Illinois Deductions from Pay laws & HR compliance analysis

Illinois Deductions from Pay: What you need to know

Employers may make deductions from employees' pay only if the deductions are (IL Comp. Stat. Ch. 820 Sec. 115/9):
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• Required by law (such as state and federal taxes and Social Security contributions);
• For the benefit of the employee;
• In response to a valid wage assignment agreement or wage deduction order; and
• Made with the express written consent of the employee.
An advance on wages may be repaid through payroll deductions only when both the employer and employee have signed a prior written agreement specifying the amount of the advance, a repayment schedule, and the method of repayment (IL Admin. Code Tit. 56 Sec. 300.750). The repayment schedule may not call for a deduction of more than 15 percent of the employee's gross wages per paycheck (IL Admin. Code Tit. 56 Sec. 300.800). However, if upon termination the employee owes an amount that is more than 15 percent of his or her gross wages, that amount may be withheld from the final paycheck, but only if such an arrangement was specifically included in the prior agreement (IL Admin. Code Tit. 56 Sec. 810).
Unearned vacation pay. If an employer lets an employee take vacation that has not yet been earned, and the employee terminates employment, the employer may not deduct the unearned pay from final compensation unless there is a written agreement as required for deduction of cash advances (IL Admin. Code Tit. 56 Sec. 300.760).
Tuition advances. An employer may not deduct tuition advances from wages or final compensation unless there is a written agreement as required for deduction of cash advances (IL Admin. Code Tit. 56 Sec. 300.770).
If the employer makes an overpayment of wages to an employee and the employee ...

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