Illinois General Assembly - Full Text of SB3530
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Full Text of SB3530  98th General Assembly




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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 10. The Public Employment Office Act is amended by
5changing Section 7 as follows:
6    (20 ILCS 1015/7)  (from Ch. 48, par. 183)
7    Sec. 7. No fee or compensation shall be charged or received
8directly or indirectly from persons applying for employment or
9help through said free employment offices, and any officer or
10employee of the Department of Employment Security who shall
11accept, directly or indirectly any fee or compensation from any
12applicant or from his or her representative shall be guilty of
13a Class C misdemeanor, except that this Section does not
14prohibit referral of an individual to an apprenticeship program
15that is approved by and registered with the United States
16Department of Labor, Bureau of Apprenticeship and Training and
17charges an application fee of $50 or less.
18(Source: P.A. 83-1503.)
19    Section 15. The Unemployment Insurance Act is amended by
20changing Sections 206.1, 225, 245, 702, 1402, 2101, 2201,
212201.1, and 2401 and by adding Sections 502 and 1402.1 as



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1    (820 ILCS 405/206.1)
2    Sec. 206.1. Employment; employee leasing company.
3    A. For purposes of this Section:
4        1. "Client" means an individual or entity which has
5    contracted with an employee leasing company to supply it
6    with or assume responsibility for personnel management of
7    one or more workers to perform services on an on-going
8    basis rather than under a temporary help arrangement, as
9    defined in Section 15 of the Employee Leasing Company Act.
10        2. "Employee leasing company" means an individual or
11    entity which contracts with a client to supply or assume
12    responsibility for personnel management of one or more
13    workers to perform services for the client on an on-going
14    basis rather than under a temporary help arrangement, as
15    defined in Section 15 of the Employee Leasing Company Act.
16    B. Subject to subsection C, services performed by an
17individual under a contract between an employee leasing company
18and client, including but not limited to services performed in
19the capacity of a corporate officer of the client, are services
20in "employment" of the employee leasing company and are not
21services in "employment" of the client if all of the following
22conditions are met:
23        1. The employee leasing company pays the individual for
24    the services directly from its own accounts; and
25        2. The employee leasing company, exclusively or in



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1    conjunction with the client, retains the right to direct
2    and control the individual in the performance of the
3    services; and
4        3. The employee leasing company, exclusively or in
5    conjunction with the client, retains the right to hire and
6    terminate the individual; and
7        4. The employee leasing company reports each client in
8    the manner the Director prescribes by regulation; and .
9        5. The employee leasing company has provided, and there
10    remains in effect, such irrevocable indemnification, as
11    the Director may require by rule, to create a primary
12    obligation on the part of the provider to the Illinois
13    Department of Employment Security for obligations of the
14    employee leasing company accrued and final under this Act.
15    The rule may prescribe the form the indemnification shall
16    take including, but not limited to, a surety bond or an
17    irrevocable standby letter of credit. The obligation
18    required pursuant to the rule shall not exceed $1,000,000.
19    C. Notwithstanding subsection B, services performed by an
20individual under a contract between an employee leasing company
21and client, including but not limited to services performed in
22the capacity of a corporate officer of the client, are services
23in "employment" of the client and are not services in
24"employment" of the employee leasing company if:
25        1. The contribution rate, or, where applicable, the
26    amended contribution rate, of the client is greater than



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1    the sum of the fund building rate established for the year
2    pursuant to Section 1506.3 of this Act plus the greater of
3    2.7% or 2.7% times the adjusted state experience factor for
4    the year; and
5        2. The contribution rate, or, where applicable, the
6    amended contribution rate, of the employee leasing company
7    is less than the contribution rate, or, where applicable,
8    the amended contribution rate of the client by more than
9    1.5% absolute.
10    D. Except as provided in this Section and notwithstanding
11any other provision of this Act to the contrary, services
12performed by an individual under a contract between an employee
13leasing company and client, including but not limited to
14services performed in the capacity of a corporate officer of
15the client, are services in "employment" of the client and are
16not services in "employment" of the employee leasing company.
17    E. Nothing in this Section shall be construed or used to
18effect the existence of an employment relationship other than
19for purposes of this Act.
20(Source: P.A. 91-890, eff. 7-6-00.)
21    (820 ILCS 405/225)  (from Ch. 48, par. 335)
22    Sec. 225. This Section, and not Section 212 of this Act,
23controls the determination of employment status for services
24performed by individuals in the delivery or distribution of
25newspapers or shopping news.



