Unemployment Insurance Law Summaries
Illinois, Unemployment Insurance Law Summaries
Illinois's unemployment insurance law is located in the 1991 Illinois Revised Statutes, Chapter 48, Secs. 100 to 3200, as amended; and in the Rules of Labor and Employment, Part 2712, Secs. 2712.100 to 2960.260. The full text of the law is available at Unemployment Insurance Reports UI-IL ¶4001 .
DEFINITIONS
“Employer” means one who paid wages of at least $1,500 in any calendar quarter in either the current or the preceding calendar year, or employed at least one individual for some portion of a day within each of 20 or more calendar weeks within either the current or the preceding calendar year. Generally, an employer subject to the federal law is also subject to the Illinois law.
“Employment:” Service performed by an individual for an employing unit, including service in interstate commerce, service on land owned, held, or possessed by the U.S., and services performed by an officer of a business corporation, with certain exceptions, listed below. Service performed by individual for an employing unit is deemed employment unless and until it is shown that such individual is:
free from direction or control;
performing such service outside usual course of employer's business or outside all places of employer's business; and
engaged in independently established trade or business.
Generally, employment subject to the federal law is automatically subject to the Illinois law.
Exceptions from employment are listed below.
“Wages” means all remuneration for personal services, including salaries, commissions, bonuses, reasonable money value of remuneration in any medium other than cash, gratuities customarily received by an individual in the course of the individual's work from persons other than the individual's employer, provided the individual reports the gratuities to the employer (the fact that the employee reports tips for FICA purposes does not of itself make such tips wages under the Illinois law), vacation pay, and wages subject to the FUTA, except remuneration over $12,300 for 2009 paid by an employer to an individual in a calendar year, counting remuneration paid by employer's predecessor and for service in another state. For calendar year 2010 and each calendar year thereafter, the term “wages” includes only the remuneration paid to an individual by an employer during that period with respect to employment that does not exceed the sum of the wage base adjustment applicable to that year, plus the maximum amount includable as wages with respect to the immediately preceding calendar year. Unless otherwise provided, the maximum amount includable as “wages” may not be less than $12,300 or greater than $12,960 for any calendar year after 2009. If wage limit is raised for FUTA purposes, Illinois law provides for a corresponding increase (Sec. 235).
Other exceptions from wages are listed below.
COVERAGE
Generally, employment subject to the federal law is automatically subject to the Illinois law. Exceptions from coverage are listed below.
Agricultural and domestic employers.- Agricultural and aquacultural labor is covered if performed for an employer who employed 10 or more individuals in such labor in 20 different weeks in the current or preceding calendar year or paid cash remuneration of $20,000 or more for such labor in any quarter of the current or preceding calendar year.
When agricultural labor is provided by a crew leader, the employing unit for which the services are performed is the employer of the crew members unless the crew leader is registered under the Farm Labor Contractor Act of 1963, or substantially all of the crew members operate or maintain mechanized equipment that is provided by the crew leader. In either of these instances, the crew leader is the employer.
Domestic service.- Domestic service in a private home, local college club or local chapter of a college fraternity or sorority is covered if performed for an employing unit that paid cash remuneration of $1,000 or more in any quarter of the current or preceding calendar year for such service.
Government and nonprofit employers.- Coverage is mandatory for services performed for the state, and for nonprofit organizations exempt from income tax employing four or more individuals within each of 20 or more calendar weeks within either the current or preceding calendar year, and for Indian tribes.
Political subdivisions and municipal corporations are mandatorily covered. Other government services are not covered.
Nonprofit organizations have the option of financing benefits by the regular contributions method or the reimbursement method. The state (except for political subdivisions and municipal corporations) makes reimbursement payments from the State Employees' Unemployment Benefit Fund. Under reimbursement financing, payments equal the full amount of regular and extended benefits paid to claimants.
Local governmental entities (such as political subdivisions and municipal corporations) may make payments in lieu of contributions or pay contributions. Reimbursement payments must equal full amount of regular and extended benefits paid to claimants.
EXCEPTIONS
Wages.- The term wages does not include the following:
Remuneration over $12,300 for 2009 paid by an employer to an individual in a calendar year, counting remuneration paid by employer's predecessor and for service in another state. For calendar year 2010 and each calendar year thereafter, the term “wages” includes only the remuneration paid to an individual by an employer during that period with respect to employment that does not exceed the sum of the wage base adjustment applicable to that year, plus the maximum amount includable as wages with respect to the immediately preceding calendar year. Unless otherwise provided, the maximum amount includable as “wages” may not be less than $12,300 or greater than $12,960 for any calendar year after 2009. If wage limit is raised for FUTA purposes, Illinois law provides for a corresponding increase (Sec. 235).
