Starting your own business or becoming your own boss can be a dream come true for many people. In the business world, contracts are essential because they outline the work to be performed as well as the prices that must be paid for services. In general, a contract clearly states the expectations of all the involved parties, whether it is for salaried, hourly, or freelance employees. Additionally, these legal documents can protect the parties if those expectations are not met by designating the consequences for any breach in the agreement. When one party does not hold up their end of the bargain, as they say, the other party may take legal action. An experienced business attorney can make sure that all the necessary information is included in a contract to safeguard against disagreements that may affect a business owner’s livelihood. 

Contract Basics

Verbal agreements or simply handshakes are not legally enforceable in the business world, since it can result in a “he said, she said” situation. For example, if a vendor agrees to perform a specific service but the cost is not put in writing, then a business owner may be faced with an astronomical bill or invoice to pay for services rendered. 

Similarly, employee contracts should include a policy manual that states what is and is not acceptable. For instance, the manual should clearly state any dress code, Internet and cell phone use policies, and other important regulations. It should also explain the company’s discipline policy. In most cases, failure to follow the outlined guidelines can lead to the termination of workers. If these issues are not addressed ahead of time, employees may take advantage of business owners by showing up late to work, making personal phone calls, taking long lunches, and more.  

Laws are established for various reasons, mainly to keep citizens safe and provide for a fair society. The state of Illinois has several new laws taking effect in 2021, one of which affects employers and their employees. The minimum wage will increase to $11 per hour for standard workers; $6.60 per hour for tipped workers, and $8.50 per hour for workers under the age of 18 who work less than 650 hours in a calendar year. This new legislation is part of a staggered plan that will eventually raise the minimum wage to $15 per hour by 2025. However, many retailers have expressed concern that they cannot afford this new hourly rate after struggling to stay open during the pandemic. Whether you own a small start-up or a well-established company, it is important to understand the legal consequences for hourly wage violations in Illinois.

A Gradual Increase

Although the wage rate increase for 2021 is meant to assist the entire Illinois workforce, it will gradually increase depending on what part of the state you live in. On July 1, 2021, the minimum wage in Chicago will increase to $15 per hour, or $14.50 per hour for employees at companies with 20 or fewer employees. The minimum wage for tipped workers will increase to $9.00 per hour, and employers are required to make up the difference if the base wage plus tips does not equal $15.00 per hour.

Penalties for Wage Violations

All employers have an obligation to know the minimum wage laws and are required to post the Fair Labor Standards Act provisions in a place where workers can easily read them. If a company pays a worker less than what is mandated by federal minimum wage laws, or neglects to adhere to overtime pay guidelines, the employer may be required to go to court and face maximum penalties. The Wage Payment and Collection Act issued by the Illinois Department of Labor (IDOL) designates when, where, and how often wages are to be paid and prohibits deductions from wages or compensation without a worker’s consent. It is important to note that federal and state government employees are considered exempt and therefore cannot file claims under the Act.

President Trump signed a new stimulus bill into law just after Christmas, releasing another $900 billion in stimulus funds into the economy and preventing a government shutdown. The government would have shut down just before the new year if the President had not taken action. In addition to containing money to fund government operations, the spending package also includes emergency relief money that finances a new round of stimulus checks, unemployment aid, and small business assistance. A qualified employment attorney can help you learn how this new legislation may apply to you and your company, possibly saving your livelihood during this unprecedented time.

Financial Assistance for Struggling Businesses

The new deal from Congress will deliver approximately $900 billion in relief funds in an effort to help families and businesses struggling due to the COVID-19 pandemic. During this round of stimulus checks issued by the U.S. government, Americans will receive up to $600 per person for those earning $75,000 or less per year in addition to $600 for each minor dependent. This is similar to the country’s initial stimulus package months prior.

The relief package also includes an extension of unemployment insurance and a federal unemployment insurance bonus of $300 per week. The economic fallout due to the coronavirus pandemic has negatively impacted small businesses in 2020. In response, Congress has allocated an additional $284 billion in loans for those business owners who are struggling to issue paychecks and cover their business’ rent.

When you own a company, there are federal, state, and local laws you must follow in order to stay in business. Under the Fair Labor Standards Act (FLSA), U.S. employees have the right to receive a minimum hourly wage, in addition to “time-and-a-half” overtime pay when they work more than 40 hours within a seven-day period. It also prohibits the employment of minors in “oppressive child labor” conditions. If business owners do not adhere to these rules and regulations, then workers may file lawsuits against their employers if they can show that the company is in violation. However, the company can defend against such charges as long as they can prove they did not violate any laws. An experienced employment attorney can help employers with providing this “burden of proof” in Illinois.

Potential Violations

There are several ways that a company can be in violation of FLSA rules, such as not paying its workers at least minimum wage or classifying them as non-exempt or contractors when they should be exempt or salaried. In other cases, upper management may use harassment tactics or discriminatory language to intimidate employees into doing certain tasks. The main areas in which an employer can be sued include:

• Wages

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Businesses must follow certain standards and procedures in order to remain open. A class action lawsuit is a legal claim made by employees who are seeking to collectively receive compensation from an employer for the same problem. This type of case can be in response to a faulty or defective product. A collective action is a slightly different procedure used in cases under the Fair Labor Standards Act, the Equal Pay Act, and the Age Discrimination in Employment Act. The Fair Labor Standards Act (FLSA) of 1938 is a comprehensive U.S. labor law that creates the right to a minimum wage and overtime pay when employees work more than 40 hours in a week. It also prohibits the employment of minors in “oppressive child labor.” Companies must uphold these guidelines or risk incurring penalties or legal action.

Class Action

Class action lawsuits may be brought in federal court if the claim pertains to federal law or they meet specific criteria. A class action lawsuit automatically assumes an employee is a part of the affected group unless he or she “opts out.” This can be done by signing a document stating that he or she does not want to participate.

A class action lawsuit is initiated when one or more named plaintiffs file a claim against the defendant(s), all of whom suffered the same injury or damages. Once the complaint is filed, the named plaintiff(s) must file a motion for class certification. The defendants may object to the motion for class certification based on several factors.