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1    (A) The term "employment" shall not include services
2performed by an individual under the age of eighteen in the
3delivery or distribution of newspapers or shopping news.
4    (B) The term "employment" does not include the performance
5of freelance editorial or photographic work for a newspaper.
6    (B-5) The employment status of individuals engaged in the
7delivery of newspapers or shopping news shall be determined as
8provided in this subsection. The term "employment" does not
9include the delivery or distribution of newspapers or shopping
10news if at least one of the following 4 elements is present:
11        (1) The individual performing the services gains the
12    profits and bears the losses of the services.
13        (2) The person or firm for whom the services are
14    performed does not represent the individual as an employee
15    to its customers.
16        (3) The individual hires his or her own helpers or
17    employees, without the need for approval from the person or
18    firm for whom the services are performed, and pays them
19    without reimbursement from that person or firm.
20        (4) Once the individual leaves the premises of the
21    person or firm for whom the services are performed or the
22    printing plant, the individual operates free from the
23    direction and control of the person or firm, except as is
24    necessary for the person or firm to ensure quality control
25    of the newspapers or shopping news, including, but not
26    limited to, the condition of the newspapers or shopping



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1    news upon delivery and the location and timing of delivery
2    of the newspapers or shopping news.
3    (C) Notwithstanding subsection (B-5), the The term
4"employment" does not include the delivery or distribution of
5newspapers or shopping news to the ultimate consumer if:
6        (1) substantially all of the remuneration for the
7    performance of the services is directly related to sales,
8    "per piece" fees, or other output, rather than to the
9    number of hours worked; and
10        (2) the services are performed under a written contract
11    between the individual and the person or firm for whom the
12    services are performed, and the contract provides that the
13    individual will not be treated as an employee for federal
14    tax purposes.
15        (3) Delivery or distribution to the ultimate consumer
16    does not include:
17            (i) delivery or distribution for sale or resale,
18        including, but not limited to, distribution to a
19        newsrack or newsbox, salesperson, newsstand or retail
20        establishment;
21            (ii) distribution for further distribution,
22        regardless of subsequent sale or resale.
23    (D) Subsections (B-5) and Subsection (C) shall not apply in
24the case of any individual who provides delivery or
25distribution services for a newspaper pursuant to the terms of
26a collective bargaining agreement and shall not be construed to



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1alter or amend the application or interpretation of any
2existing collective bargaining agreement. Further, subsections
3(B-5) and subsection (C) shall not be construed as evidence of
4the existence or non-existence of an employment relationship
5under any other Sections of this Act or other existing laws.
6    (E) Subsections (B), (B-5), and (C) shall not apply to
7services that are required to be covered as a condition of
8approval of this Act by the United States Secretary of Labor
9under Section 3304 (a)(6)(A) of the Federal Unemployment Tax
11(Source: P.A. 87-1178.)
12    (820 ILCS 405/245)  (from Ch. 48, par. 370)
13    Sec. 245. Coordination with Federal Unemployment Tax Act.
14Notwithstanding any provisions of this Act to the contrary,
15excepting the exemptions from the definition of employment
16contained in Sections 212.1, 217.1, 217.2, 226, and 231 and
17subsections (B), (B-5), and (C) B and C of Section 225:
18    A. The term "employer" includes any employing unit which is
19an "employer" under the provisions of the Federal Unemployment
20Tax Act, or which is required, pursuant to such Act, to be an
21"employer" under this Act as a condition for the Federal
22approval of this Act requisite to the full tax credit, against
23the tax imposed by the Federal Act, for contributions paid by
24employers pursuant to this Act.
25    B. The term "employment" includes any services performed