Payments to individual or individual's dependent under plan or system established on account of retirement, accident disability, etc.
Certain other retirement payments.
Payments for sickness or accident disability made over six months after separation.
Payments from, to, or under trust or annuity plan exempt from federal income tax.
Payment of employee's FICA tax without deduction from wages.
Supplemental payments to an employee, other than remuneration for services performed under a shared work plan.
Employment.- The term employment does not include the following:
Aircraft employees on non-American aircraft outside the U.S.
Aquacultural labor; i.e., all services performed in connection with the production of aquatic products as defined in the Aquaculture Development Act.
Delivery or distribution of newspapers or shopping news to the ultimate consumer if (1) substantially all of the remuneration for the services is directly related to sales, per piece fees, or other output, rather than to hours worked; (2) the services are performed under a written contract providing that the individual will not be treated as an employee for federal tax purposes; and (3) delivery or distribution to the ultimate consumer does not include (a) delivery or distribution for sale or resale, including but not limited to, distribution to a newsrack or newsbox, salesperson, newsstand or retail establishment or (b) distribution for further distribution, regardless of subsequent sale or resale. Exclusion not applicable to services required to be covered by federal law.
Direct seller engaged in trade or business of selling, or soliciting the sale of, consumer products to any buyer on a buy-sell, deposit-commission, or similar basis in the home or an establishment other than a permanent retail establishment, if substantially all the remuneration is directly related to sales or other output and not to hours worked and the services are performed pursuant to a written contract providing that the direct seller will not be treated as an employee for federal tax purposes.
Director of corporation serving on committee required by law or charter (not applicable in the case of nonprofit organizations).
Family employment, i.e., service performed in employ of son, daughter or spouse, and service by child under 18 in employ of parent.
Freelance editorial or photographic work for a newspaper, unless required to be covered under federal law.
Full-time students working for organized camps, under specified conditions.
Gambling establishments.
Insurance agents wholly on commission basis.
Maritime employees on other than American vessels, or on American vessel if operating office is outside Illinois.
Newspaper carriers under 18 years of age.
Organizations exempt from income tax, with respect to service performed in calendar quarter if remuneration is less than $50.
Real estate salespeople to extent services are compensated for by commission.
Services performed by an individual under the age of 22 who is a full-time student and acting as a caddie in assisting a golf player during a round of golf primarily by handling the player's clubs when paid directly by the club member or indirectly by the club acting as agent for the member.
Services covered under a federal unemployment compensation system.
Service for a school, college or university by a student who is enrolled and is regularly attending classes or by a spouse of a student if the spouse's employment is provided under a program of financial assistance to the student.
Service by a student enrolled at a nonprofit or public educational institution in a full-time work study program. Exemption not applicable to program established for an employer or group of employers.
Service for a hospital by a patient of the hospital, by a student nurse for a hospital or a nurses' training school, and by an intern for a hospital.
Services performed in Illinois for employing unit who is an employer only because it is subject to FUTA, if it obtains Director's approval for coverage under another state law.
Services performed as an operator of a truck, truck-tractor, or tractor, provided the individual meets qualifications that establish him or her as an independent contractor.
Service performed by an individual as a real estate transaction closing agent when the individual has entered into a contract that specifies the relationship of the individual to the title insurance company to be that of an independent contractor and not that of an employee and the individual is compensated on a per closing basis (Sec. 217.1).
Service performed by an individual as a real estate appraiser under a written independent contractor assessment if the agreement provides that the individual is to be compensated on a fee-per-appraisal basis and the individual is free to accept or reject appraisal requests made by the person for whom the services are performed, or the individual is not prohibited from contracting to perform the services for others (Sec. 217.2).
Mandatory service on a jury does not constitute employment.
Activities performed by a participant in the Americorps programs are not covered employment.
Agricultural, aquacultural and domestic employers.- Agricultural and aquacultural labor is covered if performed for an employer who employed 10 or more individuals in such labor in 20 different weeks in the current or preceding calendar year or paid cash remuneration of $20,000 or more for such labor in any quarter of the current or preceding calendar year.
When agricultural labor is provided by a crew leader, the employing unit for which the services are performed is the employer of the crew members unless the crew leader is registered under the Farm Labor Contractor Act of 1963, or substantially all of the crew members operate or maintain mechanized equipment that is provided by the crew leader. In either of these instances, the crew leader is the employer.
