make sure that the offer of coverage was "affordable," meaning that the employee's required contribution for self-only coverage did not exceed 9.56% of his or her income
Sample notices are available online. If you receive anything resembling the notice, you should contact legal counsel as soon as possible - according to the IRS, the deadline to respond to and, potentially, dispute amounts owed under the notices "generally will be 30 days from the date of [the notice]," leaving employers with little time to prepare a defense.

Questions? Contact Attorney Peter Hansen in our St. Charles office at (630) 377-1554 or by email at pehansen@wesselssherman.com

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Editor-in-Chief: 
Nancy E. Joerg, Esq.

Editor:
Sean F. Darke, Esq.