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1within the State which constitute "employment" under the
2provisions of the Federal Unemployment Tax Act, or which are
3required, pursuant to such Act, to be "employment" under this
4Act as a condition for the Federal approval of this Act
5requisite to the full tax credit, against the tax imposed by
6the Federal Act, for contributions paid by employers pursuant
7to this Act.
8    C. The term "wages" includes any remuneration for services
9performed within this State which is subject to the payment of
10taxes under the provisions of the Federal Unemployment Tax Act.
11(Source: P.A. 89-252, eff. 8-8-95; 89-649, eff. 8-9-96.)
12    (820 ILCS 405/502 new)
13    Sec. 502. Eligibility for benefits under the Short-Time
14Compensation Program.
15    A. The Director may by rule establish a short-time
16compensation program consistent with this Section. No
17short-time compensation shall be payable except as authorized
18by rule.
19    B. As used in this Section:
20    "Affected unit" means a specified plant, department,
21shift, or other definable unit that includes 2 or more workers
22to which an approved short-time compensation plan applies.
23    "Health and retirement benefits" means employer-provided
24health benefits and retirement benefits under a defined benefit
25pension plan (as defined in Section 414(j) of the Internal



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1Revenue Code) or contributions under a defined contribution
2plan (defined in Section 414(i) of the Internal Revenue Code),
3which are incidents of employment in addition to the cash
4remuneration earned.
5    "Short-time compensation" means the unemployment benefits
6payable to employees in an affected unit under an approved
7short-time compensation plan, as distinguished from the
8unemployment benefits otherwise payable under this Act.
9    "Short-time compensation plan" means a plan submitted by an
10employer, for approval by the Director, under which the
11employer requests the payment of short-time compensation to
12workers in an affected unit of the employer to avert layoffs.
13    "Usual weekly hours of work" means the usual hours of work
14for full-time or part-time employees in the affected unit when
15that unit is operating on its regular basis, not to exceed 40
16hours and not including hours of overtime work.
17    "Unemployment insurance" means the unemployment benefits
18payable under this Act other than short-time compensation and
19includes any amounts payable pursuant to an agreement under any
20Federal law providing for compensation, assistance, or
21allowances with respect to unemployment.
22    C. An employer wishing to participate in the short-time
23compensation program shall submit a signed written short-time
24compensation plan to the Director for approval. The Director
25shall develop an application form to request approval of a
26short-time compensation plan and an approval process. The



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



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1    transfer employees to, the affected unit, while the program
2    is in operation.
3        5. A requirement that the employer identify the usual
4    weekly hours of work for employees in the affected unit and
5    the specific percentage by which their hours will be
6    reduced during all weeks covered by the plan. An
7    application shall specify the percentage of reduction for
8    which a short-time compensation application may be
9    approved which shall be not less than 20% and not more than
10    60%. If the plan includes any week for which the employer
11    regularly provides no work (due to a holiday or other plant
12    closing), then such week shall be identified in the
13    application.
14        6. Certification by the employer that, if the employer
15    provides health and retirement benefits to any employee
16    whose usual weekly hours of work are reduced under the
17    program, such benefits will continue to be provided to the
18    employee participating in the short-time compensation
19    program under the same terms and conditions as though the
20    usual weekly hours of work of such employee had not been
21    reduced or to the same extent as other employees not
22    participating in the short-time compensation program. For
23    defined benefit retirement plans, the hours that are
24    reduced under the short-time compensation plan shall be
25    credited for purposes of participation, vesting, and
26    accrual of benefits as though the usual weekly hours of



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



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1    the short-time compensation plan and its implementation is
2    consistent with the employer's obligations under
3    applicable Federal and Illinois laws.
4        10. The effective date and duration of the plan, which
5    shall expire no later than the end of the 12th full
6    calendar month after the effective date.
7        11. Any other provision added to the application by the
8    Director that the United States Secretary of Labor
9    determines to be appropriate for purposes of a short-time
10    compensation program.
11    D. The Director shall approve or disapprove a short-time
12compensation plan in writing within 45 days of its receipt and
13promptly communicate the decision to the employer. A decision
14disapproving the plan shall clearly identify the reasons for
15the disapproval. The disapproval shall be final, but the
16employer shall be allowed to submit another short-time
17compensation plan for approval not earlier than 30 days from
18the date of the disapproval.
19    E. The short-time compensation plan shall be effective on
20the mutually agreed upon date by the employer and the Director,
21which shall be specified in the notice of approval to the
22employer. The plan shall expire on the date specified in the
23notice of approval, which shall be mutually agreed on by the
24employer and Director but no later than the end of the 12th
25full calendar month after its effective date. However, if a
26short-time compensation plan is revoked by the Director, the