Domestic service.- Domestic service in a private home, local college club or local chapter of a college fraternity or sorority is covered if performed for an employing unit that paid cash remuneration of $1,000 or more in any quarter of the current or preceding calendar year for such service.
Government and nonprofit employers.- Coverage is mandatory for services performed for the state, and for nonprofit organizations exempt from income tax employing four or more individuals within each of 20 or more calendar weeks within either the current or preceding calendar year, and for Indian tribes.
Political subdivisions and municipal corporations are mandatorily covered. Other government services are not covered.
The following services for a nonprofit organization are not covered (a municipal corporation or political subdivision electing coverage must exclude these services):
Church or organization operated for religious purposes that is controlled by a church.
Religious duties of a minister or member of a religious order.
Patients performing services in a rehabilitation facility or sheltered workshop.
Individual receiving unemployment work-relief or work-training under program financed by a federal agency or an agency of a state, political subdivision or municipal corporation.
The following services for the state are not covered:
Elected officials.
Election officials and workers earning less than $1,000 per year.
Members of a legislative body or the judiciary.
Members of the Illinois National Guard or Air National Guard.
Service in major nontenured policymaking or advisory positions.
Inmates of penal or custodial institutions.
Individual receiving unemployment work-relief or work-training under program financed by a federal agency or an agency of the state.
Patients performing services in a rehabilitation facility or sheltered workshop.
Temporary services in connection with certain emergencies, i.e., fire-fighting and emergencies caused by weather conditions.
All of the exclusions above, except for the one for election officials and workers earning less than $1,000 per year, also apply to Indian tribes.
PROCEDURES
Base period.- The first four of the last five completed calendar quarters immediately preceding the benefit year, except that the base period of an individual who has received temporary total disability benefits may be extended. With respect to an individual who is ineligible to receive benefits under the Act because he or she had not been paid during the base period wages for insured work equal to not less than $1,600 during the base periods as defined above, “base period” means the last four completed calendar quarters immediately preceding the benefit year. This provision does not apply to establish any benefit year beginning prior to January 1, 2008.
Benefit year.- The one-year period beginning with the first day of the week in which valid benefit claim is filed.
Weekly benefit amounts.- With respect to any benefit year beginning on or after January 6, 2008, the weekly benefit amount payable to an eligible individual for a week of total unemployment is computed as 47% of the statewide average weekly wage, rounded to the next higher dollar if not already a multiple of $1.
The statewide average weekly wage is the statewide average weekly wage determined for the immediately preceding benefit period plus or minus an amount equal to the percentage change in the statewide average weekly wage between the two immediately preceding benefit periods, multiplied by the statewide average weekly wage for the immediately preceding benefit period (Sec. 401). For 2009, the statewide average weekly wage is $818.32.
The statewide average weekly wage for a benefit period will remain unchanged from that which was in effect for the preceding benefit period if two of the following three factors occur: (1) the average contribution rate for all employers for the calendar year two years prior to the benefit period, as a ratio of total contribution payments to total wages reported for that same period, is 0.2% greater than the national average of this ratio; (2) the state balance in the federal UI trust fund as of March 31 of the prior calendar year is less than $250 million; or (3) the number of first payments of initial claims for the one-year period ending on June 30 of the prior year has increased more than 25% over the average number of such payments during the five-year period ending that same June 30. If all three of the above conditions exist, the statewide average weekly wage will be 10% less than it would have been except for these provisions, except that the reduction may not be in effect for more than two benefit periods out of any five consecutive benefit periods, and may not be cumulative from year to year.
For benefit years beginning on or after 1/4/2009, the maximum weekly benefit amount payable to an individual with no dependents is $385, the maximum payable to an individual with a nonworking spouse is $459, and the maximum payable to an individual with dependent children is $534.
For benefit years beginning on or after January 6, 2008, the weekly benefit amount of an individual with a nonworking spouse is increased by 9% of the individual's prior average weekly wage, but may not exceed 56% of the statewide average weekly wage. With respect to any benefit year beginning before January 1, 2010, the weekly benefit amount for an individual with one or more dependent children is increased by 18.2% of the individual's prior average weekly wage, but may not exceed 65.2% of the statewide average weekly wage.
Wages over 50% of the claimant's weekly benefit amount are deducted, as is
of amount for each day of unavailability, computed to next higher $1. Holiday and vacation pay allocated to a week are also deducted from the individual's weekly benefit amount.
