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October 9, 2024Client Alert

Illinois Employment Law Update Series: 2025 Brings Expanded Pay Stub Requirements and New Obligations Regarding Production of Employee “Personnel Records”

It is a busy time for employment-related legal updates in Illinois, with Governor J.B. Pritzker recently approving various laws that expand employee protections and add new obligations for employers.

This Client Alert is part of a seven-part series discussing laws Illinois employers need to consider as we move toward 2025. Those laws include:

  • amendments to the Illinois Day and Temporary Labor Services Act, which modify and build on 2023 amendments regarding equal pay and benefits for temporary workers (effective 8/9/24) (Client Alert here);
  • amendments to the Illinois Human Rights Act expanding the statute of limitations to 2 years and adding new protected classes (effective 1/1/25) (Client Alert here);
  • amendments to the Illinois Human Rights Act, which prohibit the discriminatory use of artificial intelligence and require employer notice of AI use in the workplace (effective 1/1/26) (Client Alert here);
  • amendments to the Illinois Equal Pay Act governing pay transparency in job postings (effective 1/1/25) (Client Alert here);
  • amendments to the Illinois Wage Payment and Collection Act, which expand pay stub requirements (effective 1/1/25);
  • expanded scope of documents and protections under the Illinois Personnel Records Review Act (effective 1/1/25);
  • a new Illinois Worker Freedom of Speech Act, which protects employees who decline to participate in certain employer-sponsored meetings on religious or political matters (effective 1/1/25) (Client Alert here);
  • amendments to the Illinois Biometric Information Privacy Act, which limit damages for BIPA violations, among other things (effective 8/2/24) (Client Alert here); and
  • amendments to the Illinois Right to Privacy in the Workplace Act, which regulate employer use of E-Verify and similar systems (effective 1/1/25).

Stay tuned for our final alert in this series, which will be released soon.

Pay Stub Requirements Added to Illinois Wage Payment and Collection Act

Effective January 1, 2025, Public Act 103-0953 amends the Illinois Wage Payment and Collection Act (IWPCA) to create new employer obligations regarding the content, preservation, and production of Illinois employees’ “pay stubs.” In particular, the new law:

  • Specifically defines “pay stub” to mean an itemized statement (or statements) that includes an employee’s (1) hours worked, (2) rate of pay, (3) overtime pay, (4) overtime hours worked, (5) gross wages earned, (6) wage deductions, and (7) total wages and deductions year to date. Employers must provide Illinois employees with pay stubs satisfying these requirements each pay period.
  • Requires employers to maintain copies of employees’ pay stubs for at least 3 years after the date of payment – even if an individual’s employment ends during that 3-year period and regardless of whether employees receive their pay stubs electronically or in paper form. Employers who are creating or updating their record retention policies should keep in mind that the Illinois Equal Pay Act separately requires employers to maintain payroll records, specific information regarding employees’ job positions and compensation, and other wage-related personnel and business records for at least 5 years.
  • Requires employers to provide current and former employees with copies of their pay stubs, upon request, within 21 calendar days of the request. Employers are not required to comply with current or former employees’ requests for such copies more than twice in a 12-month period. In addition, employers are not required to provide former employees with copies of their pay stubs if more than one year has passed since the former employee’s separation date.
  • Imposes new obligations on employers whose electronic payroll systems do not allow former employees to access their pay stubs for at least a full year after their separation date. If that situation exists, employers must: (1) offer to provide a departing employee with a copy of all the employee’s pay stubs for the year preceding the employee’s separation date; (2) extend this offer to the departing employee by the end of the employee’s final pay period; and (3) record, in writing, the date on which the employer made this offer to the departing employee and if and how the departing employee responded to the employer’s offer.

Notably, a new remedy provision in the amended IWPCA provides that employers who fail to comply with these pay stub requirements are subject to a civil penalty of up to $500 per violation, payable to the Illinois Department of Labor.

Significant Changes to the Illinois Personnel Records Review Act

For many years, the Illinois Personnel Records Review Act (IPRRA) has given Illinois employees broad access to review “any personnel documents” their employer is using, has used, or intends to use in determining the employee’s qualifications for employment, promotion, transfer, compensation, discharge, and other discipline (unless such documents are subject to one of the IPRRA’s exceptions). Effective January 1, 2025, Public Act 103-0727 amends the IPRRA to significantly broaden the scope of records available to employees under the IPRRA. The amended IPRRA also specifies certain procedures employees must follow to request such records. These and other changes, which will impact both employers and employees, are described in more detail below.