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1plan shall terminate on the date specified in the Director's
2written order of revocation. An employer may terminate a
3short-time compensation plan at any time upon written notice to
4the Director. Upon receipt of such notice from the employer,
5the Director shall promptly notify each member of the affected
6unit of the termination date. An employer may submit a new
7application to participate in another short-time compensation
8plan at any time after the expiration or termination date.
9    F. The Director may revoke approval of a short-time
10compensation plan for good cause at any time, including upon
11the request of any of the affected unit's employees or their
12collective bargaining representative. The revocation order
13shall be in writing and shall specify the reasons for the
14revocation and the date the revocation is effective. The
15Director may periodically review the operation of each
16employer's short-time compensation plan to assure that no good
17cause exists for revocation of the approval of the plan. Good
18cause shall include, but not be limited to, failure to comply
19with the assurances given in the plan, termination of the
20approval of the plan by a collective bargaining representative
21of employees in the affected unit, unreasonable revision of
22productivity standards for the affected unit, conduct or
23occurrences tending to defeat the intent and effective
24operation of the short-time compensation plan, and violation of
25any criteria on which approval of the plan was based.
26    G. An employer may request a modification of an approved



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1plan by filing a written request to the Director. The request
2shall identify the specific provisions proposed to be modified
3and provide an explanation of why the proposed modification is
4appropriate for the short-time compensation plan. The Director
5shall approve or disapprove the proposed modification in
6writing within 30 days of receipt and promptly communicate the
7decision to the employer. The Director, in his or her
8discretion, may approve a request for modification of the plan
9based on conditions that have changed since the plan was
10approved provided that the modification is consistent with and
11supports the purposes for which the plan was initially
12approved. A modification may not extend the expiration date of
13the original plan, and the Director must promptly notify the
14employer whether the plan modification has been approved and,
15if approved, the effective date of modification. An employer is
16not required to request approval of plan modification from the
17Director if the change is not substantial, but the employer
18must report every change to plan to the Director promptly and
19in writing. The Director may terminate an employer's plan if
20the employer fails to meet this reporting requirement. If the
21Director determines that the reported change is substantial,
22the Director shall require the employer to request a
23modification to the plan.
24    H. An individual is eligible to receive short-time
25compensation with respect to any week only if the individual is
26eligible for unemployment insurance pursuant to subsection E of



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1Section 500, not otherwise disqualified for unemployment
2insurance, and:
3        1. During the week, the individual is employed as a
4    member of an affected unit under an approved short-time
5    compensation plan, which was approved prior to that week,
6    and the plan is in effect with respect to the week for
7    which short-time compensation is claimed.
8        2. Notwithstanding any other provision of this Act
9    relating to availability for work and actively seeking
10    work, the individual is available for the individual's
11    usual hours of work with the short-time compensation
12    employer, which may include, for purposes of this Section,
13    participating in training to enhance job skills that is
14    approved by the Director, including but not limited to as
15    employer-sponsored training or training funded under the
16    Workforce Investment Act of 1998.
17        3. Notwithstanding any other provision of law, an
18    individual covered by a short-time compensation plan is
19    deemed unemployed in any week during the duration of such
20    plan if the individual's remuneration as an employee in an
21    affected unit is reduced based on a reduction of the
22    individual's usual weekly hours of work under an approved
23    short-time compensation plan.
24    I. The short-time compensation weekly benefit amount shall
25be the product of the percentage of reduction in the
26individual's usual weekly hours of work multiplied by the sum



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



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1    short-time compensation plan:
2            i. If combined hours of work in a week for both
3        employers do not result in a reduction of at least 20%
4        of the usual weekly hours of work with the short-time
5        compensation employer, the individual shall not be
6        entitled to benefits under this Section.
7            ii. If combined hours of work for both employers
8        results in a reduction equal to or greater than 20% of
9        the usual weekly hours of work for the short-time
10        compensation employer, the short-time compensation
11        benefit amount payable to the individual is reduced for
12        that week and is determined by multiplying the
13        percentage by which the combined hours of work have
14        been reduced by the sum of the weekly benefit amount
15        for a week of total unemployment plus any applicable
16        dependent allowance pursuant to subsection C of
17        Section 401. A week for which benefits are paid under
18        this subparagraph shall be reported as a week of
19        short-time compensation.
20            iii. If an individual worked the reduced
21        percentage of the usual weekly hours of work for the
22        short-time compensation employer and is available for
23        all his or her usual hours of work with the short-time
24        compensation employer, and the individual did not work
25        any hours for the other employer either because of the
26        lack of work with that employer or because the



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1        individual is excused from work with the other
2        employer, the individual shall be eligible for
3        short-time compensation for that week. The benefit
4        amount for such week shall be calculated as provided in
5        the introductory clause of this subsection I.
6            iv. An individual who is not provided any work
7        during a week by the short-time compensation employer,
8        or any other employer, and who is otherwise eligible
9        for unemployment insurance shall be eligible for the
10        amount of regular unemployment insurance determined
11        without regard to this Section.
12            v. An individual who is not provided any work by
13        the short-time compensation employer during a week,
14        but who works for another employer and is otherwise
15        eligible may be paid unemployment insurance for that
16        week subject to the disqualifying income and other
17        provisions applicable to claims for regular
18        unemployment insurance.
19    J. Short-time compensation shall be charged to employers in
20the same manner as unemployment insurance is charged under
21Illinois law. Employers liable for payments in lieu of
22contributions shall have short-time compensation attributed to
23service in their employ in the same manner as unemployment
24insurance is attributed. Notwithstanding any other provision
25to the contrary, to the extent that short-term compensation
26payments under this Section are reimbursed by the federal



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1government, no benefit charges or payments in lieu of
2contributions shall be accrued by a participating employer.
3    K. A short-time compensation plan shall not be approved for
4an employer that is delinquent in the filing of any reports
5required or the payment of contributions, payments in lieu of
6contributions, interest, or penalties due under this Act
7through the date of the employer's application.
8    L. Overpayments of other benefits under this Act may be
9recovered from an individual receiving short-time compensation
10under this Act in the manner provided under Sections 900 and
11901. Overpayments under the short-time compensation plan may be
12recovered from an individual receiving other benefits under
13this Act in the manner provided under Sections 900 and 901.
14    M. An individual who has received all of the short-time
15compensation or combined unemployment insurance and short-time
16compensation available in a benefit year shall be considered an
17exhaustee for purposes of extended benefits, as provided under
18the provisions of Section 409, and, if otherwise eligible under
19those provisions, shall be eligible to receive extended
21    (820 ILCS 405/702)  (from Ch. 48, par. 452)
22    Sec. 702. Determinations. The claims adjudicator shall for
23each week with respect to which the claimant claims benefits or
24waiting period credit, make a "determination" which shall state
25whether or not the claimant is eligible for such benefits or



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1waiting period credit and the sum to be paid the claimant with
2respect to such week. The claims adjudicator shall promptly
3notify the claimant and such employing unit as shall, within
4the time and in the manner prescribed by the Director, have
5filed a sufficient allegation that the claimant is ineligible
6to receive benefits or waiting period credit for said week, of
7his "determination" and the reasons therefor. The Director may,
8by rule adopted with the advice and aid of the Employment
9Security Advisory Board, require that an employing unit with 25
1050 or more individuals in its employ during a the prior
11calendar year, or an entity representing 5 or more employing
12units during a the prior calendar year, file an allegation of
13ineligibility electronically in a manner prescribed by the
14Director for the one year period commencing on July 1 of the
15immediately succeeding calendar year and ending on June 30 of
16the second succeeding calendar year. In making his
17"determination," the claims adjudicator shall give
18consideration to the information, if any, contained in the
19employing unit's allegation, whether or not the allegation is
20sufficient. The claims adjudicator shall deem an employing
21unit's allegation sufficient only if it contains a reason or
22reasons therefor (other than general conclusions of law, and
23statements such as "not actively seeking work" or "not
24available for work" shall be deemed, for this purpose, to be
25conclusions of law). If the claims adjudicator deems an
26allegation insufficient, he shall make a decision accordingly,



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1and shall notify the employing unit of such decision and the
2reasons therefor. Such decision may be appealed by the
3employing unit to a Referee within the time limits prescribed
4by Section 800 for appeal from a "determination". Any such
5appeal, and any appeal from the Referee's decision thereon,
6shall be governed by the applicable provisions of Sections 801,
7803, 804 and 805.
8(Source: P.A. 97-621, eff. 11-18-11.)
9    (820 ILCS 405/1402)  (from Ch. 48, par. 552)
10    Sec. 1402. Penalties.
11    A. If any employer fails, within the time prescribed in
12this Act as amended and in effect on October 5, 1980, and the
13regulations of the Director, to file a report of wages paid to
14each of his workers, or to file a sufficient report of such
15wages after having been notified by the Director to do so, for
16any period which begins prior to January 1, 1982, he shall pay
17to the Department as a penalty a sum determined in accordance
18with the provisions of this Act as amended and in effect on
19October 5, 1980.
20    B. Except as otherwise provided in this Section, any
21employer who fails to file a report of wages paid to each of
22his workers for any period which begins on or after January 1,
231982, within the time prescribed by the provisions of this Act
24and the regulations of the Director, or, if the Director
25pursuant to such regulations extends the time for filing the



