The first of the year often means New Year’s resolutions for many people. In Illinois, the first of the year also often means new laws and amendments to existing laws that were voted in by state lawmakers and signed by the governor go into effect. That is exactly the case with Senate Bill 672 (SB 672). This new law – which takes effect January 1, 2022 - amends the Illinois Freedom to Work Act, specifically in the area of noncompete and nonsolicitation agreements.

The Illinois Freedom to Work Act

The Illinois Freedom to Work Act, which went into effect in January 2017, stated that employers were barred from requiring “low-wage” employees to enter into noncompete agreements. The law also stated that these agreements would be deemed illegal and void.

In the original law, a low-wage employee was classified as any employee who earned the greater of the following categories:

In the best of circumstances, a parent who is ordered by the court to pay child support obeys that order and meets that obligation according to the schedule set by the court. Unfortunately, there are many parents who – for a variety of reasons – do not make their payments and an arrearage begins to build up. In these situations, the parent who is not receiving the payments can request the court to garnish the non-paying parent’s wages. In most situations, the court agrees, and a wage garnishment order is issued. In these cases, what are the obligations of the employer and what happens if the employer fails to comply with the order?

Wage Garnishment Process

When a parent petitions the court for wage garnishment of the employee who is not making their child support payments, that garnishment can address both back payments the employee may owe, as well as current and ongoing payments. It can also include any interest the employee owes. The court can order that up to 50 percent of the employee’s wages can be deducted from their checks each pay period. If there are no other obligations of child support the employee has for other children, then the court can order up to 60 percent of the employee’s pay can be deducted. The court can also order an additional five percent of the wages garnished if the employee is more than three months behind in their obligation.

Earlier this month, Governor JB Pritzker signed an executive order that prevents any company that contracts with the state of Illinois from paying disabled workers less than the minimum wage. The current minimum wage in Illinois is $11 per hour and $6.60 per hour for tipped workers. When signing the order, the governor said that his action was also geared to pushing Congress to change the federal law that currently allows companies to pay disabled people less than the minimum wage.

Does Your Company Contract with the State?

According to the order, any vendor that currently pays a wage that is below the minimum will be required to renegotiate their contracts with the state. However, the governor did state that his order will not cost any worker who is being paid a subminimum wage their job. Instead, the state will work with their employers to make sure these companies will be able to keep providing disabled people with meaningful work opportunities while earning standard pay.

Currently, federal law allows employers to file for certification in order to hire people who are disabled and pay them at a subminimum wage. This law was passed in 1938 with the purpose of providing a temporary initiation for disabled people to enter the workforce. However, the law has never been updated.

On August 13, 2021, Illinois Governor J.B. Pritzker signed into law an amendment to the Illinois Freedom to Work Act (820 ILCS § 90), which imposes restrictions on the use of non-competition and non-solicitation (employee and customer) restrictive covenants for Illinois employees. The law takes effect on January 1, 2022, and only applies to restrictive covenants entered into after January 1, 2022.

Below are some of the key provisions of the law:

• The law prohibits employers from entering into non-competition agreements with employees who earn $75,000 per year or less and also prohibits employers from entering into non-solicit agreements with em­ployees who earn $45,000 per year or less.

• For non-compete agreements, the salary threshold amounts will increase every five years by $5,000 until January 1, 2037, when the amount will equal 590,000. For non-solicit agreements, the salary threshold amounts will increase every five years by $2,500 until January 1, 2037, when the amount will equal $52,500.

• Employers will now be required to advise employees to consult with an attorney before entering into a non-compete or non-solicit agreement and must also provide employees at least 14 days to review the agreement and decide whether to sign. Employees have the option of signing the agreement before the 14-day period has ended.

• Employers are prohibited from entering into restrictive covenants with employees who have lost their jobs due to the COVID-19 pandemic or under circumstances that are similar to the COVID-19 pandemic unless enforcement of the covenant not to compete includes compensation equivalent to the employee's base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment during the period of enforcement.

• If an employee prevails on a claim filed by an employer seeking to enforce a covenant not to compete or a covenant not to solicit, the employee can recover all costs and reasonable attorney’s fees from the employer regarding such claim. A court or arbitrator may also award appropriate relief.

Illinois employers should revisit their restrictive covenant agreements in light of these changes.

In June, the Chicago City Council voted yes to a new ordinance that addresses sick leave and wage theft protections for people who work in the city. This new ordinance is in addition to another new ordinance our firm discussed in a prior post regarding the minimum wage change Chicago enacted and the potential penalties for violations.

New Law

The ordinance, SO2021-2182, applies to any business that employs four or more employees. If the employee is a domestic worker, then the law applies to businesses with one or more employees. The new ordinance is for any employee who works two or more hours within the city limits of Chicago during any two-week period. 

Under the new ordinance, which went into effect July 1, employees can use their paid sick leave for the following reasons: