Bill Text: IL SB3530 | 2013-2014 | 98th General Assembly | Chaptered

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Bill Title: Amends the Unemployment Insurance Act. Provides for the creation of a program of shared work benefits, under which an individual is deemed unemployed in any week if the individual works less than his or her normal hours or number of days in a week for the individual's employer and the Director of Employment Security finds that the employer has reduced or restricted the individual's hours or days of work or has rehired an individual previously laid off and reduced that individual's hours or days of work from those previously worked as the result of a plan by the employer to reduce unemployment and stabilize the work force through a program of sharing the work remaining after a reduction in total hours of work and a corresponding reduction in wages, among not less than 10% of the employer's permanent work force involved in the affected work unit or units. Provides for: computation of benefits; limits on benefits; determinations; reduction of benefits; payments; submission of forms and certifications; requirements; administration; creation of a Shared Work Benefits Fund; and other matters. Effective immediately.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Passed) 2014-12-23 - Public Act . . . . . . . . . 98-1133 [SB3530 Detail]

Download: Illinois-2013-SB3530-Chaptered.html

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Public Act 098-1133
SB3530 Enrolled LRB098 17883 JLS 55703 b
AN ACT concerning employment.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 10. The Public Employment Office Act is amended by
changing Section 7 as follows:
(20 ILCS 1015/7) (from Ch. 48, par. 183)
Sec. 7. No fee or compensation shall be charged or received
directly or indirectly from persons applying for employment or
help through said free employment offices, and any officer or
employee of the Department of Employment Security who shall
accept, directly or indirectly any fee or compensation from any
applicant or from his or her representative shall be guilty of
a Class C misdemeanor, except that this Section does not
prohibit referral of an individual to an apprenticeship program
that is approved by and registered with the United States
Department of Labor, Bureau of Apprenticeship and Training and
charges an application fee of $50 or less.
(Source: P.A. 83-1503.)
Section 15. The Unemployment Insurance Act is amended by
changing Sections 206.1, 225, 245, 702, 1402, 2101, 2201,
2201.1, and 2401 and by adding Sections 502 and 1402.1 as
follows:

(820 ILCS 405/206.1)
Sec. 206.1. Employment; employee leasing company.
A. For purposes of this Section:
1. "Client" means an individual or entity which has
contracted with an employee leasing company to supply it
with or assume responsibility for personnel management of
one or more workers to perform services on an on-going
basis rather than under a temporary help arrangement, as
defined in Section 15 of the Employee Leasing Company Act.
2. "Employee leasing company" means an individual or
entity which contracts with a client to supply or assume
responsibility for personnel management of one or more
workers to perform services for the client on an on-going
basis rather than under a temporary help arrangement, as
defined in Section 15 of the Employee Leasing Company Act.
B. Subject to subsection C, services performed by an
individual under a contract between an employee leasing company
and client, including but not limited to services performed in
the capacity of a corporate officer of the client, are services
in "employment" of the employee leasing company and are not
services in "employment" of the client if all of the following
conditions are met:
1. The employee leasing company pays the individual for
the services directly from its own accounts; and
2. The employee leasing company, exclusively or in

conjunction with the client, retains the right to direct
and control the individual in the performance of the
services; and
3. The employee leasing company, exclusively or in
conjunction with the client, retains the right to hire and
terminate the individual; and
4. The employee leasing company reports each client in
the manner the Director prescribes by regulation; and .
5. The employee leasing company has provided, and there
remains in effect, such irrevocable indemnification, as
the Director may require by rule, to create a primary
obligation on the part of the provider to the Illinois
Department of Employment Security for obligations of the
employee leasing company accrued and final under this Act.
The rule may prescribe the form the indemnification shall
take including, but not limited to, a surety bond or an
irrevocable standby letter of credit. The obligation
required pursuant to the rule shall not exceed $1,000,000.
C. Notwithstanding subsection B, services performed by an
individual under a contract between an employee leasing company
and client, including but not limited to services performed in
the capacity of a corporate officer of the client, are services
in "employment" of the client and are not services in
"employment" of the employee leasing company if:
1. The contribution rate, or, where applicable, the
amended contribution rate, of the client is greater than

the sum of the fund building rate established for the year
pursuant to Section 1506.3 of this Act plus the greater of
2.7% or 2.7% times the adjusted state experience factor for
the year; and
2. The contribution rate, or, where applicable, the
amended contribution rate, of the employee leasing company
is less than the contribution rate, or, where applicable,
the amended contribution rate of the client by more than
1.5% absolute.
D. Except as provided in this Section and notwithstanding
any other provision of this Act to the contrary, services
performed by an individual under a contract between an employee
leasing company and client, including but not limited to
services performed in the capacity of a corporate officer of
the client, are services in "employment" of the client and are
not services in "employment" of the employee leasing company.
E. Nothing in this Section shall be construed or used to
effect the existence of an employment relationship other than
for purposes of this Act.
(Source: P.A. 91-890, eff. 7-6-00.)
(820 ILCS 405/225) (from Ch. 48, par. 335)
Sec. 225. This Section, and not Section 212 of this Act,
controls the determination of employment status for services
performed by individuals in the delivery or distribution of
newspapers or shopping news.