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1report, fails to file it within the extended time, shall, in
2addition to any sum otherwise payable by him under the
3provisions of this Act, pay to the Department as a penalty a
4sum equal to the lesser of (1) $5 for each $10,000 or fraction
5thereof of the total wages for insured work paid by him during
6the period or (2) $2,500, for each month or part thereof of
7such failure to file the report. With respect to an employer
8who has elected to file reports of wages on an annual basis
9pursuant to Section 1400.2, in assessing penalties for the
10failure to submit all reports by the due date established
11pursuant to that Section, the 30-day period immediately
12following the due date shall be considered as one month.
13    If the Director deems an employer's report of wages paid to
14each of his workers for any period which begins on or after
15January 1, 1982, insufficient, he shall notify the employer to
16file a sufficient report. If the employer fails to file such
17sufficient report within 30 days after the mailing of the
18notice to him, he shall, in addition to any sum otherwise
19payable by him under the provisions of this Act, pay to the
20Department as a penalty a sum determined in accordance with the
21provisions of the first paragraph of this subsection, for each
22month or part thereof of such failure to file such sufficient
23report after the date of the notice.
24    For wages paid in calendar years prior to 1988, the penalty
25or penalties which accrue under the two foregoing paragraphs
26with respect to a report for any period shall not be less than



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1$100, and shall not exceed the lesser of (1) $10 for each
2$10,000 or fraction thereof of the total wages for insured work
3paid during the period or (2) $5,000. For wages paid in
4calendar years after 1987, the penalty or penalties which
5accrue under the 2 foregoing paragraphs with respect to a
6report for any period shall not be less than $50, and shall not
7exceed the lesser of (1) $10 for each $10,000 or fraction of
8the total wages for insured work paid during the period or (2)
9$5,000. With respect to an employer who has elected to file
10reports of wages on an annual basis pursuant to Section 1400.2,
11for purposes of calculating the minimum penalty prescribed by
12this Section for failure to file the reports on a timely basis,
13a calendar year shall constitute a single period. For reports
14of wages paid after 1986, the Director shall not, however,
15impose a penalty pursuant to either of the two foregoing
16paragraphs on any employer who can prove within 30 working days
17after the mailing of a notice of his failure to file such a
18report, that (1) the failure to file the report is his first
19such failure during the previous 20 consecutive calendar
20quarters, and (2) the amount of the total contributions due for
21the calendar quarter of such report (or, in the case of an
22employer who is required to file the reports on a monthly
23basis, the amount of the total contributions due for the
24calendar quarter that includes the month of such report) is
25less than $500.
26    For any month which begins on or after January 1, 2013, a



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1report of the wages paid to each of an employer's workers shall
2be due on or before the last day of the month next following
3the calendar month in which the wages were paid if the employer
4is required to report such wages electronically pursuant to the
5regulations of the Director; otherwise a report of the wages
6paid to each of the employer's workers shall be due on or
7before the last day of the month next following the calendar
8quarter in which the wages were paid.
9    Any employer who willfully wilfully fails to pay any
10contribution or part thereof, based upon wages paid prior to
111987, when required by the provisions of this Act and the
12regulations of the Director, with intent to defraud the
13Director, shall in addition to such contribution or part
14thereof pay to the Department a penalty equal to 50 percent of
15the amount of such contribution or part thereof, as the case
16may be, provided that the penalty shall not be less than $200.
17    Any employer who willfully fails to pay any contribution or
18part thereof, based upon wages paid in 1987 and in each
19calendar year thereafter, when required by the provisions of
20this Act and the regulations of the Director, with intent to
21defraud the Director, shall in addition to such contribution or
22part thereof pay to the Department a penalty equal to 60% of
23the amount of such contribution or part thereof, as the case
24may be, provided that the penalty shall not be less than $400.
25    However, all or part of any penalty may be waived by the
26Director for good cause shown.