Expanded Scope of “Personnel Records” Available to Employees

Significantly, the amended IPRRA broadens the scope of personnel records available to employees under the IPRRA, expressly allowing employees to inspect, copy, or receive copies of the following:

  • any personnel documents used to determine the employee’s qualifications for benefits, a category that was added to the existing language (described above) regarding an employee’s right to access documents related to their qualification for employment, promotion, transfer, compensation, discharge, and other discipline;  
  • any employment-related contracts or agreements the employer contends are legally binding on the employee;
  • any employee handbooks the employer made available to the employee or that the employee acknowledged receiving; and
  • any written employer policies or procedures the employer contends the employee was subject to and that concern qualifications for employment, promotion, transfer, compensation, benefits, discharge, or other disciplinary action.

Despite the broader scope of documents now available to employees, the amended IPRRA still requires employers to respond to employees’ personnel records requests within a short period of time, although it clarifies how certain days should be counted. Specifically, under the amended IPRRA, employers must comply with an employee’s IPRRA request within 7 working days after the employer’s receipt of the request. Employers may take an additional 7 calendar days to comply if they can reasonably show the initial deadline cannot be met.

If some or all of the personnel records requested are already accessible to the employee, the amended IPRRA includes a new provision that allows the employer to provide the employee with instructions on how to access that information in lieu of providing copies to the employee. Employers are not required to grant an employee’s request for documents under the IPRRA more than two times during a calendar year.

New Exception for Trade Secrets and Certain Proprietary Information

An employee does not have a right to documents covered by the IPRRA if the document falls within one of the IPRRA’s exceptions, including a new exception in the amended IPRRA that covers “employer’s trade secrets, client lists, sales projections, and financial data.” This new exception is a welcome addition to the IPRRA’s existing list of exceptions, which includes letters of reference; test documents; personal information about third parties when disclosure would be a clear and unwarranted invasion of the third party’s privacy; certain investigatory or security records that have not been used as a basis for an employer’s adverse action against the employee; staff planning documents regarding development, expansion, closing, or operational goals (unless such documents are, have been, or are intended to be used to make decisions about the requesting employee); records available in discovery if a pending claim already exists; and records that are not maintained by the employer.

New Clarification Limits Costs Employers Can Charge to Employees

Although employers may continue to charge employees the actual cost they incur for copying a requested record, the amendments clarify that such costs may not include “the imputed costs of time spent duplicating the information, the purchase or rental of copying machines, the purchase or rental of computer equipment, the purchase, rental, or licensing of software, or any other similar expenses.”

New Procedures Related to Employees Requests for Records

The amended IPRRA includes new procedures related to employees’ requests for personnel records, including the following:

  • Employers still may require employees to make their requests for personnel records and documents in writing; however, “written request” is specifically defined in the amended IPRRA to include electronic communications such as email or text messages.
  • The amended IPRRA deletes existing language that expressly allowed employers to require employees’ use of an employer-supplied form to request records. However, new language provides that an employee’s written request for personnel records must include: (a) what personnel records the employee is requesting or if the employee is requesting all of the records allowed under the IPRRA; (b) if the employee is requesting to inspect, copy, or receive copies of the records; (c) whether the employee is seeking hard copies or electronic copies of the requested records; and (d) whether the inspection, copying, or receipt of copies will be conducted by an employee representative (e.g., family member, lawyer, union representative, or translator). In addition, if the employee is requesting medical information or medical records, the employee must include a signed waiver allowing the employer to release medical information and records to the employee’s specific representative.
  • The amended IPRRA also requires employees to make requests for personnel records to “a person responsible for maintaining the employer’s personnel records, including the employer’s human resources department, payroll department, the employee’s supervisor or department manager, or to an individual as provided in the employer’s written policy.” In light of this language, employers should review relevant policies they already have in place regarding personnel file requests (if any) and consider modifying or adopting a policy that instructs employees to direct any request for their personnel records to the employer representative designated in the employer’s policy.

Increased Options for Employee Litigation

The IPRRA’s requirements are administered and enforced by the Illinois Department of Labor (“IDOL”). In addition to the IPRRA’s existing enforcement mechanisms and remedies, the amended IPRRA allows employees to file a state court action against their employer if the IDOL fails to resolve the employee’s administrative complaint within 180 days or if the IDOL certifies in writing that it is unlikely to be able to resolve the employee’s complaint within 180 days. In other words, an employee is not required to wait for the IDOL’s final decision on their administrative complaint and/or the results of any IDOL conciliation efforts before the employee can commence their own action. This change could result in increased court litigation over alleged IPRRA violations.

Conclusion

We recommend that employers with any Illinois-based employees begin preparing for the IWPCA’s new requirements regarding the content, preservation, and production of pay stubs.

Similarly, we recommend that employers consider reviewing their existing policies and procedures to ensure they have a process in place to promptly respond to employees’ requests for personnel records under the broader scope of records allowed by the amended IPRRA.

Please reach out to your MBF attorney to further discuss these issues.

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