Illinois General Assembly - Full Text of HB2504
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Full Text of HB2504  100th General Assembly




State of Illinois
2017 and 2018


Introduced , by Rep. Mary E. Flowers


New Act
30 ILCS 105/5.878 new

    Creates the Wage Insurance Act. Establishes a wage insurance program to be administered by the Department of Employment Security. Provides that an individual is eligible for benefits if the individual is a claimant under the Unemployment Insurance Act at the time the individual obtains reemployment and is not employed by the employer from which the individual was last separated. Provides for benefits in an amount sufficient to pay the individual the difference between the wage the individual received at the time of separation from the employer by which the individual was employed immediately before becoming a claimant under the Unemployment Insurance Act and the wages received from reemployment. Imposes a 0.4% tax on payroll beginning January 1, 2018. Provides that claims may be made beginning July 1, 2018. Provides for recovery of erroneous payments, hearings, penalties, unpaid tax, rules, and other matters. Creates the Wage Insurance Fund, provides for the continuing appropriation from the Fund of amounts necessary for the purposes authorized by the Act, and amends the State Finance Act to include the Wage Insurance Fund as a special fund in the State treasury.

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1    AN ACT concerning employment.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the Wage
5Insurance Act.
6    Section 5. Definitions. As used in this Act:
7    "Department" means the Department of Employment Security.
8    "Director" means the Director of the Department of
9Employment Security.
10    "Employer" means (1) any person, partnership, corporation,
11association, or other business entity that employs one or more
12employees for each working day during each of 20 or more
13calendar workweeks; and (2) the State of Illinois and any other
14unit of local government.
15    "Wage insurance benefits" means the benefits payable under
16this Act.
17    "Tax" means the tax imposed under Section 25 of this Act.
18    Section 10. Wage Insurance Program.
19    (a) The Department shall establish and administer a Wage
20Insurance Program.
21    (b) The Department shall establish procedures and forms for
22filing claims for benefits under this Act.



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1    (c) Information contained in the files and records
2pertaining to an employee under this Act is confidential and
3not open to public inspection, other than to public employees
4in the performance of their official duties. However, the
5employee or an authorized representative of an employee may
6review the records or receive specific information from the
7records on the presentation of the signed authorization of the
8employee. An employer or the employer's duly authorized
9representative may review the records of an employee employed
10by the employer in connection with a pending claim. At the
11Department's discretion, other persons may review records when
12such persons are rendering assistance to the Department at any
13stage of the proceedings on any matter pertaining to the
14administration of this Act.
15    An employer must keep at its place of business records of
16employment from which the information needed by the Department
17for purposes of this Act may be obtained. The records shall at
18all times be open to the inspection of the Department pursuant
19to rules adopted by the Department.
20    (d) The Department shall develop and implement an outreach
21program to ensure that individuals who may be eligible to
22receive wage insurance benefits under this Act are made aware
23of these benefits. Outreach information shall explain, in an
24easy to understand format, eligibility requirements, the
25claims process, weekly benefit amounts, maximum benefits
26payable, notice requirements, reinstatement and



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1nondiscrimination rights, confidentiality, and coordination of
2benefits under this Act and other laws, collective bargaining
3agreements, and employer policies. Outreach information shall
4be available in English and in languages other than English
5that are spoken as a primary language by a significant portion
6of the State's population, as determined by the Department.
7    Section 15. Eligibility for benefits.
8    (a) Benefits under this Act are payable to an individual
9who is a claimant under the Unemployment insurance Act at the
10time the individual obtains reemployment and who is not
11employed by the employer from which the individual was last
13    (b) The Department may require that a claim for wage
14insurance benefits under this Act be supported by a
15certification of wages issued by the individual's employer.
16    Section 20. Disqualification from benefits.
17    (a) An individual is disqualified from wage insurance
18benefits under this Act if the individual willfully makes a
19false statement or misrepresentation regarding a material
20fact, or willfully fails to disclose a material fact, to obtain
22    (b) A disqualification for wage insurance benefits is for a
23period of 2 years, and commences on the first day of the
24calendar week in which the individual filed a claim for



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1benefits under this Act. An individual who is disqualified for
2benefits is liable to the Department for a penalty in an amount
3equal to 15% of the amount of benefits received by the
5    Section 25. Payroll tax.
6    (a) There is imposed a tax upon employees in the amount of
70.4% of wages as defined in Section 235 of the Unemployment
8Act. The Department shall by rule provide for the collection of
9this tax.
10    (b) Moneys collected pursuant to subsection (a), and any
11accrued cash balances, shall be deposited into the Wage
12Insurance Account Fund for payment of benefits and the
13expenditures of the Department in carrying out the functions
14and duties of the Department under this Act.
15    Section 30. Duration of benefits; amount of benefits.
16    (a) Wage insurance benefits are payable for a maximum of 2
18    (b) The first payment of wage insurance benefits shall be
19made to an employee within 2 weeks after the claim is filed.
20Subsequent payments shall be made twice a month thereafter.
21    (c) Wage insurance benefits shall be paid in an amount
22sufficient to pay to the individual the difference between the
23wage received by the individual at the time of the separation
24from the employer by which the individual was employed



