Tag: Employment Obligations

Recent Changes in Illinois Law Will Place Additional Burdens on Employers

In 2018, Governor Bruce Rauner signed into law a number of changes that are already in effect or will go into effect starting January 1, 2019. As with each New Year, it is important to reflect on those changes and how they impact your business.

Amendments to the Illinois Wage Payment and Collection Act

As of January 1, 2019, all employers will be required to reimburse its employees “for all necessary expenditures or losses incurred by the employee within the employee’s scope of employment and directly related to services performed for the employer.” 820 ILCS 115/9.5. The act defines “necessary expenditures” as “all reasonable expenditures or losses required of the employee in the discharge of employment duties and that inure to the primary benefit of the employer.”

To be reimbursed the employee shall submit a request for reimbursement, along with all appropriate supporting documentation within 30 days. This deadline can be extended pursuant to a written expense reimbursement policy. If the employee does not have supporting documentation, a signed statement regarding the expense will be sufficient.

Employees, however, will not be entitled to such reimbursements if: (1) the employer has an established written expense reimbursement policy and (2) the employee failed to comply. In addition, an expense need not be reimbursed unless it was authorized by the employer or was authorized pursuant to a written expense reimbursement policy. The employer may also put limits or caps on its reimbursement policy provided it is not de minimis or eliminates any reimbursements.

What Should Employers Be Doing? Work with your Illinois Employment Labor attorneys to do an annual review and check of your policies regarding expense reimbursements. It will be critical for all employers to have a policy so that there is adequate cost containment. Many employers will need to evaluate reimbursing its employees for cell phones, gas, and other expenditures they are required to incur for purposes of performing their job.

Nursing Mothers Must be Paid

As of August 21, 2018, nursing mothers in Illinois within one year after the child’s birth must be given “reasonable break time” to express milk and an employer “may not reduce an employee’s compensation for time used for the purpose of expressing milk or nursing a baby.” 820 ILCS 260/10.

What Should Employers Be Doing? Review your handbooks and policies to ensure new mothers understand that they are entitled to express milk as needed and that they are not being docked any pay for doing so.

Amendments to the Illinois Human Rights Act

On August 24, 2018, the Illinois Human Rights Act (“IHRA”) was amended in three meaningful ways. Some of the changes went into effective immediately, while others go into effect on January 1, 2019.

1. The amendments extended the deadline to file a charge of civil rights violations from 180 days to 300 days from the date of the alleged violation of the IHRA. The EEOC and IHRA deadline requirements are now the same in Illinois.

2. As of January 1, 2019, the Illinois Human Rights Commission composition will change from 13 part-time members to 7 full time members. This is expected to expedite matters before the Commission and reduce the number of cases pending before the Commission.

3. The Illinois Department of Human Rights (“IDHR”) is required within 10 days of a new charge, to notify the complainant that they have the right to opt-out of the investigation process and immediately receive the right to file a suit in circuit court. Once granted by the IDHR, the complaint must file suit within 90 days in circuit court.

What Should Employers Be Doing? Employers should expect a steady increase in claims filed before the IDHR. Previously, if an employee filed at the EEOC after 180 days it was not concurrently filed at the IDHR. So long as it is timely filed before the EEOC it will also be timely filed before the IDHR. Additionally, charges that are dismissed quickly at the EEOC may still be pursued at the IDHR that would have otherwise never been refiled.

The opt-out procedures will lead to aggressive plaintiff attorneys avoiding the investigation process entirely and filing suit as quickly as possible, increasing costs and the burden to defend these claims. Employers should continue to work closely with counsel to evaluate all terminations and be prepared to defend any claims that may get filed quickly in state court.

Levin Ginsburg has been working with employers for approximately 40 years to help them protect their businesses. If you have any employment or other business related issues, please contact us at 312-368-0100 or email Walker Lawrence at wlawrence@lgattorneys.com

Successor Liability-Beware

Often, buyers are advised to buy the assets of a business that is for sale, not the ownership interests.  That is based on the general principle that if you buy the assets of a business, then you are not liable for the business’s obligations unless you expressly agree to satisfy obligations.

However, an exception to this general rule is founded upon “successor” liability.  That is, if the buyer’s newly formed business can be found to be a successor of the seller’s business, then the buyer’s business may be found to be liable for the obligations of the seller’s business.  Such liability can be for the seller’s taxes, employment obligations and even union liabilities.

A recent case in California found that the buyer who set up a new business was a successor employer and therefore liable for the withdrawal liability of a prior business under the Multiemployer Pension Plan Amendments Act.  In this situation, the “buyer” only purchased certain assets of the “seller” at a public liquidation sale but was found to be liable for some of the “seller’s” liabilities.

The prior business, Studer’s Floor Covering, Inc. (“Studer’s”) was in the construction industry.  It ceased doing business on December 31, 2009.  At that time, it was party to a collective bargaining agreement, pursuant to which it made contributions to a multiemployer defined benefit pension plan (the “Fund”).

The owner of Studer’s announced to its sale staff that Studer’s would go out of business in a couple of months.  A member of Studer’s sales staff formed a new company (“Michaels”) two months prior to Studer’s going out of business. Michaels obtained a lease for the same storefront Studer’s operated its business, effective January 1, 2010.  Michael put up a sign “Michaels/Studer’s” on the storefront, obtained the same telephone numbers and purchased 30% of Studer’s tools, equipment and inventory at a public liquidation sale.  He did not obtain the customer list since the owner had personal knowledge of most customers.  Michaels employed eight installers (of whom five had been Studer’s employees) and used mainly independent contractors.

The Appellate Court held that the court should consider “continuity of the workforce” as a major factor.  Continuity could be found to exist if a majority of the new employer’s employees were employees of the old employer.  The court held that the changes in ownership here did not affect successor liability.  An important factor was substantial continuity as measured by customer retention.  The Court also was swayed by the new business using the same telephone numbers, the same location and the sign that incorporated the name of the prior business.

Where putative successors do rely on insider knowledge, similar public presentation (signs, location) to corner their predecessor’s market store, and have a continuity of the work force, courts may find the successor doctrine to apply.  New businesses that are concerned about the liabilities of the prior businesses should carefully consider these factors.

Levin Ginsburg has represented and provided counsel for many buyers and sellers of businesses.  If you have any questions regarding successor liability or any other aspect of your business, please contact:

Morris R. Saunders at:

msaunders@lgattorneys.com or 312-368-0100.

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