Maximum total benefits.- The lesser of 26 times the weekly benefit amount, plus any dependents' allowances payable, or the total wages for insured work paid during the individual's base period. In addition, during certain periods of high unemployment, payment of extended benefits at the claimant's weekly benefit rate. The work requirement for a second benefit year and the one-week waiting period requirement do not apply to eligibility for extended benefits.
Benefit eligibility; Requirements.-
base-period wages of $1,600 with at least $440 in remainder of base period after deduction of high-quarter wages;
serve one-week waiting period; and
be able and available for work and actively seeking work.
An individual in regular attendance at an approved training course will not be considered unavailable for work or to have failed actively to seek work, nor may the individual be denied benefits by reason of the disqualification for refusal of suitable work without good cause. A claimant must earn in his or her immediately preceding benefit year in which he or she was paid benefits three times his or her current weekly benefit amount in order to be eligible for benefits in the current benefit year.
Individuals in an instructional, research or principal administrative capacity for an educational institution are ineligible for benefits during school vacation periods or paid sabbatical leaves based on wages paid for such services.
Individuals in any nonprofessional capacity for an educational institution are ineligible for benefits between school years or terms if there is a reasonable assurance of reemployment in the second year or term. If no offer of work is made in the second year or term, retroactive payments of benefits may be claimed. A similar disqualification applies during established and customary school vacation periods or holiday recesses and to employees performing services in an educational institution while in the employ of an educational service agency; retroactive payment of benefits is also allowed in these cases.
A professional athlete is ineligible for benefits for periods between sport seasons if there is reasonable assurance that such individual will perform services in both such seasons.
An alien is ineligible for benefits unless he or she has been lawfully admitted for permanent residence or is otherwise permanently residing in the United States under color of law.
Disqualifications-Period.- Voluntary leaving without good cause attributable to the employer-until individual has become reemployed and has had earnings equal to at least his or her weekly benefit amount in each of four calendar weeks that are either for services in employment or have been or will be reported pursuant to FICA.
No disqualification if claimant has left work voluntarily
because he or she is deemed physically unable to work or has left work to care for a family member who is in poor health;
to accept other work and after such acceptance is either not unemployed in each of two weeks or earns at least twice his or her current weekly benefit amount;
because he or she refuses to bump another employee;
solely because of sexual harassment by another employee, of which the employer had knowledge;
which he or she had accepted after separation from other work, if the work he or she left would be deemed unsuitable; or
due to circumstances resulting from being a victim of domestic violence and the individual has made reasonable efforts to preserve the employment.
Refusal of suitable work without good cause-week of occurrence and until claimant has become reemployed and has had earnings equal to his or her weekly benefit amount in each of four calendar weeks which are either for services in employment or have been or will be reported pursuant to the FICA.
Discharge for misconduct-week of occurrence and until claimant has become reemployed and has had earnings equal to his or her weekly benefit amount in each of four calendar weeks which are either for services in employment or have been or will be reported pursuant to the FICA.
Discharge for felony or theft in connection with work -no benefit rights upon admission or conviction.
Labor dispute (other than a lockout)-duration.
Receipt of other unemployment benefits-period of receipt.
Receipt of temporary disability benefits under Workers' Compensation Law-unemployment benefits reduced by other payments.
Receipt of retirement pay-if base-period employer is sole contributor, entire payment is deducted; if employer is not sole contributor, 1/2 of payment (including social security old-age and disability payments) is deducted. The entire amount of any similar periodic payment based on claimant's previous work will be deducted, if required for full tax credit against the FUTA. Automatic conformity with FUTA is also provided.
Fraudulent misrepresentation-seven weeks for the first offense and two additional weeks for each subsequent offense. Penalty expires after whichever of the following occurs first: (1) 26 weeks with respect to which he or she would be otherwise eligible have elapsed or (2) two years have elapsed since the date eligibility began.
WHAT THE EMPLOYER MUST DO
Standard rate.- New employers pay higher of 2.7%, 2.7% multiplied by the adjusted state experience factor or the average contribution rate for the major industrial classification in the Standard Industrial Code or another classification sanctioned by the U.S. Department of Labor and prescribed by the Director.
The new employer rate for 2009 is 3.1%, which includes the 0.4% fund building rate in effect for 2009.
Experience rates.- Tax rates for a given calendar year are determined under these provisions for employers who were liable for contributions during the three preceding calendar years.
Any employer who has had experience with the risk of unemployment for at least 13 consecutive months ending June 30 of the preceding year will pay the greater of the applicable new employer's rate or its computed experience rate. In calculating the benefit ratio (see below) of such an employer, a percentage equal to the total benefit charges for the 12-consecutive-month period ending on the preceding June 30 is multiplied by the benefit conversion factor (see below) applicable to such year, and then divided by the total taxable wages for insured work for the same period.