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1    C. With regard to an employer required to report monthly
2pursuant to this Section, in addition to each employee's name,
3social security number, and wages for insured work paid during
4the period, the Director may, by rule, require a report to
5provide the following information concerning each employee:
6the employee's occupation, hours worked during the period,
7hourly wage, if applicable, and work location if the employer
8has more than one physical location. Notwithstanding any other
9provision of any other law to the contrary, information
10obtained pursuant to this subsection shall not be disclosed to
11any other public official or agency of this State or any other
12state to the extent it relates to a specifically identified
13individual or entity or to the extent that the identity of a
14specific individual or entity may be discerned from such
15information. The additional data elements required to be
16reported pursuant to the rule authorized by this subsection may
17be reported in the same electronic format as in the system
18maintained by the employer or employer's agent and need not be
20(Source: P.A. 97-689, eff. 6-14-12; 97-791, eff. 1-1-13;
2198-463, eff. 8-16-13.)
22    (820 ILCS 405/1402.1 new)
23    Sec. 1402.1. Processing fee.
24    A. The Director may, by rule, establish a processing fee of
25$50 with regard to a report of contributions due that is not



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1required to be submitted electronically if the employer fails
2to submit the report on the form designated by the Director or
3otherwise provide all of the information required by the form
4designated by the Director. With respect to the first instance
5of such a failure after the effective date of the rule, the
6Director shall issue the employer a written warning instead of
7a processing fee, and no such processing fee shall be assessed
8unless the Director has issued the employer a written warning
9for a prior failure.
10    B. The Director may, by rule, establish a processing fee of
11$50 with regard to any payment of contributions, payment in
12lieu of contributions, interest, or penalty that is not made
13through electronic funds transfer if the employer fails to
14enclose the payment coupon provided by the Director with its
15payment or otherwise provide all of the information the coupon
16would provide, regardless of the amount due. With respect to
17the first instance of such a failure after the effective date
18of the rule, the Director shall issue the employer a written
19warning instead of a processing fee, and no such processing fee
20shall be assessed unless the Director has issued the employer a
21written warning for a prior failure.
22    (820 ILCS 405/2101)  (from Ch. 48, par. 661)
23    Sec. 2101. Special administrative account. Except as
24provided in Section 2100, all interest and penalties collected
25pursuant to this Act shall be deposited in the special



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1administrative account. The amount in this account in excess of
2$100,000 on the close of business of the last day of each
3calendar quarter shall be immediately transferred to this
4State's account in the unemployment trust fund. However,
5subject to Section 2101.1, such funds shall not be transferred
6where it is determined by the Director that it is necessary to
7accumulate funds in the account in order to have sufficient
8funds to pay interest that may become due under the terms of
9Section 1202 (b) of the Federal Social Security Act, as
10amended, upon advances made to the Illinois Unemployment
11Insurance Trust Fund under Title XII of the Federal Social
12Security Act or where it is determined by the Director that it
13is necessary to accumulate funds in the special administrative
14account in order to have sufficient funds to expend for any
15other purpose authorized by this Section. The balance of funds
16in the special administrative account that are in excess of
17$100,000 on the first day of each calendar quarter and not
18transferred to this State's account in the unemployment trust
19fund, minus the amount reasonably anticipated to be needed to
20make payments from the special administrative account pursuant
21to subsections C through I, shall be certified by the Director
22and transferred by the State Comptroller to the Title III
23Social Security and Employment Fund in the State Treasury
24within 30 days of the first day of the calendar quarter. The
25Director may certify and the State Comptroller shall transfer
26such funds to the Title III Social Security and Employment Fund



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1on a more frequent basis. The moneys available in the special
2administrative account shall be expended upon the direction of
3the Director whenever it appears to him that such expenditure
4is necessary for:
5    A. 1. The proper administration of this Act and no Federal
6funds are available for the specific purpose for which such
7expenditure is to be made, provided the moneys are not
8substituted for appropriations from Federal funds, which in the
9absence of such moneys would be available and provided the
10monies are appropriated by the General Assembly.
11    2. The proper administration of this Act for which purpose
12appropriations from Federal funds have been requested but not
13yet received, provided the special administrative account will
14be reimbursed upon receipt of the requested Federal
16    B. To the extent possible, the repayment to the fund
17established for financing the cost of administration of this
18Act of moneys found by the Secretary of Labor of the United
19States of America, or other appropriate Federal agency, to have
20been lost or expended for purposes other than, or in amounts in
21excess of, those found necessary by the Secretary of Labor, or
22other appropriate Federal agency, for the administration of
23this Act.
24    C. The payment of refunds or adjustments of interest or
25penalties, paid pursuant to Sections 901 or 2201.
26    D. The payment of interest on refunds of erroneously paid



