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Paydays, Final Pay and Deductions in Illinois
The IWPCA is the Illinois Wage Payment and Collection Act, found at 820 ILCS 115. It tells Illinois employers when to pay wages and what they may deduct. The Illinois Department of Labor takes wage claims, and employees can sue. For owners planning year-round, paydays, final checks and bonuses sit beside payroll tax deposits. Our checklist is the Payday-Postmark Pass, below. The statute is published at ilga.gov.
The short version
- Illinois employers of any size are covered, while State and federal employees are not.
- Wages paid semi-monthly or bi-weekly are due 13 days at most after the pay period closes. Executive, administrative and professional staff may be paid monthly.
- Final pay, including earned commissions and bonuses, is due at separation if possible; the last allowed date is the next regular payday.
- Underpaid wages bring damages of 5 percent a month, plus fees if the employee sues.
Who it covers
| Group | Covered? | Note |
|---|---|---|
| Every Illinois employer | Yes | Officers and agents count as employers when they knowingly permit a violation |
| State and federal employees | No | Local government and school districts are covered |
| Anyone permitted to work | Employee unless three conditions are all met | Placement agencies differ; the IRS uses another test |
The numbers
| Item | Amount | Year |
|---|---|---|
| Damages for underpaid wages | 5% of the underpayment each month, plus fees in a suit | 2026 |
| Department fee, wages ordered $3,000 or less; $3,000 to under $10,000; $10,000 or more | $500; $750; $1,250 | Since Aug. 1, 2025 |
Source: 820 ILCS 115/14(b)
Since November 2025 a Department of Labor pilot may decline certain claims, among them purely disputed bonus or severance claims. Employees can still sue.
The Payday-Postmark Pass
- Notify new hires of the rate of pay, the payday and the place of payment; announce changes first.
- Check paydays against the 7-day and 13-day limits.
- Write the final-pay routine around the next regular payday.
- Collect written consent at the time of any deduction.
- Check that each pay stub shows hours, rates, deductions, year-to-date totals and gross wages.
What it means for year-round planners
- Final pay includes earned commissions and bonuses, so the year-end accrual in small business basics and the pay date are separate questions.
- Pay stubs are kept 3 years; the IRS says employment tax records go at least 4.
- Payroll tax deposits run on their own clock.
Mistakes people make
- Setting a later "final paycheck" date for a departing worker rather than using the next regular payday.
- Holding the last check until a uniform or tool comes back.
- Forfeiting earned vacation that a contract or policy promised.
A Department of Labor claim, a demand letter, a lawsuit or a dispute over a bonus plan is a reason to call an attorney.
Common questions
How soon must a departing employee be paid?
At the time of separation if possible, and otherwise no later than the next regular payday. Earned commissions, bonuses and vacation that a contract or policy promises are included.
Can an employer deduct for a shortage or an unreturned uniform?
The Department says pay cannot be held for unreturned uniforms or tools, and a shortage deduction needs written consent given at the time.
Are 1099 workers covered?
A person allowed to work counts as an employee unless all three statutory conditions are met, so a 1099 label does not settle it.