(A) The term "employment" shall not include services
performed by an individual under the age of eighteen in the
delivery or distribution of newspapers or shopping news.
(B) The term "employment" does not include the performance
of freelance editorial or photographic work for a newspaper.
(B-5) The employment status of individuals engaged in the
delivery of newspapers or shopping news shall be determined as
provided in this subsection. The term "employment" does not
include the delivery or distribution of newspapers or shopping
news if at least one of the following 4 elements is present:
(1) The individual performing the services gains the
profits and bears the losses of the services.
(2) The person or firm for whom the services are
performed does not represent the individual as an employee
to its customers.
(3) The individual hires his or her own helpers or
employees, without the need for approval from the person or
firm for whom the services are performed, and pays them
without reimbursement from that person or firm.
(4) Once the individual leaves the premises of the
person or firm for whom the services are performed or the
printing plant, the individual operates free from the
direction and control of the person or firm, except as is
necessary for the person or firm to ensure quality control
of the newspapers or shopping news, including, but not
limited to, the condition of the newspapers or shopping

news upon delivery and the location and timing of delivery
of the newspapers or shopping news.
(C) Notwithstanding subsection (B-5), the The term
"employment" does not include the delivery or distribution of
newspapers or shopping news to the ultimate consumer if:
(1) substantially all of the remuneration for the
performance of the services is directly related to sales,
"per piece" fees, or other output, rather than to the
number of hours worked; and
(2) the services are performed under a written contract
between the individual and the person or firm for whom the
services are performed, and the contract provides that the
individual will not be treated as an employee for federal
tax purposes.
(3) Delivery or distribution to the ultimate consumer
does not include:
(i) delivery or distribution for sale or resale,
including, but not limited to, distribution to a
newsrack or newsbox, salesperson, newsstand or retail
establishment;
(ii) distribution for further distribution,
regardless of subsequent sale or resale.
(D) Subsections (B-5) and Subsection (C) shall not apply in
the case of any individual who provides delivery or
distribution services for a newspaper pursuant to the terms of
a collective bargaining agreement and shall not be construed to

alter or amend the application or interpretation of any
existing collective bargaining agreement. Further, subsections
(B-5) and subsection (C) shall not be construed as evidence of
the existence or non-existence of an employment relationship
under any other Sections of this Act or other existing laws.
(E) Subsections (B), (B-5), and (C) shall not apply to
services that are required to be covered as a condition of
approval of this Act by the United States Secretary of Labor
under Section 3304 (a)(6)(A) of the Federal Unemployment Tax
Act.
(Source: P.A. 87-1178.)
(820 ILCS 405/245) (from Ch. 48, par. 370)
Sec. 245. Coordination with Federal Unemployment Tax Act.
Notwithstanding any provisions of this Act to the contrary,
excepting the exemptions from the definition of employment
contained in Sections 212.1, 217.1, 217.2, 226, and 231 and
subsections (B), (B-5), and (C) B and C of Section 225:
A. The term "employer" includes any employing unit which is
an "employer" under the provisions of the Federal Unemployment
Tax Act, or which is required, pursuant to such Act, to be an
"employer" under this Act as a condition for the Federal
approval of this Act requisite to the full tax credit, against
the tax imposed by the Federal Act, for contributions paid by
employers pursuant to this Act.
B. The term "employment" includes any services performed

within the State which constitute "employment" under the
provisions of the Federal Unemployment Tax Act, or which are
required, pursuant to such Act, to be "employment" under this
Act as a condition for the Federal approval of this Act
requisite to the full tax credit, against the tax imposed by
the Federal Act, for contributions paid by employers pursuant
to this Act.
C. The term "wages" includes any remuneration for services
performed within this State which is subject to the payment of
taxes under the provisions of the Federal Unemployment Tax Act.
(Source: P.A. 89-252, eff. 8-8-95; 89-649, eff. 8-9-96.)
(820 ILCS 405/502 new)
Sec. 502. Eligibility for benefits under the Short-Time
Compensation Program.
A. The Director may by rule establish a short-time
compensation program consistent with this Section. No
short-time compensation shall be payable except as authorized
by rule.
B. As used in this Section:
"Affected unit" means a specified plant, department,
shift, or other definable unit that includes 2 or more workers
to which an approved short-time compensation plan applies.
"Health and retirement benefits" means employer-provided
health benefits and retirement benefits under a defined benefit
pension plan (as defined in Section 414(j) of the Internal

Revenue Code) or contributions under a defined contribution
plan (defined in Section 414(i) of the Internal Revenue Code),
which are incidents of employment in addition to the cash
remuneration earned.
"Short-time compensation" means the unemployment benefits
payable to employees in an affected unit under an approved
short-time compensation plan, as distinguished from the
unemployment benefits otherwise payable under this Act.
"Short-time compensation plan" means a plan submitted by an
employer, for approval by the Director, under which the
employer requests the payment of short-time compensation to
workers in an affected unit of the employer to avert layoffs.
"Usual weekly hours of work" means the usual hours of work
for full-time or part-time employees in the affected unit when
that unit is operating on its regular basis, not to exceed 40
hours and not including hours of overtime work.
"Unemployment insurance" means the unemployment benefits
payable under this Act other than short-time compensation and
includes any amounts payable pursuant to an agreement under any
Federal law providing for compensation, assistance, or
allowances with respect to unemployment.
C. An employer wishing to participate in the short-time
compensation program shall submit a signed written short-time
compensation plan to the Director for approval. The Director
shall develop an application form to request approval of a
short-time compensation plan and an approval process. The