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1immediately before becoming a claimant under the Unemployment
2Insurance Act and the wages received by the individual from
4    (d) The Department shall provide a tax form to each
5individual who has received wage insurance benefits for the
6individual's use in paying federal income tax on the benefits
7and shall advise an individual filing a new claim for wage
8insurance benefits, at the time of filing the claim, that:
9        (1) benefits are subject to federal income tax;
10        (2) requirements exist pertaining to estimated tax
11    payments;
12        (3) the individual may elect to have federal income tax
13    deducted and withheld from the individual's payment of
14    benefits at the amount specified in the federal Internal
15    Revenue Code; and
16        (4) the individual is permitted to change a previously
17    elected withholding status.
18    Amounts deducted and withheld from benefits must remain in
19the Wage Insurance Fund until transferred to the federal taxing
20authority as a payment of income tax.
21    The Director shall follow all procedures specified by the
22federal Internal Revenue Service pertaining to the deducting
23and withholding of income tax.
24    Section 35. Recovery of erroneous payments.
25    (a) If an individual receives any wage insurance benefits



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1under Section 30 which the employee is not entitled:
2        (1) the individual is liable to the Department for the
3    amount of benefits received; and
4        (2) the amount of benefits received may be deducted by
5    the Department from any future benefits otherwise payable
6    to the individual under Section 30.
7    (b) If the Department decides that an individual has been
8paid wage insurance benefits to which the individual is not
9entitled because of an error, and that the individual is not
10subject to disqualification under Section 20, the amounts
11received in error may be recovered by the Department only by
12deductions from benefits otherwise payable to the employee
13under Section 30 during the 52 weeks following the date on
14which the order establishing the amount of the erroneous
15payment becomes final. If amounts determined to be recoverable
16have not been paid within that time, the liability shall be
17canceled by the Department and charged against the Wage
18Insurance Fund.
19    (c) Except as provided in subsection (d), if benefits
20determined to be recoverable under this Section have not been
21paid within 3 years after the date that the order of the
22Department establishing the liability of the individual
23becomes final, and no payments have been received on the
24liability for at least 3 months, the liability shall be
25canceled by the Department and charged against the Wage
26Insurance Fund.



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1    (d) Any amount due under this Section may be collected by
2the Department in a civil action against the individual brought
3in the name of the Department.
4    (e) Interest on any benefits recoverable under this Section
5shall be paid and collected at the same time repayment of
6benefits is made by the individual. Interest on an amount
7recoverable under this Section accrues at the rate specified in
8Section 2-1303 of the Code of Civil Procedure, beginning on the
9first day of the month following 60 days after entry of the
10order establishing the amount recoverable.
11    (f) Any amount collected under this Section by the
12Department shall be paid into the Wage Insurance Fund.
13    Section 40. Hearings. A person aggrieved by a decision of
14the Department under this Act may request a hearing. The
15Department shall adopt rules governing hearings and the
16issuance of final orders under this Act in accordance with the
17provisions of the Illinois Administrative Procedure Act. All
18final administrative decisions of the Department under this Act
19are subject to judicial review under the Administrative Review
21    Section 45. Civil penalty.
22    (a) The Department may assess a civil penalty not to exceed
23$5,000 against an employer that:
24        (1) fails to pay when due the taxes imposed under



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1    Section 25; or
2        (2) fails to comply with this Act or any rules adopted
3    by the Department relating to reports or other requirements
4    necessary to carry out the purposes of this Act.
5    (b) All civil penalties collected under this Section shall
6be applied first toward reimbursement of the costs incurred in
7investigating violations, conducting hearings, and assessing
8and collecting penalties. All remaining amounts shall be paid
9into the Wage Insurance Fund.
10    Section 50. Unpaid tax.
11    (a) If an employer defaults with respect to any tax payment
12required to be made by the employer tax under Section 25, a
13person described in subsection (b) of this Section who, as an
14officer, member, partner, or employee, is under a duty to
15perform the actions required by employers under this Act shall
16be personally liable for amounts due under Section 25. More
17than one person may be jointly and severally liable under this
19    (b) This Section applies only to a person who is one or
20more of the following:
21        (1) An officer or employee of a corporation.
22        (2) A member or an employee of a limited liability
23    corporation.
24        (3) A partner in or an employee of a limited liability
25    partnership.



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1    (c) If the Director determines that an amount is due under
2this Section, the Director shall issue a notice of assessment
3to the person liable under this Section mailed to the person's
4last-known address of record with the Director.
5    Section 55. Wage Insurance Fund. The Wage Insurance Fund is
6created as a special fund in the State treasury. All moneys
7received under this Act shall be deposited into the Fund. This
8Section constitutes a continuing appropriation from the Fund of
9all amounts necessary for the purposes authorized by this Act.
10Any interest earned on moneys in the Wage Insurance Fund shall
11be deposited into the Fund.
12    Section 60. Rules. The Department may adopt any rules
13necessary to implement this Act.
14    Section 65. Commencement date.
15    (a) Employers shall first withhold taxes from employees'
16earnings for quarters worked beginning January 1, 2018.
17    (b) Individuals may first file claims wage insurance
18benefits under this Act on or after June 1, 2018.
19    Section 70. Authority to contract. The Department may
20contract or enter into interagency agreements with other State
21agencies for the initial administration of the Wage Insurance



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1    Section 105. The State Finance Act is amended by adding
2Section 5.878 as follows:
3    (30 ILCS 105/5.878 new)
4    Sec. 5.878. Wage Insurance Fund.