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Quinn Signs Law Penalizing Employers Who Shortchange Workers

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CHICAGO — Employers who shortchange or don't pay their employees will face stiffer penalties and workers will have more rights under a bill Gov. Pat Quinn signed into law Friday, which experts say makes Illinois' wage theft laws among the strongest in the country.

Starting Jan. 1, a repeat offense will be considered a felony, not a misdemeanor. Also, employers who violate wage theft laws will have to pay workers back from the date of nonpayment with interest and a $250 fine. Depending on the violation, the employer may also owe interest to the Illinois Department of Labor.

"This protects all workers," said Ana Guajardo, director of Centro de Trabajadores Unidos, a workers center in Chicago. "Here in Illinois, we're not going to take this anymore."

The law also gives the department more oversight in dealing with the 10,000-plus wage theft claims it gets annually. Instead of referring claims to the Illinois Attorney General, the Department of Labor will be able to directly adjudicate claims of $3,000 or less, which make up most of the claims.

The department will set up a fund – with interest paid to the department – solely for dealing with wage theft issues. The agency will likely add more staff, like administrative law judges. But those changes will depend on funding, according to the agency's director Catherine Shannon.

"All too often employers ignore our order to pay penalties," Shannon said. She said the law gives the department more enforcement capabilities and speeds up the process.

The law also provides some worker protections, like anti-retaliation provisions.

Chris Williams, executive director of the Worker Hands Legal Clinic in Chicago, said the law particularly benefits those who are most vulnerable: low-wage, temporary and immigrant workers.

Low-wage workers are often paid in cash, making record-keeping difficult, and some immigrant workers who may not have legal status fear retaliation with a call to immigration authorities.

"It really helps these folks who are working in the underground economy," he said. "It's got a deterrent effect for employers."

Wage theft has been an increasing problem in the downturned economy, according to worker centers nationwide. In absence of sweeping federal legislation, many states and municipalities have taken matters into their own hands. Earlier this year, Miami-Dade County passed an ordinance to combat wage theft, making it easier for workers to bring legal action against employers. San Francisco has a similar ordinance.

The new law puts Illinois with a group of states that have recently beefed up their wage theft laws. They include Massachusetts, New Mexico and New York.

"It's really innovative," said Ted Smukler, public policy director at the Chicago-based Interfaith Worker Justice group.

Smukler and other experts say the challenges are seeing how well the new laws are enforced.

About 68 percent of low-wage workers reported wage theft in 2008, regardless of citizenship status, according to a study last year that was among the first extensive review in years. Conducted partly by the University of Illinois at Chicago, it surveyed 4,400 low-wage workers in major U.S. cities.

A smaller study published by UIC researchers this year showed Cook County loses $7.3 million each week because of violations of minimum wage and overtime laws. The study surveyed more than 1,000 workers in industries including retail, child care and housekeeping.