Note that an employer whose contribution rate is 5.5% or higher and whose total quarterly wages are less than $50,000 pays contributions at 5.4% in that quarter. Not applicable to new employers rated by industry classification.
Fund building rates.- For 2008, the fund building tax rate will be 0.6%, and will be 0.4% for 2009. For each employer whose contribution rate for 2010 and any calendar year thereafter would be 0.2% or higher, the fund building tax rate will be equal to the sum of the rate adjustment applicable to that year, plus the fund building rate in effect for the immediately preceding calendar year. Notwithstanding any contrary provision, the fund building rate in effect for any calendar year after calendar year 2009 may not be less than 0.4% or greater than 0.55%.
Federal penalty tax avoidance surcharge.- If on May 15 of any calendar year, the net amount of the state's account in the Federal Unemployment Trust Fund (less all outstanding advances to that account) is less than $80 million, each employer will pay a surcharge of 0.2% of total wages paid during the preceding calendar year. The surcharge will be increased by an additional 0.2% for each subsequent year in which the account remains below $80 million. In any year in which the surcharge is in effect, the adjusted state experience factor (see below) may not be less than 115%.
Benefit ratio.- The benefit ratio is determined in part based on benefit charges that are computed in the following manner: when in any week in a benefit year a worker is paid regular benefits, an amount equal to such regular benefits, including dependents' allowances, immediately becomes benefit charges. When an individual is paid extended benefits, an amount equal to one-half of such extended benefits, including dependents' allowances, immediately becomes benefit charges. The payment of benefits will not become benefit charges if, because the individual's base period has been extended by reason of receipt of temporary disability payments, benefits are paid based on wages other than those paid in the regular base period.
Once an eligible employer's benefit charges have been determined, its “benefit ratio” is calculated by multiplying total benefit charges over a certain period by the benefit conversion factor (see below), and dividing the product by its total taxable payroll for the same period. The period referred to varies with the length of an employer's employment experience.
If an employer has been liable for the payment of contributions in each of the three calendar years immediately preceding the calendar year for which the rate is being determined, its benefit ratio percentage is determined on the basis of the 12-month period ending on the immediately preceding June 30. If it has been liable for the payment of contributions in each of the four or five calendar years immediately preceding the calendar year for which the rate is being determined, its benefit ratio is determined on the basis of the respective 24-month or 36-month period ending on the immediately preceding June 30.
Note that for purposes of this discussion, total payroll does not include either those wages estimated by the Director prior to the issuance of a determination and assessment or those wages estimated as a result of an audit because of an employer's failure to report wages.
Benefit ratio determinations are rounded to the nearer multiple of 1/10,000 of one percent or, if equally near two multiples, rounded up.
Benefit conversion factor.- The benefit conversion factor is the total benefit wages based on total benefits paid that would have become benefit wages for the 36-consecutive-month period ending June 30, 1992 (see below), divided by the total benefits paid for the same 36-month period. If the number obtained by these calculations is not an exact multiple of 0.1%, it will be increased or reduced to the nearer multiple of 0.1%. If the number is equally near to two multiples of 0.1%, it will be increased to the higher multiple of 0.1%. The benefit conversion factor may not exceed 167% for any year. The factor is set at 138.4% for 2009.
Although the “benefit wage” ratio ceased to play a role in determining experience rating in 1991, benefit wage amounts remain part of the benefit conversion calculation. When an individual is paid regular benefits with respect to a week in any benefit year, an amount equal to 1/26 of the wages for insured work, but not in excess of 1/26 of $6,000 paid by each employer during the base period, will immediately become benefit wages. When an individual is first paid extended benefits with respect to any week in an eligibility period beginning in a benefit year, an amount equal to 1/3 of 1/2 of the wages for insured work, but not in excess of 1/13 of $3,000, paid by each employer during the base period applicable to the benefit year in which the eligibility period began will immediately become benefit wages, whether or not any part of such wages had previously become benefit wages.
An employer's benefit wages with respect to any one individual may not exceed the total amount of wages paid to the individual by that employer during the base period, or $6,000, whichever amount is smaller, except that an employer's benefit wages resulting from the payment of extended benefits to an individual may not exceed 1/2 such total amount of wages, or $3,000, whichever is smaller.
The sum of an employer's benefit wages resulting from the payment to the same individual of both regular benefits with respect to a benefit year and extended benefits with respect to an eligibility period that began in that benefit year may not exceed 1 1/2 times the individual's base period wages, or $9,000, whichever is less.