application shall include:
1. The employer's unemployment insurance account
number, the affected unit covered by the plan, including
the number of full-time or part-time workers in such unit,
the percentage of workers in the affected unit covered by
the plan, identification of each individual employee in the
affected unit by name and social security number, and any
other information required by the Director to identify plan
participants.
2. A description of how workers in the affected unit
will be notified of the employer's participation in the
short-time compensation plan if such application is
approved, including how the employer will notify those
workers in a collective bargaining unit as well as any
workers in the affected unit who are not in a collective
bargaining unit. If the employer will not provide advance
notice to workers in the affected unit, the employer shall
explain in a statement in the application why it is not
feasible to provide such notice.
3. The employer's certification that it has the
approval of the plan from all collective bargaining
representatives of employees in the affected unit and has
notified all employees in the affected unit who are not in
a collective bargaining unit of the plan.
4. The employer's certification that it will not hire
additional part-time or full-time employees for, or

transfer employees to, the affected unit, while the program
is in operation.
5. A requirement that the employer identify the usual
weekly hours of work for employees in the affected unit and
the specific percentage by which their hours will be
reduced during all weeks covered by the plan. An
application shall specify the percentage of reduction for
which a short-time compensation application may be
approved which shall be not less than 20% and not more than
60%. If the plan includes any week for which the employer
regularly provides no work (due to a holiday or other plant
closing), then such week shall be identified in the
application.
6. Certification by the employer that, if the employer
provides health and retirement benefits to any employee
whose usual weekly hours of work are reduced under the
program, such benefits will continue to be provided to the
employee participating in the short-time compensation
program under the same terms and conditions as though the
usual weekly hours of work of such employee had not been
reduced or to the same extent as other employees not
participating in the short-time compensation program. For
defined benefit retirement plans, the hours that are
reduced under the short-time compensation plan shall be
credited for purposes of participation, vesting, and
accrual of benefits as though the usual weekly hours of

work had not been reduced. The dollar amount of employer
contributions to a defined contribution plan that are based
on a percentage of compensation may be less due to the
reduction in the employee's compensation. Notwithstanding
any other provision to the contrary, a certification that a
reduction in health and retirement benefits is scheduled to
occur during the duration of the plan and will be
applicable equally to employees who are not participating
in the short-time compensation program and to those
employees who are participating satisfies this paragraph.
7. Certification by the employer that the aggregate
reduction in work hours is in lieu of layoffs (temporary or
permanent layoffs, or both). The application shall include
an estimate of the number of workers who would have been
laid off in the absence of the short-time compensation
plan.
8. Agreement by the employer to: furnish reports to the
Director relating to the proper conduct of the plan; allow
the Director or his or her authorized representatives
access to all records necessary to approve or disapprove
the plan application, and after approval of a plan, to
monitor and evaluate the plan; and follow any other
directives the Director deems necessary for the agency to
implement the plan and which are consistent with the
requirements for plan applications.
9. Certification by the employer that participation in

the short-time compensation plan and its implementation is
consistent with the employer's obligations under
applicable Federal and Illinois laws.
10. The effective date and duration of the plan, which
shall expire no later than the end of the 12th full
calendar month after the effective date.
11. Any other provision added to the application by the
Director that the United States Secretary of Labor
determines to be appropriate for purposes of a short-time
compensation program.
D. The Director shall approve or disapprove a short-time
compensation plan in writing within 45 days of its receipt and
promptly communicate the decision to the employer. A decision
disapproving the plan shall clearly identify the reasons for
the disapproval. The disapproval shall be final, but the
employer shall be allowed to submit another short-time
compensation plan for approval not earlier than 30 days from
the date of the disapproval.
E. The short-time compensation plan shall be effective on
the mutually agreed upon date by the employer and the Director,
which shall be specified in the notice of approval to the
employer. The plan shall expire on the date specified in the
notice of approval, which shall be mutually agreed on by the
employer and Director but no later than the end of the 12th
full calendar month after its effective date. However, if a
short-time compensation plan is revoked by the Director, the

plan shall terminate on the date specified in the Director's
written order of revocation. An employer may terminate a
short-time compensation plan at any time upon written notice to
the Director. Upon receipt of such notice from the employer,
the Director shall promptly notify each member of the affected
unit of the termination date. An employer may submit a new
application to participate in another short-time compensation
plan at any time after the expiration or termination date.
F. The Director may revoke approval of a short-time
compensation plan for good cause at any time, including upon
the request of any of the affected unit's employees or their
collective bargaining representative. The revocation order
shall be in writing and shall specify the reasons for the
revocation and the date the revocation is effective. The
Director may periodically review the operation of each
employer's short-time compensation plan to assure that no good
cause exists for revocation of the approval of the plan. Good
cause shall include, but not be limited to, failure to comply
with the assurances given in the plan, termination of the
approval of the plan by a collective bargaining representative
of employees in the affected unit, unreasonable revision of
productivity standards for the affected unit, conduct or
occurrences tending to defeat the intent and effective
operation of the short-time compensation plan, and violation of
any criteria on which approval of the plan was based.
G. An employer may request a modification of an approved

plan by filing a written request to the Director. The request
shall identify the specific provisions proposed to be modified
and provide an explanation of why the proposed modification is
appropriate for the short-time compensation plan. The Director
shall approve or disapprove the proposed modification in
writing within 30 days of receipt and promptly communicate the
decision to the employer. The Director, in his or her
discretion, may approve a request for modification of the plan
based on conditions that have changed since the plan was
approved provided that the modification is consistent with and
supports the purposes for which the plan was initially
approved. A modification may not extend the expiration date of
the original plan, and the Director must promptly notify the
employer whether the plan modification has been approved and,
if approved, the effective date of modification. An employer is
not required to request approval of plan modification from the
Director if the change is not substantial, but the employer
must report every change to plan to the Director promptly and
in writing. The Director may terminate an employer's plan if
the employer fails to meet this reporting requirement. If the
Director determines that the reported change is substantial,
the Director shall require the employer to request a
modification to the plan.
H. An individual is eligible to receive short-time
compensation with respect to any week only if the individual is
eligible for unemployment insurance pursuant to subsection E of

Section 500, not otherwise disqualified for unemployment
insurance, and:
1. During the week, the individual is employed as a
member of an affected unit under an approved short-time
compensation plan, which was approved prior to that week,
and the plan is in effect with respect to the week for
which short-time compensation is claimed.
2. Notwithstanding any other provision of this Act
relating to availability for work and actively seeking
work, the individual is available for the individual's
usual hours of work with the short-time compensation
employer, which may include, for purposes of this Section,
participating in training to enhance job skills that is
approved by the Director, including but not limited to as
employer-sponsored training or training funded under the
Workforce Investment Act of 1998.
3. Notwithstanding any other provision of law, an
individual covered by a short-time compensation plan is
deemed unemployed in any week during the duration of such
plan if the individual's remuneration as an employee in an
affected unit is reduced based on a reduction of the
individual's usual weekly hours of work under an approved
short-time compensation plan.
I. The short-time compensation weekly benefit amount shall
be the product of the percentage of reduction in the
individual's usual weekly hours of work multiplied by the sum

of the regular weekly benefit amount for a week of total
unemployment plus any applicable dependent allowance pursuant
to subsection C of Section 401.
1. An individual may be eligible for short-time
compensation or unemployment insurance, as appropriate,
except that no individual shall be eligible for combined
benefits (excluding any payments attributable to a
dependent allowance pursuant to subsection C of Section
401) in any benefit year in an amount more than the maximum
benefit amount, nor shall an individual be paid short-time
compensation benefits for more than 52 weeks under a
short-time compensation plan.
2. The short-time compensation paid to an individual
(excluding any payments attributable to a dependent
allowance pursuant to subsection C of Section 401) shall be
deducted from the maximum benefit amount established for
that individual's benefit year.
3. Provisions applicable to unemployment insurance
claimants shall apply to short-time compensation claimants
to the extent that they are not inconsistent with
short-time compensation provisions. An individual who
files an initial claim for short-time compensation
benefits shall receive a monetary determination.
4. The following provisions apply to individuals who
work for both a short-time compensation employer and
another employer during weeks covered by the approved

short-time compensation plan:
i. If combined hours of work in a week for both
employers do not result in a reduction of at least 20%
of the usual weekly hours of work with the short-time
compensation employer, the individual shall not be
entitled to benefits under this Section.
ii. If combined hours of work for both employers
results in a reduction equal to or greater than 20% of
the usual weekly hours of work for the short-time
compensation employer, the short-time compensation
benefit amount payable to the individual is reduced for
that week and is determined by multiplying the
percentage by which the combined hours of work have
been reduced by the sum of the weekly benefit amount
for a week of total unemployment plus any applicable
dependent allowance pursuant to subsection C of
Section 401. A week for which benefits are paid under
this subparagraph shall be reported as a week of
short-time compensation.
iii. If an individual worked the reduced
percentage of the usual weekly hours of work for the
short-time compensation employer and is available for
all his or her usual hours of work with the short-time
compensation employer, and the individual did not work
any hours for the other employer either because of the
lack of work with that employer or because the

individual is excused from work with the other
employer, the individual shall be eligible for
short-time compensation for that week. The benefit
amount for such week shall be calculated as provided in
the introductory clause of this subsection I.
iv. An individual who is not provided any work
during a week by the short-time compensation employer,
or any other employer, and who is otherwise eligible
for unemployment insurance shall be eligible for the
amount of regular unemployment insurance determined
without regard to this Section.
v. An individual who is not provided any work by
the short-time compensation employer during a week,
but who works for another employer and is otherwise
eligible may be paid unemployment insurance for that
week subject to the disqualifying income and other
provisions applicable to claims for regular
unemployment insurance.
J. Short-time compensation shall be charged to employers in
the same manner as unemployment insurance is charged under
Illinois law. Employers liable for payments in lieu of
contributions shall have short-time compensation attributed to
service in their employ in the same manner as unemployment
insurance is attributed. Notwithstanding any other provision
to the contrary, to the extent that short-term compensation
payments under this Section are reimbursed by the federal

government, no benefit charges or payments in lieu of
contributions shall be accrued by a participating employer.
K. A short-time compensation plan shall not be approved for
an employer that is delinquent in the filing of any reports
required or the payment of contributions, payments in lieu of
contributions, interest, or penalties due under this Act
through the date of the employer's application.
L. Overpayments of other benefits under this Act may be
recovered from an individual receiving short-time compensation
under this Act in the manner provided under Sections 900 and
901. Overpayments under the short-time compensation plan may be
recovered from an individual receiving other benefits under
this Act in the manner provided under Sections 900 and 901.
M. An individual who has received all of the short-time
compensation or combined unemployment insurance and short-time
compensation available in a benefit year shall be considered an
exhaustee for purposes of extended benefits, as provided under
the provisions of Section 409, and, if otherwise eligible under
those provisions, shall be eligible to receive extended
benefits.
(820 ILCS 405/702) (from Ch. 48, par. 452)
Sec. 702. Determinations. The claims adjudicator shall for
each week with respect to which the claimant claims benefits or
waiting period credit, make a "determination" which shall state
whether or not the claimant is eligible for such benefits or

waiting period credit and the sum to be paid the claimant with
respect to such week. The claims adjudicator shall promptly
notify the claimant and such employing unit as shall, within
the time and in the manner prescribed by the Director, have
filed a sufficient allegation that the claimant is ineligible
to receive benefits or waiting period credit for said week, of
his "determination" and the reasons therefor. The Director may,
by rule adopted with the advice and aid of the Employment
Security Advisory Board, require that an employing unit with 25
50 or more individuals in its employ during a the prior
calendar year, or an entity representing 5 or more employing
units during a the prior calendar year, file an allegation of
ineligibility electronically in a manner prescribed by the
Director for the one year period commencing on July 1 of the
immediately succeeding calendar year and ending on June 30 of
the second succeeding calendar year. In making his
"determination," the claims adjudicator shall give
consideration to the information, if any, contained in the
employing unit's allegation, whether or not the allegation is
sufficient. The claims adjudicator shall deem an employing
unit's allegation sufficient only if it contains a reason or
reasons therefor (other than general conclusions of law, and
statements such as "not actively seeking work" or "not
available for work" shall be deemed, for this purpose, to be
conclusions of law). If the claims adjudicator deems an
allegation insufficient, he shall make a decision accordingly,

and shall notify the employing unit of such decision and the
reasons therefor. Such decision may be appealed by the
employing unit to a Referee within the time limits prescribed
by Section 800 for appeal from a "determination". Any such
appeal, and any appeal from the Referee's decision thereon,
shall be governed by the applicable provisions of Sections 801,
803, 804 and 805.
(Source: P.A. 97-621, eff. 11-18-11.)
(820 ILCS 405/1402) (from Ch. 48, par. 552)
Sec. 1402. Penalties.
A. If any employer fails, within the time prescribed in
this Act as amended and in effect on October 5, 1980, and the
regulations of the Director, to file a report of wages paid to
each of his workers, or to file a sufficient report of such
wages after having been notified by the Director to do so, for
any period which begins prior to January 1, 1982, he shall pay
to the Department as a penalty a sum determined in accordance
with the provisions of this Act as amended and in effect on
October 5, 1980.
B. Except as otherwise provided in this Section, any
employer who fails to file a report of wages paid to each of
his workers for any period which begins on or after January 1,
1982, within the time prescribed by the provisions of this Act
and the regulations of the Director, or, if the Director
pursuant to such regulations extends the time for filing the

report, fails to file it within the extended time, shall, in
addition to any sum otherwise payable by him under the
provisions of this Act, pay to the Department as a penalty a
sum equal to the lesser of (1) $5 for each $10,000 or fraction
thereof of the total wages for insured work paid by him during
the period or (2) $2,500, for each month or part thereof of
such failure to file the report. With respect to an employer
who has elected to file reports of wages on an annual basis
pursuant to Section 1400.2, in assessing penalties for the
failure to submit all reports by the due date established
pursuant to that Section, the 30-day period immediately
following the due date shall be considered as one month.
If the Director deems an employer's report of wages paid to
each of his workers for any period which begins on or after
January 1, 1982, insufficient, he shall notify the employer to
file a sufficient report. If the employer fails to file such
sufficient report within 30 days after the mailing of the
notice to him, he shall, in addition to any sum otherwise
payable by him under the provisions of this Act, pay to the
Department as a penalty a sum determined in accordance with the
provisions of the first paragraph of this subsection, for each
month or part thereof of such failure to file such sufficient
report after the date of the notice.
For wages paid in calendar years prior to 1988, the penalty
or penalties which accrue under the two foregoing paragraphs
with respect to a report for any period shall not be less than

$100, and shall not exceed the lesser of (1) $10 for each
$10,000 or fraction thereof of the total wages for insured work
paid during the period or (2) $5,000. For wages paid in
calendar years after 1987, the penalty or penalties which
accrue under the 2 foregoing paragraphs with respect to a
report for any period shall not be less than $50, and shall not
exceed the lesser of (1) $10 for each $10,000 or fraction of
the total wages for insured work paid during the period or (2)
$5,000. With respect to an employer who has elected to file
reports of wages on an annual basis pursuant to Section 1400.2,
for purposes of calculating the minimum penalty prescribed by
this Section for failure to file the reports on a timely basis,
a calendar year shall constitute a single period. For reports
of wages paid after 1986, the Director shall not, however,
impose a penalty pursuant to either of the two foregoing
paragraphs on any employer who can prove within 30 working days
after the mailing of a notice of his failure to file such a
report, that (1) the failure to file the report is his first
such failure during the previous 20 consecutive calendar
quarters, and (2) the amount of the total contributions due for
the calendar quarter of such report (or, in the case of an
employer who is required to file the reports on a monthly
basis, the amount of the total contributions due for the
calendar quarter that includes the month of such report) is
less than $500.
For any month which begins on or after January 1, 2013, a

report of the wages paid to each of an employer's workers shall
be due on or before the last day of the month next following
the calendar month in which the wages were paid if the employer
is required to report such wages electronically pursuant to the
regulations of the Director; otherwise a report of the wages
paid to each of the employer's workers shall be due on or
before the last day of the month next following the calendar
quarter in which the wages were paid.
Any employer who willfully wilfully fails to pay any
contribution or part thereof, based upon wages paid prior to
1987, when required by the provisions of this Act and the
regulations of the Director, with intent to defraud the
Director, shall in addition to such contribution or part
thereof pay to the Department a penalty equal to 50 percent of
the amount of such contribution or part thereof, as the case
may be, provided that the penalty shall not be less than $200.
Any employer who willfully fails to pay any contribution or
part thereof, based upon wages paid in 1987 and in each
calendar year thereafter, when required by the provisions of
this Act and the regulations of the Director, with intent to
defraud the Director, shall in addition to such contribution or
part thereof pay to the Department a penalty equal to 60% of
the amount of such contribution or part thereof, as the case
may be, provided that the penalty shall not be less than $400.
However, all or part of any penalty may be waived by the
Director for good cause shown.

C. With regard to an employer required to report monthly
pursuant to this Section, in addition to each employee's name,
social security number, and wages for insured work paid during
the period, the Director may, by rule, require a report to
provide the following information concerning each employee:
the employee's occupation, hours worked during the period,
hourly wage, if applicable, and work location if the employer
has more than one physical location. Notwithstanding any other
provision of any other law to the contrary, information
obtained pursuant to this subsection shall not be disclosed to
any other public official or agency of this State or any other
state to the extent it relates to a specifically identified
individual or entity or to the extent that the identity of a
specific individual or entity may be discerned from such
information. The additional data elements required to be
reported pursuant to the rule authorized by this subsection may
be reported in the same electronic format as in the system
maintained by the employer or employer's agent and need not be
reformatted.
(Source: P.A. 97-689, eff. 6-14-12; 97-791, eff. 1-1-13;
98-463, eff. 8-16-13.)
(820 ILCS 405/1402.1 new)
Sec. 1402.1. Processing fee.
A. The Director may, by rule, establish a processing fee of
$50 with regard to a report of contributions due that is not

required to be submitted electronically if the employer fails
to submit the report on the form designated by the Director or
otherwise provide all of the information required by the form
designated by the Director. With respect to the first instance
of such a failure after the effective date of the rule, the
Director shall issue the employer a written warning instead of
a processing fee, and no such processing fee shall be assessed
unless the Director has issued the employer a written warning
for a prior failure.
B. The Director may, by rule, establish a processing fee of
$50 with regard to any payment of contributions, payment in
lieu of contributions, interest, or penalty that is not made
through electronic funds transfer if the employer fails to
enclose the payment coupon provided by the Director with its
payment or otherwise provide all of the information the coupon
would provide, regardless of the amount due. With respect to
the first instance of such a failure after the effective date
of the rule, the Director shall issue the employer a written
warning instead of a processing fee, and no such processing fee
shall be assessed unless the Director has issued the employer a
written warning for a prior failure.
(820 ILCS 405/2101) (from Ch. 48, par. 661)
Sec. 2101. Special administrative account. Except as
provided in Section 2100, all interest and penalties collected
pursuant to this Act shall be deposited in the special

administrative account. The amount in this account in excess of
$100,000 on the close of business of the last day of each
calendar quarter shall be immediately transferred to this
State's account in the unemployment trust fund. However,
subject to Section 2101.1, such funds shall not be transferred
where it is determined by the Director that it is necessary to
accumulate funds in the account in order to have sufficient
funds to pay interest that may become due under the terms of
Section 1202 (b) of the Federal Social Security Act, as
amended, upon advances made to the Illinois Unemployment
Insurance Trust Fund under Title XII of the Federal Social
Security Act or where it is determined by the Director that it
is necessary to accumulate funds in the special administrative
account in order to have sufficient funds to expend for any
other purpose authorized by this Section. The balance of funds
in the special administrative account that are in excess of
$100,000 on the first day of each calendar quarter and not
transferred to this State's account in the unemployment trust
fund, minus the amount reasonably anticipated to be needed to
make payments from the special administrative account pursuant
to subsections C through I, shall be certified by the Director
and transferred by the State Comptroller to the Title III
Social Security and Employment Fund in the State Treasury
within 30 days of the first day of the calendar quarter. The
Director may certify and the State Comptroller shall transfer
such funds to the Title III Social Security and Employment Fund

on a more frequent basis. The moneys available in the special
administrative account shall be expended upon the direction of
the Director whenever it appears to him that such expenditure
is necessary for:
A. 1. The proper administration of this Act and no Federal
funds are available for the specific purpose for which such
expenditure is to be made, provided the moneys are not
substituted for appropriations from Federal funds, which in the
absence of such moneys would be available and provided the
monies are appropriated by the General Assembly.
2. The proper administration of this Act for which purpose
appropriations from Federal funds have been requested but not
yet received, provided the special administrative account will
be reimbursed upon receipt of the requested Federal
appropriation.
B. To the extent possible, the repayment to the fund
established for financing the cost of administration of this
Act of moneys found by the Secretary of Labor of the United
States of America, or other appropriate Federal agency, to have
been lost or expended for purposes other than, or in amounts in
excess of, those found necessary by the Secretary of Labor, or
other appropriate Federal agency, for the administration of
this Act.
C. The payment of refunds or adjustments of interest or
penalties, paid pursuant to Sections 901 or 2201.
D. The payment of interest on refunds of erroneously paid

contributions, penalties and interest pursuant to Section
2201.1.
E. The payment or transfer of interest or penalties to any
Federal or State agency, pursuant to reciprocal arrangements
entered into by the Director under the provisions of Section
2700E.
F. The payment of any costs incurred, pursuant to Section
1700.1.
G. Beginning January 1, 1989, for the payment for the legal
services authorized by subsection B of Section 802, up to
$1,000,000 per year for the representation of the individual
claimants and up to $1,000,000 per year for the representation
of "small employers".
H. The payment of any fees for collecting past due
contributions, payments in lieu of contributions, penalties,
and interest shall be paid (without an appropriation) from
interest and penalty monies received from collection agents
that have contracted with the Department under Section 2206 to
collect such amounts, provided however, that the amount of such
payment shall not exceed the amount of past due interest and
penalty collected.
I. The payment of interest that may become due under the
terms of Section 1202 (b) of the Federal Social Security Act,
as amended, for advances made to the Illinois Unemployment
Insurance Trust Fund.
The Director shall annually on or before the first day of

March report in writing to the Employment Security Advisory
Board concerning the expenditures made from the special
administrative account and the purposes for which funds are
being accumulated.
If Federal legislation is enacted which will permit the use
by the Director of some part of the contributions collected or
to be collected under this Act, for the financing of
expenditures incurred in the proper administration of this Act,
then, upon the availability of such contributions for such
purpose, the provisions of this Section shall be inoperative
and interest and penalties collected pursuant to this Act shall
be deposited in and be deemed a part of the clearing account.
In the event of the enactment of the foregoing Federal
legislation, and within 90 days after the date upon which
contributions become available for expenditure for costs of
administration, the total amount in the special administrative
account shall be transferred to the clearing account, and after
clearance thereof shall be deposited with the Secretary of the
Treasury of the United States of America to the credit of the
account of this State in the unemployment trust fund,
established and maintained pursuant to the Federal Social
Security Act, as amended.
(Source: P.A. 94-1083, eff. 1-19-07.)
(820 ILCS 405/2201) (from Ch. 48, par. 681)
Sec. 2201. Refund or adjustment of contributions. Not

later than 3 years after the date upon which the Director first
notifies any contributions, interest or penalties thereon were
paid, an employing unit that it which has paid such
contributions, interest or penalties thereon erroneously, the
employing unit may file a claim with the Director for an
adjustment thereof in connection with subsequent contribution
payments, or for a refund thereof where such adjustment cannot
be made; provided, however, that no refund or adjustment shall
be made of any contribution, the amount of which has been
determined and assessed by the Director, if such contribution
was paid after the determination and assessment of the Director
became final, and provided, further, that any such adjustment
or refund, involving contributions with respect to wages on the
basis of which benefits have been paid, shall be reduced by the
amount of benefits so paid. Upon receipt of a claim the
Director shall make his determination, either allowing such
claim in whole or in part, or ordering that it be denied, and
serve notice upon the claimant of such determination. Such
determination of the Director shall be final at the expiration
of 20 days from the date of service of such notice unless the
claimant shall have filed with the Director a written protest
and a petition for hearing, specifying his objections thereto.
Upon receipt of such petition within the 20 days allowed, the
Director shall fix the time and place for a hearing and shall
notify the claimant thereof. At any hearing held as herein
provided, the determination of the Director shall be prima

facie correct and the burden shall be upon the protesting
employing unit to prove that it is incorrect. All of the
provisions of this Act applicable to hearings conducted
pursuant to Section 2200 shall be applicable to hearings
conducted pursuant to this Section. Upon the conclusion of such
hearing, a decision shall be made by the Director and notice
thereof given to the claimant. If the Director shall decide
that the claim be allowed in whole or in part, or if such
allowance be ordered by the Court pursuant to Section 2205 and
the judgment of said Court has become final, the Director
shall, if practicable, make adjustment without interest in
connection with subsequent contribution payments by the
claimant, and if adjustments thereof cannot practicably be made
in connection with such subsequent contribution payments, then
the Director shall refund to the claimant the amount so
allowed, without interest except as otherwise provided in
Section 2201.1 from moneys in the benefit account established
by this Act. Nothing herein contained shall prohibit the
Director from making adjustment or refund upon his own
initiative, within the time allowed for filing claim therefor,
provided that the Director shall make no refund or adjustment
of any contribution, the amount of which he has previously
determined and assessed, if such contribution was paid after
the determination and assessment became final.
If this State should not be certified for any year by the
Secretary of Labor of the United States of America, or other

appropriate Federal agency, under Section 3304 of the Federal
Internal Revenue Code of 1954, the Director shall refund
without interest to any instrumentality of the United States
subject to this Act by virtue of permission granted in an Act
of Congress, the amount of contributions paid by such
instrumentality with respect to such year.
The Director may by regulation provide that, if there is a
total credit balance of less than $2 in an employer's account
with respect to contributions, interest, and penalties, the
amount may be disregarded by the Director; once disregarded,
the amount shall not be considered a credit balance in the
account and shall not be subject to either an adjustment or a
refund.
(Source: P.A. 90-554, eff. 12-12-97.)
(820 ILCS 405/2201.1) (from Ch. 48, par. 681.1)
Sec. 2201.1. Interest on Overpaid Contributions, Penalties
and Interest. The Director shall semi-annually quarterly
furnish each employer with a statement of credit balances in
the employer's account where the balances with respect to all
contributions, interest and penalties combined equal or exceed
$2. Under regulations prescribed by the Director and subject to
the limitations of Section 2201, the employer may file a
request for an adjustment or refund of the amount erroneously
paid. Interest shall be paid on refunds of erroneously paid
contributions, penalties and interest imposed by this Act,

