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2020 Illinois Small Business Employment Law Update

Updated: Apr 1, 2020

If you own a small business in Illinois and you're wondering what your employment law priorities should be for 2020, look no further than this checklist Neil has been presenting to organizations in and around the Chicago area.


2020 Illinois Employment Update - Checklist of Items for

Small Businesses to Think About

A. Update Policies Concerning Cannabis Possession and Use, as well as pre-employment and post-employment drug-testing policies. The Cannabis Regulation and Tax Act (“CRTA”) and the Right to Privacy in the Workplace Act are creating anxiety for employers throughout Illinois. It is best to think through your policies and practices -- AND TO TRAIN YOUR SUPERVISORS -- before the next incident involving one of your employees arises.

B. Take a New Look at Your Employment Policies and Practices. The Illinois Human Rights Act (“IHRA”) has been extended to apply to all Illinois employers (not just those with 15 or more employees as in the past). This means that even the smallest employers need to start paying attention to the possibility of each and every employment action they take, leading to a discrimination suit. Add to this the momentum and publicity created by #MeToo and similar movements, and “I’m too small to have to worry about that” is a recipe for financial and organizational disaster. This means taking a careful look at the entire lifecycle -- from hiring, to evaluation, compensation, promotions/demotions and discipline/terminations, with a goal of minimizing the likelihood of potentially ruinous claims.

C. It’s Time to Do Some Serious Sexual Harassment Training. In that same vein, for years your lawyer may have been telling it’s a “good idea” to perform sexual harassment training - now in Illinois (and many other states) it’s legally required. Special additional rules also apply to the hospitality industry. (E.g. the policies must be in both English and Spanish and provided in the first week of employment.) Statutory penalties can be as high as $5,000 per violation, so this is something employers need to take seriously.

D. Make Sure Your Contractors are Really Contractors. The penalties for misclassifying employees as contractors (i.e. not giving them W-2s) can be quite severe, and there are many ways an employer can get caught. There has been an increasing amount of “noise” on this topic at both the State and Federal levels. If you’ve never done an analysis to assess the validity of your classifications and the pros and cons of maintaining them, 2020 would be a good time to do it.

E. Take Another Look at Your Non-Competes. Many states have adopted new statutes on such agreements, and court-made law in Illinois continues to evolve. You should regularly review these agreements (both new ones and any existing agreements you’re hoping to enforce) to ensure they are as enforceable as legally possible.

F. Do the Same With Your Employee Handbook. At a minimum your handbook should be updated to reflect the 2020 statutory changes, and if it’s been more than a year or two since your handbook was written, then a more comprehensive review is almost certainly warranted.

G. Take a Look at Your Employment Postings. These days it seems every new statute and ordinance includes a posting requirement. (Warning - you might need to buy a bigger bulletin board.) Note that it can also be a useful exercise to compare what your postings say, to what appears in your handbook to make sure they are consistent.

H. Update Your Settlement and Severance Agreements. If you’re using a form severance agreement for separating employees, then it needs to be brought into compliance with the Workplace Transparency Act (“WTA”), which went into effect on 1/1/20. This is especially important if you want to impose confidentiality restrictions on employees in return for severance pay (or for a settlement of a disputed claim).

I. Beware of IBIPA. The Illinois Biometric Information and Privacy Act (“IBIPA”) imposes draconian penalties on companies that collect biometric data without jumping through all of the statutory hoops -- something Google is currently finding out the hard way. Talk to an attorney about this if you are collecting any such data, even if it’s something you think is innocuous, like a fingerprint reader to get in the front door.

J. Take a Close Look at Your EPL coverage. Despite its potentially enormous importance, many employers continue to view Employment Practices Liability (EPL) coverage as an afterthought. Give careful consideration to your coverage limits, retention, and also what is/isn’t covered. This is even more important for small employers in light of the changes to the IHRA mentioned above.

The information that appears on this website is for general use only. It is not legal advice. Please contact Neil for a free consultation if you would like more information or if you are seeking advice tailored to your specific situation and needs.

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