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Payroll Illinois, Unique Aspects of Illinois Payroll Law and Practice
The Illinois State Agency that oversees the collection and reporting of State income taxes deducted from payroll checks is: Department of Revenue 101 W. Jefferson St. P.O. Box 19022 Springfield, IL 62794-9022 (217) 785-0970 (800) 732-8866 (in state) www.revenue.state.il.us Illinois requires that you use Illinois form "IL-W-4, Employee's Illinois Withholding Allowance Certificate" instead of a Federal W-4 Form for Illinois State Income Tax Withholding. Not all states allow salary reductions made under Section 125 cafeteria plans or 401(k) to be treated in the same manner as the IRS code allows. In Illinois cafeteria plans are: not taxable for income tax calculation; not taxable for unemployment insurance purposes if used to purchase medical life insurance. 401(k) plan deferrals are: not taxable for income taxes; taxable for unemployment purposes. In Illinois supplemental wages are taxed at a 3.0% flat rate. You must file your Illinois state W-2s by magnetic media if you are have at least 250 employees and are required to file your federal W-2s by magnetic media. The Illinois State Unemployment Insurance Agency is: Department of Employment Security 401 S. State St. Chicago, IL 60605-1289 (312) 793-5700 www.ides.state.il.us/ The State of Illinois taxable wage base for unemployment purposes is wages up to $9,800.00. Illinois requires Magnetic media reporting of quarterly wage reporting if the employer has at least 250 employees that they are reporting that quarter. Unemployment records must be retained in Illinois for a minimum period of five years. This information generally includes: name; social security number; dates of hire, rehire and termination; wages by period; payroll pay periods and pay dates; date and circumstances of termination. The Illinois State Agency charged with enforcing the state wage and hour laws is: Department of Labor Labor Law Enforcement 160 North LaSalle, Ste. C1300 Chicago, IL 60601 (312) 793-2800 www.state.il.us/agency/idol/ The minimum wage in Illinois is $6.50 per hour. The general provision in Illinois concerning paying overtime in a non-FLSA covered employer is one and one half times regular rate after 40-hour week. Illinois State new hire reporting requirements are that every employer must report every new hire and rehire. The employer must report the federally required elements of: Employee's name Employee's address Employee's social security number Employer's name Employers address Employer's Federal Employer Identification Number (EIN) This information must be reported within 20 days of the hiring or rehiring. The information can be sent as a W4 or equivalent by mail, fax or electronically. There is a $15, $500 penalty for a late report in Illinois. The Illinois new hire-reporting agency can be reached at 800-327-4473 or on the web at www.ides.state.il.us/employer/newhire/general.htm Illinois does not allow compulsory direct deposit Illinois requires the following information on an employee's pay stub: itemized deductions Illinois requires that employee be paid no less often than semimonthly; monthly for FLSA-exempt employees; union contract can provide different intervals. Illinois requires that the lag time between the end of the pay period and the payment of wages to the employee not exceed semimonthly-13 days; weekly-7days; monthly-21 days; daily-1 day. Illinois payroll law requires that involuntarily terminated employees must be paid their final pay immediately if possible, if not, by next regular payday; next regular payday if suspended due to labor dispute or temporarily laid off and that voluntarily terminated employees must be paid immediately if possible; if not, by next regular payday. Deceased employee's unpaid wages must be paid when normally due to the person owed for funeral expenses, spouse, or child after small estate affidavit; estate no over $15,000. Escheat laws in Illinois require that unclaimed wages be paid over to the state after five years. The employer is further required in Illinois to keep a record of the wages abandoned and turned over to the state for a period of 5 years. Illinois payroll law mandates no more than 40% of minimum wage may be used as a tip credit. In Illinois the payroll laws covering mandatory rest or meal breaks are that employees must have 20 minutes during first 5 hours of 7and a half-hour shift. Illinois statute requires that wage and hour records be kept for a period of not less than five years. These records will normally consist of at least the information required under FLSA. The Illinois agency charged with enforcing Child Support Orders and laws is: Division of Child Support Enforcement Department of Public Aid 509 S. 6th St. Springfield, IL 62701 (800) 447-4278 http://ilchildsupport-employer.com/Default.aspx Illinois has the following provisions for child support deductions: When to start Withholding? 14 working days after the withholding order is mailed to the employer. When to send Payment? Within 7 days of Payday. When to send Termination Notice? "Promptly." Maximum Administrative Fee? $5 per payment. Withholding Limits? Federal Rules under CCPA
Please note that this article is not updated for changes that can and will happen from time to time.
Charles J. Read, CPA has been in the payroll, accounting and tax business for 30 years, the last fifteen in private practice. Mr. Read is the author of ?How to Start a New Business.? To find professional payroll service at a budget price go to www.PayrollonaBudget.com a paperless payroll company. For a full service payroll bureau with CPA?s on staff visit www.CustomPayroll.com . See an excerpt of Mr. Read?s interviews from William Shatners ?Heartbeat of America? television show on the web sites linked above.
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