Labor and Employment Law Update FAQs: Learn How To Keep Your Company's Greatest Asset – Your Workforce – From Becoming a Source of Liability

Few areas of the law change as often and impact as many people and businesses as employment law. Each year, new and amended statutes, regulations, ordinances, and policies at the federal, state, and local levels alter the rights of workers or expand the obligations of employers.

For business owners, keeping up with the ever-evolving legal framework governing the employer-employee relationship can be a challenging and burdensome task. But failing to understand these changes, and neglecting to update or modify internal policies, practices, and documents accordingly, can have costly and disruptive consequences and expose employers to significant liability.

At Latimer LeVay Fyock, we work with businesses of all sizes and in every industry to advise them of their labor and employment compliance obligations and help them put the structures in place that can protect them from avoidable and damaging errors. While there is no substitute for the guidance of experienced counsel when it comes to addressing the multidimensional complexities of employment law issues, the following are some brief and broad answers to some of the most frequently asked questions we get from employers.

Do I have to provide paid time off to employees?

Yes. Under Illinois state law, as well as Cook County and City of Chicago ordinances, employers with employees in Illinois must now provide paid time off that employees use for any reason (not just sick leave). The City of Chicago ordinance has an effective date of July 1, 2024, but the state law and Cook County ordinance are already in effect. The amount and types of paid time off employees are entitled to vary depending on whether the employer is subject to state, county, or city paid leave laws.

Even if the employer already provides paid time off, additional requirements have been imposed about tracking paid time off, record retention, disclosures to employees, accrual, and allowing the use of paid time off. This means all Illinois employers or employers outside the state with employees located in Illinois need to review their paid time off policies.

If my company is located outside of Illinois but I have remote employees located in Illinois, do I still have to abide by Illinois’ paid leave laws?

Yes. Out-of-state employers must abide by all applicable paid leave laws for any employees that are working while located in Illinois. This is true even if the employee is working from home in Illinois for a company located in another state.

Are non-competition provisions valid and enforceable in Illinois?

It depends on the employee. As we discuss in detail here, the Illinois Freedom to Work Act, signed into law in 2021, dramatically changed the legal landscape for non-competes in the state and significantly limited the circumstances in which they will be considered valid and enforceable. Most notably, non-competes and non-solicitation agreements are completely prohibited for employees below specific income thresholds. Specifically:

• Non-competition clauses are void and unenforceable with respect to employees who have expected annual earnings of $75,000 or less per year.
• Customer/employee non-solicitation clauses are void and unenforceable as to employees who have expected earnings of $45,000 or less per year. 

These baseline earning amounts will increase in 2027 and every five years thereafter. 

For employees earning more than the foregoing amounts, several additional requirements must be met for a non-competition clause to be valid and enforceable. They have to be carefully and narrowly tailored to protect the employer’s “legitimate business interests,” there must be adequate and separate consideration to to support the agreement, and the employee must be given 14 days to review the agreement.  

Illinois employers and out-of-state employers with employees located in Illinois need to review any existing non-compete agreements or provisions to ensure that they remain valid or alter them if need be to comply with the law.

I keep hearing about a biometric privacy law in Illinois. Do I need to do anything about it?

Only if you collect ‘biometric identifiers’ (the most common example being fingerprints for clocking in) from employees or customers. As we discuss in detail here, the 2008 Illinois Biometric Information Privacy Act (BIPA)  imposes several obligations on all private entities regarding the collection, use, safeguarding, handling, storage, retention, and destruction of biometric identifiers and information. If your business does not request or receive such information from employees or customers, there is nothing you need to do regarding compliance with this law.  

One of my employees said I needed to reimburse them for their cell phone plan. Is this true?

Possibly. Under the 2019 Illinois Wage Payment Collection Act, Illinois employers must reimburse employees for ‘necessary and reasonable expenses’ incurred in performing their job duties. If you require that employees use their cell phones for work purposes, then they may be entitled to reimbursement for at least a portion of their cell phone bill. This is also true if you require employees to incur other expenses for performing their job duties. Some other common examples relate to employees using their car for work purposes (other than regular commuting) or purchasing a specific uniform or article of clothing to wear for work.  In such cases, it is advisable for employers to proactively acknowledge that they are requiring employees to make these purchases. By doing so, they can set limitations on the amount of reimbursement if this is part of a written policy provided to employees. 

Keeping Up With Employment Laws Can Be a Full-Time Job. Let Us Take The Laboring Oar.

As noted, these brief answers only scratch the surface of what employers need to know and do to ensure that their greatest asset – their workforce – does not become a source of significant liability. At Latimer LeVay Fyock, our employment law attorneys keep abreast of current and anticipated changes in the law and provide our clients with the information and assistance they need to meet their obligations at every level.

If you have an employment-related question or would like to learn more about how LLF can work with your business on labor and employment matters, please contact one of our employment law attorneys for assistance.