Small businesses – especially the ones that are just starting out – must be mindful of their budget. Unfortunately, many are not quite prepared for the wide range of expenses and legal complexities. Workers’ compensation insurance. Taxes. The list goes on and on. Let one area slip, and the company could face penalties. One example is when companies fail to comply with Illinois’ minimum wage laws. Before you hire an employee, take the time to understand the law and what compliance looks like under it.
Minimum Wage Law Basics
A recently proposed bill may begin a transition to $15 an hour, but right now, employers are only required to meet the current minimum wage of $8.25 per hour. Paying employees any lower than this amount is considered a violation of the minimum wage law. Unfortunately, paying that amount does not necessarily keep your company out of trouble; there are other, more complex laws to account for as well.
For starters, employers are required to pay their employees overtime pay when they meet the requirements. If an employee is terminated, they must be paid any commission, unused vacation pay, bonuses, and wages by the next regularly scheduled payday. If you need to reduce an employee’s wages (only possible if the employee makes more than minimum wage), you must provide them with adequate notice before cutting their wages. All of that is just the beginning; to ensure you are compliant with all the various aspects of the minimum wage laws, be sure to seek help from an experienced attorney.
Consequences of Violating the Law
At first glance, it might not seem like a big deal if you violate the minimum wage laws. Unfortunately, nothing could be further from the truth. Failing to comply can make your company liable for more than just the unpaid wages of your employee; you also become subject to a damages fee that accrues at two percent per month from the time of the underpayment. Employers who are found in violation are also penalized via an administrative fee, penalty fees, and they may even be required to cover any expenses that the employee experienced while pursuing their claim.
Avoid Non-Compliance and Seek Help with Violations
Whether you need assistance with ensuring that your company is compliant in its pay structure, or have mistakenly violated the law and need representation, Miller Law Firm, P.C. can help. Skilled and experienced, our Schaumburg, IL small business attorney will fight to preserve your company’s best interests, regardless of the situation. Schedule your consultation to learn more. Call 847-995-1205 today.