State experience factor.- The “state experience factor,” the other element necessary to determine contribution rates for a year, depends on the condition of the unemployment trust fund. The state experience factor for a year is the sum of all regular benefits paid, plus the applicable benefit reserve for fund building during the three-year period ending on June 30 of the immediately preceding year, divided by the “net revenues” for the three-year period ending on September 30 of the preceding year. Any fraction will be adjusted to the nearer multiple of 1%; whenever any fraction is exactly one-half, it will be adjusted to the next higher multiple of 1%.
For calendar year 2004 and each calendar year thereafter, the adjusted state experience factor may not be less than 75% or more than 150%. It may not be decreased by more than 12% absolute for calendar year 2004 and each calendar year thereafter from the adjusted state experience factor in effect for the preceding calendar year. The state experience factor may not be increased by more than 16% absolute for calendar year 2004 and subsequent years from the factor in effect for the preceding calendar year.
In addition, for any year following a year in which the federal penalty tax avoidance surcharge (see above) is in effect, the state experience factor may not be less than 115%. For 2009, the state experience factor is 91%.
Determination of rates.- An eligible employer's rate is the product obtained by multiplying its benefit wage ratio by the adjusted state experience factor for the year. Instead of a table of rates, rates between the minimum and the maximum will be at 1/10 of one percent intervals. Rates vary from a minimum determined as the greater of 0.2% or 0.2% multiplied by the adjusted state experience factor to a maximum that is determined as the greater of 6.4% or 6.4% multiplied by the adjusted state experience factor. These rates do not reflect the fund building tax.
An employer's rate will equal the current maximum rate if it had benefit charges during the applicable period of its liability and did not pay contributions upon wages for insured work during such period. The rate of an employer for whom no benefit payments became benefit charges during the applicable period of its liability and who did not report wages for insured work during such period will be the greater of 2.7% or 2.7% times the state experience factor.
Current rates.- For 2009, the state experience factor is 91%, and total contribution rates range from 0.6% to 6.8%, including the 0.4% fund building factor in effect for 2009. All new employers pay 3.1% for 2009. New employers that are in a North American Industrial Classification System (NAICS) sector pay rates as follows: construction - 3.4%. These rates include the 0.4% fund building factor.
SUTA dumping.- If an individual or entity transfers its trade or business, or a portion thereof, and, at the time of the transfer, there is any substantial common ownership, management, or control of the transferor and transferee, then the experience rating records of the transferor and transferee will be combined for the purpose of determining their rates of contribution. A transfer of trade or business includes but is not limited to the transfer of some or all of the transferor’s workforce.
If the transferor or transferee had a contribution rate applicable to it for the calendar year, in which the transfer occurred, that rate will continue for the remainder of the calendar year.
If the transferee had no contribution rate applicable to it for the calendar year, then the contribution rate of the transferee shall be computed for the calendar year based on the experience rating record of the transferor or, where there is more than one transferor, the combined experience rating records of the transferors, subject to the 5.4% rate ceiling.
If any individual or entity that is not an employer acquires the trade or business of an employing unit, the experience rating record of the acquired business shall not be transferred to the individual or entity if the Director finds that the individual or entity acquired the business solely or primarily for the purpose of obtaining a lower rate of contributions. Evidence that a business was acquired solely or primarily for the purpose of obtaining a lower rate of contributions includes but is not necessarily limited to the following: the cost of acquiring the business is low in relation to the individual’s or entity’s overall operating costs subsequent to the acquisition; the individual or entity discontinued the business enterprise of the acquired business immediately or shortly after the acquisition; or the individual or entity hired a significant number of individuals for performance of duties unrelated to the business activity conducted prior to acquisition.
If an individual or entity knowingly violates or attempts to violate this subsection, the individual or entity will be subject to the penalties provided by statute.
DEADLINES
Tax.- Combined contribution and wage report, Forms UI 3/40, with remittance, is due quarterly on or before last day of following month (newly-subject employers file their first UI 3/40 on or before the end of the month following that quarter in which they became liable). Due dates falling on Saturday, Sunday or legal holidays are extended to next business day. Contributions postmarked prior to midnight of due date are deemed timely filed.
Employers may choose paperless filing via Illinois Tax Net or magnetic media. For larger employers (250 or more workers), magnetic media filing is mandatory. For small employers or for employers filing a quarterly report, showing “no wages,”telefiling is available.
