In Chicago: Lose Your Case, Lose Your License

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In an interesting development — which I’m sure many employers hope doesn’t spread to other parts of the country — the Chicago City Council has enacted an amendment to the Municipal Code of Chicago authorizing stiff (some might say “draconian”) penalties against companies found guilty of violating wage and hour laws.

Ordinance 2012-5233, passed unanimously on January 17, provides an employer found guilty of violating wage and hour laws may lose its business license. The ordinance will take effect in just a few weeks, so the time is growing short for Chicago employers to get their house in order.

Specifically, the ordinance provides that the Commissioner may deny an application for any license or revoke or suspend a license previously issued if, during any five year period beginning June 1, 2013, the applicant or licensee “has been found guilty or liable in any judicial or administrative proceeding of committing or attempting to commit a willful violation or two or more violations which do not include a willful violation,“ of the Illinois Wage Payment and Collection Act or any other federal or state wage payment law.

And it doesn’t have to be through a court case, either. The law also applies to administrative agency findings — such as a Department of Labor wage and hour audit.

Also, according to at least some legal observers, the wording of the law could make it possible to pursue action against Chicago-based companies for wage and hour violations that occurred at locations in other parts of the country.

If you’re a Chicago-area employer, it’s probably a good time to consult with your employment law advisor about scheduling a wage and hour audit. Inadvertent violations may still happen, but it’s more important than ever to be able to prove they were not willful.

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