Thomas Stilp, JD, MBA/MM, LLM, MSC
Proving many people in Illinois government never had to meet a payroll or work under the uncertainties of business, the Illinois Department of Labor (IDOL) has now prohibited “use it or lose it” vacation policies.
A “use it or lose it” vacation policy encourages employees to take vacation every year, a proven healthy practice.
These policies help the employees keep their sanity by taking time off each year, and the policies help employers avoid disruption to business with long periods where key people may be out.
According to the IDOL: “An employer cannot effectuate a forfeiture of earned vacation by a written employment policy or practice of the employer.” 56 Ill. Admin. Code §300.520(h)
The new IDOL regulation will require employers to cap vacation to reflect that vacation ceases to accrue after an employee’s unused vacation time reaches a certain number of days.
There is also new record keeping requirements for employers on vacation: “Any employer that provides paid vacation to its employees must maintain for a period of not less than 3 years . . . . records of the number of vacation days earned for each year and the dates on which vacation days were taken and paid.” 56 Ill. Admin. Code §300.630(a).
The Department of Labor Will Enforce Agreements Against Employers
Those of us who handle a lot of litigation have always advised clients to “put it in writing.”
There are very good practical and legal reasons to “put it in writing.”
It is said that “50% of the people get 50% of the message 50% of the time” – that’s 12.5%.
Practically, statements in writing are not subject to errors in memory, narration, or credibility – the proponent of the message simply needs to produce a copy of the written statement in a document to prove what was said.
Legally, statements in writing are not subject to many defenses such as the parol evidence rule, statute of frauds, and others that bar enforcement of oral agreements.
Not any more – the IDOL will now enforce unwritten agreements: “An agreement may be reached by the parties without the formalities . . . of a contract and may be manifested by words or . . . conduct, such as past practice. Company policies and policies in a handbook create an agreement even when the handbook or policy contains a . . . . provision disclaiming the handbook from being an employment contract . . . or an enforceable contract . . . An agreement exists even if [it] does not include a specific guarantee as to the duration of the agreement or even if one or either party reserves the right to change the terms of the agreement.” 56 Ill. Admin. Code §300.450.
Illinois Department of Labor Expanded Enforcement and Personal Liability Against You
If you’re the boss, you’re liable (at least according to IDOL).
Perhaps not surprisingly, the new regulations expanding employee rights would go hand-in-hand with expanded IDOL rules on enforcement.
More people can be held individually liable for violations of the Act. Personal liability now includes liability for “any person who acts directly or indirectly in the interest of the employer.” 56 Ill. Admin. Code §300.620(a). Persons facing individual liability include:
- Persons who maintain a decision – making role concerning employment or payment of employees
- Persons who held significant ownership in the employer
- Persons who exercised operational control over the employer’s day-to-day functions, including compensation and supervision over employees
- Persons involved in the decision to continue operations despite financial adversity during a period of nonpayment
56 Ill. Admin. Code §300.620(a). Under the new regulations, employers must respond promptly to strict deadlines when notified of a claim under the Act.
An employer’s failure to respond within the new 20-day period will cause “all material allegations contained in the claim [to] be deemed admitted to be true” on the 21st day following notice to the employer. 56 Ill. Admin. Code §300.941(a), (c). Ouch!!
Now more than ever employers need good legal representation to avoid the ever-growing technical traps under Illinois law.