Total penalty for late filing ranges from $50 to lesser of $10 for each $10,000 or fraction thereof of the total wages paid during the period, or $5,000. Such penalties will be waived upon proper application and showing of good cause. The penalty may also be waived if the amount of total contributions due for the quarter is less than $500; the employer properly files a request for waiver; and the employer has not been delinquent in the filing of reports for the 20 consecutive calendar quarters. Penalty for willful failure to pay is 60% of amount unpaid, but not less than $400.
Wage.- Detailed quarterly wage reports are also required on Form UI 3/40. In certain instances, employers engaged in more than one type of industry or operating in more than one geographical area within the state are required to submit Form BLS 3020, the Multiple Worksite Report with the quarterly form UI-3/40.
ENFORCEMENT
The Illinois Unemployment Insurance Act is administered by the Director of the Department of Employment Security.
Any employing unit that willfully refuses or fails to pay any contributions, interest or penalties found to be due after final determination and assessment by the Director may, after 30 days' written notice sent to his last-known address by registered or certified mail, be enjoined from operating any business as an employer defined by the Act anywhere in the state. The injunction, which will last until the amount due is paid, may be secured on complaint of the Director in the Circuit Court of the county in which the employing unit resides or has or had a place of business within the state.
Records.- The Director, Board of Review, or any Referee may require from any employing unit any sworn or unsworn reports concerning such employing unit's records as are necessary for the effective administration of the Act, and every such employing unit must fully, correctly, and promptly furnish the Director with all information needed to carry out the provisions of the Act. Information thus obtained or obtained from any individual pursuant to the administration of the Act shall be confidential and shall not be published or be open to public inspection, or admissible in court actions not arising out of the Act. In certain cases, however, such information may be furnished to an employee or employer or a public officer or agency of any state or the federal government.
Liens.- The Act creates a lien upon all the real and personal property or rights thereto owned or thereafter acquired by an employer from whom contributions, interest or penalties are due. The lien is a prior lien, inferior only to any claim for wages in an amount not exceeding $250 for work performed within six months from the date of filing such claim, and to such liens as have attached before the Director files a notice of lien.
The Director may foreclose the lien by petition to the proper Circuit Court, in the same manner as provided by law for the foreclosure of other liens in equity, provided the time for initiating a review of liability for the payment of the sums secured by the lien has expired and no hearing or proceeding for review of such liability is pending. It is not necessary for the petition to describe the property to which the lien attaches. The employer himself is required to file, under oath, a complete schedule of all property and rights thereto he owned at the time the contributions became due or that he subsequently acquired.
WHO TO CONTACT
The Illinois Unemployment Insurance Act is administered by the Director of the Department of Employment Security, 401 S. State St., Chicago, Illinois 60605. Telephone (312) 793-4880.
RECORDKEEPING
Under the Illinois Act, each individual or firm that employs even a single worker is required to keep such true and accurate work records with respect to services performed for it as may be required by rules and regulations of the Director. Such records, together with such other books and documents as may be necessary to verify the entries in such records, are to be open to inspection by the Director or a representative at any reasonable time and as often as may be necessary.
Any employer who is delinquent in the payment of contributions must also permit the Director or a representative to enter upon its premises, inspect its records, and inventory its personal property for the purpose of ascertaining and listing the personal property owned by that employer which is subject to a lien created in favor of the Director.
Employment records must be kept and preserved for at least five years, but if a determination and assessment of contributions, interest, or penalties are made, or an action for the collection of contributions, interest or penalties is brought, records pertaining to the period or periods covered by such administrative or judicial action may not be destroyed until the action has become final or has been canceled or withdrawn.
Where an employer, in the regular course of business, reproduces required records, it may comply with the record-keeping requirements of the Act by preserving such reproductions. Acceptable reproduction may be made by photograph, photostat, microfilm, micro-card, miniature photograph or other process which accurately reproduces or forms a durable medium for so reproducing the original.
No particular form in which to keep employment records is prescribed.
POSTING
Every employer subject to the provisions of the Illinois Unemployment Insurance Act (including every employing unit that has elected, with the approval of the Director, to become an employer subject to the Act) must post and maintain such notices as may be furnished by the Director. Such printed notices must be posted in conspicuous places in all of the establishments of the employer, and must be easily accessible for examination by the worker. The Director will, upon request, supply a sufficient number of duplicate notices to ensure that such notices are accessible to all workers (56 Ill. Adm. Code 2720.100(a)). See ¶14-9900 .