except that if any refund is mailed by the Director within 90
days after the date of the refund claim, no interest shall be
due or paid. The interest shall begin to accrue as of the date
of the refund claim and shall be paid at the rate of 1.5% per
month computed at the rate of 12/365 of 1.5% for each day or
fraction thereof. Interest paid pursuant to this Section shall
be paid from monies in the special administrative account
established by Sections 2100 and 2101. This Section shall apply
only to refunds of contributions, penalties and interest which
were paid as the result of wages paid after January 1, 1988.
(Source: P.A. 90-554, eff. 12-12-97.)
(820 ILCS 405/2401) (from Ch. 48, par. 721)
(Text of Section after amendment by P.A. 98-107)
Sec. 2401. Recording and release of lien. A. The lien
created by Section 2400 shall be invalid only as to any
innocent purchaser for value of stock in trade of any employer
in the usual course of such employer's business, and shall be
invalid as to any innocent purchaser for value of any of the
other assets to which such lien has attached, unless notice
thereof has been filed by the Director in the office of the
recorder of the county within which the property subject to the
lien is situated. The Director may, in his discretion, for good
cause shown and upon the reimbursement of any recording fees
paid by the Director with respect to the lien, issue a
certificate of withdrawal of notice of lien filed against any

employer, which certificate shall be recorded in the same
manner as herein provided for the recording of notice of liens.
Such withdrawal of notice of lien shall invalidate such lien as
against any person acquiring any of such employer's property or
any interest therein, subsequent to the recordation of the
withdrawal of notice of lien, but shall not otherwise affect
the validity of such lien, nor shall it prevent the Director
from re-recording notice of such lien. In the event notice of
such lien is re-recorded, such notice shall be effective as
against third persons only as of the date of such
re-recordation.
B. The recorder of each county shall procure at the expense
of the county a file labeled "Unemployment Compensation
Contribution Lien Notice" and an index book labeled
"Unemployment Compensation Contribution Lien Index." When a
notice of any such lien is presented to him for filing, he
shall file it in numerical order in the file and shall enter it
alphabetically in the index. The entry shall show the name and
last known business address of the employer named in the
notice, the serial number of the notice, the date and hour of
filing, and the amount of contribution, interest and penalty
thereon due and unpaid. When a certificate of complete or
partial release of such lien issued by the Director is
presented for filing in the office of the recorder where a
notice of lien was filed, the recorder shall permanently attach
the certificate of release to the notice of lien and shall

enter the certificate of release and the date in the
Unemployment Compensation Contribution Lien Index on the line
where the notice of lien is entered. In case title to land to
be affected by the Notice of Lien is registered under the
provisions of "An Act Concerning Land Titles", approved May 1,
1897, as amended, such notice shall be filed in the office of
the Registrar of Titles of the county within which the property
subject to the lien is situated and shall be entered upon the
register of titles as a memorial or charge upon each folium of
the register of title affected by such notice, and the Director
shall not have a preference over the rights of any bona fide
purchaser, mortgagee, judgment creditor or other lien holder
arising prior to the registration of such notice.
C. The Director shall have the power to issue a certificate
of partial release of any part of the property subject to the
lien, upon the reimbursement of any recording fees paid by the
Director with respect to the lien, if he shall find that the
fair market value of that part of such property remaining
subject to the lien is at least equal to the amount of all
prior liens upon such property plus double the amount of the
liability for contributions, interest and penalties thereon
remaining unsatisfied.
D. Where the amount of or the liability for the payment of
any contribution, interest or penalty is contested by any
employing unit against whose property a lien has attached, and
the determination of the Director with reference to such

contribution has not become final, the Director may issue a
certificate of release of lien upon the reimbursement of any
recording fees paid by the Director with respect to the lien
and the furnishing of bond by such employing unit in 125% the
amount of the sum of such contribution, interest and penalty,
for which lien is claimed, with good and sufficient surety to
be approved by the Director conditioned upon the prompt payment
of such contribution, together with interest and penalty
thereon, by such employing unit to the Director immediately
upon the decision of the Director in respect to the liability
for such contribution, interest and penalty becoming final.
E. When a lien obtained pursuant to this Act has been
satisfied and upon the reimbursement of any recording fees paid
by the Director with respect to the lien, the Department shall
issue a release to the person, or his agent, against whom the
lien was obtained and such release shall contain in legible
letters a statement as follows:
FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL
BE FILED WITH THE RECORDER OR THE REGISTRAR
OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED.
F. The Director may, by rule, require, as a condition of
withdrawing, releasing, or partially releasing a lien recorded
pursuant to this Section, that the employer reimburse the
Department for any recording fees paid with respect to the
lien.
(Source: P.A. 98-107, eff. 7-1-14.)

(820 ILCS 405/1704.1 rep.)
Section 20. The Unemployment Insurance Act is amended by
repealing Section 1704.1.
Section 99. Effective date. This Act takes effect July 1,
2014, except that the changes to Sections 2201 and 2201.1 of
the Unemployment Insurance Act take effect January 1, 2015.