PENALTIES
It is unlawful for any person or employing unit to:
make a false statement or representation or fail to disclose a material fact to obtain, prevent, etc., the payment of benefits, or to avoid the payment of contributions,
fail to pay contributions,
fail to furnish reports,
refuse to allow the inspection of records,
make deductions from the wages of employees because of contributions due,
knowingly fail to furnish employees with required notices, reports, etc.,
attempt to induce a person to refrain from claiming benefits, or to discriminate against individuals who have claimed benefits,
pay contributions on wages for services not rendered if the purpose of such payment is to reduce the amount of contributions due or to become due, or to affect the benefit rights of any individual, or
solicit information from any individual concerning his place of employment, earnings, etc., by any means intended to lead him into believing that the information was being sought by an authorized representative of the Department, Division, etc.
Any employing unit that willfully refuses or fails to pay any contributions, interest or penalties found to be due after final determination and assessment by the Director may, after 30 days' written notice sent to its last-known address by registered or certified mail, be enjoined from operating any business as an employer defined by the Act anywhere in the state. The injunction, which will last until the amount due is paid, may be secured on complaint of the Director in the Circuit Court of the county in which the employing unit resides or has or had a place of business within the state.
An employer who fails to file a quarterly UC-3 and UC-40 (Contribution Report and Wage Report) when due must pay a penalty for each month or part of a month that the report is late. The penalty is the lesser of $10 for each $10,000 or fraction of the total wages for insured work paid during the reporting period or $5,000, but not less than $50. Beginning in 1987, however, no late-filing penalty will be imposed if an employer can prove, within 30 working days after the mailing of a notice of his failure to file the report, that (1) the failure is his first during the previous 20 consecutive calendar quarters and (2) the amount of the total contributions due for the quarter of the late report is less than $500.
The penalty for failure to file forms when due accrues even though the contributions or reimbursement payments are paid on time. An employer who has paid wages in a calendar quarter, all of which wages are in excess of the taxable limit paid to each worker in the calendar year, must also file his quarterly reports on time, even though no contributions are due. Failure to do so will result in the imposition of a penalty.
An employer who is late in filing a Contribution Report (Form UC-3), or paying his contributions (or making reimbursements of benefits), may be required to report and pay monthly instead of quarterly. Employers who willfully fail to pay contributions (or to make payments in lieu of contributions, i.e., reimbursements of benefits) when due, with intent to defraud, may be subject to a penalty equal to 60% of the amounts due. In no instance can this penalty be less than $400.
Willful violation of any provision of the Act or any rule or regulation thereunder, etc., for which no other penalty is specifically provided, is deemed to be a misdemeanor punishable by a fine of not less than $5 nor more than $200 or by imprisonment for not more than six months, or both.
All or part of any penalty may be waived by the Director for good cause shown.
Where the employer is a corporation, the president, secretary, treasurer and officers exercising corresponding functions are each subject to the above penalties for any violation of which he or they had or ought to have had knowledge.
Employers who finance payments by the reimbursement method and whose payments are past due are subject to the same interest charges and penalties applicable to employers whose contributions are past due.
Interest.- Interest upon the amount due from an employer is collectible at the rate of 2% per month and
of 2% for each day or fraction thereof computed from the date the contributions became due. For purposes of calculating interest due after calendar year 1987, payments of interest received more than 30 days after the contributions become due will be deemed received on the last day of the month preceding the month in which they were received except that if the last day of such preceding month is less than 30 days after the date the contributions became due, then such payments will be deemed to have been received on the 30th day after the due date. Interest is limited to 60% of the contributions originally due with respect to a quarter. All or part of any interest may be waived by the Director for good cause shown.
Liens.- The Act creates a lien upon all the real and personal property or rights thereto owned or thereafter acquired by an employer from whom contributions, interest or penalties are due. The lien is a prior lien, inferior only to any claim for wages in an amount not exceeding $250 for work performed within six months from the date of filing such claim, and to such liens as have attached before the Director files a notice of lien.
The Director may foreclose the lien by petition to the proper Circuit Court, in the same manner as provided by law for the foreclosure of other liens in equity, provided the time for initiating a review of liability for the payment of the sums secured by the lien has expired and no hearing or proceeding for review of such liability is pending. It is not necessary for the petition to describe the property to which the lien attaches. The employer himself is required to file, under oath, a complete schedule of all property and rights thereto he owned at the time the contributions became due or that he subsequently acquired.
<p>The Director may foreclose the lien by petition to the proper Circuit Court, in the same manner as provided by law for the foreclosure of other liens in equity,</p>
/resources/state_laws/illinois/illinois_unemployment_insurance_law_summaries.aspx