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1contributions, penalties and interest pursuant to Section
3    E. The payment or transfer of interest or penalties to any
4Federal or State agency, pursuant to reciprocal arrangements
5entered into by the Director under the provisions of Section
7    F. The payment of any costs incurred, pursuant to Section
9    G. Beginning January 1, 1989, for the payment for the legal
10services authorized by subsection B of Section 802, up to
11$1,000,000 per year for the representation of the individual
12claimants and up to $1,000,000 per year for the representation
13of "small employers".
14    H. The payment of any fees for collecting past due
15contributions, payments in lieu of contributions, penalties,
16and interest shall be paid (without an appropriation) from
17interest and penalty monies received from collection agents
18that have contracted with the Department under Section 2206 to
19collect such amounts, provided however, that the amount of such
20payment shall not exceed the amount of past due interest and
21penalty collected.
22    I. The payment of interest that may become due under the
23terms of Section 1202 (b) of the Federal Social Security Act,
24as amended, for advances made to the Illinois Unemployment
25Insurance Trust Fund.
26    The Director shall annually on or before the first day of



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1March report in writing to the Employment Security Advisory
2Board concerning the expenditures made from the special
3administrative account and the purposes for which funds are
4being accumulated.
5    If Federal legislation is enacted which will permit the use
6by the Director of some part of the contributions collected or
7to be collected under this Act, for the financing of
8expenditures incurred in the proper administration of this Act,
9then, upon the availability of such contributions for such
10purpose, the provisions of this Section shall be inoperative
11and interest and penalties collected pursuant to this Act shall
12be deposited in and be deemed a part of the clearing account.
13In the event of the enactment of the foregoing Federal
14legislation, and within 90 days after the date upon which
15contributions become available for expenditure for costs of
16administration, the total amount in the special administrative
17account shall be transferred to the clearing account, and after
18clearance thereof shall be deposited with the Secretary of the
19Treasury of the United States of America to the credit of the
20account of this State in the unemployment trust fund,
21established and maintained pursuant to the Federal Social
22Security Act, as amended.
23(Source: P.A. 94-1083, eff. 1-19-07.)
24    (820 ILCS 405/2201)  (from Ch. 48, par. 681)
25    Sec. 2201. Refund or adjustment of contributions. Not



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1later than 3 years after the date upon which the Director first
2notifies any contributions, interest or penalties thereon were
3paid, an employing unit that it which has paid such
4contributions, interest or penalties thereon erroneously, the
5employing unit may file a claim with the Director for an
6adjustment thereof in connection with subsequent contribution
7payments, or for a refund thereof where such adjustment cannot
8be made; provided, however, that no refund or adjustment shall
9be made of any contribution, the amount of which has been
10determined and assessed by the Director, if such contribution
11was paid after the determination and assessment of the Director
12became final, and provided, further, that any such adjustment
13or refund, involving contributions with respect to wages on the
14basis of which benefits have been paid, shall be reduced by the
15amount of benefits so paid. Upon receipt of a claim the
16Director shall make his determination, either allowing such
17claim in whole or in part, or ordering that it be denied, and
18serve notice upon the claimant of such determination. Such
19determination of the Director shall be final at the expiration
20of 20 days from the date of service of such notice unless the
21claimant shall have filed with the Director a written protest
22and a petition for hearing, specifying his objections thereto.
23Upon receipt of such petition within the 20 days allowed, the
24Director shall fix the time and place for a hearing and shall
25notify the claimant thereof. At any hearing held as herein
26provided, the determination of the Director shall be prima



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1facie correct and the burden shall be upon the protesting
2employing unit to prove that it is incorrect. All of the
3provisions of this Act applicable to hearings conducted
4pursuant to Section 2200 shall be applicable to hearings
5conducted pursuant to this Section. Upon the conclusion of such
6hearing, a decision shall be made by the Director and notice
7thereof given to the claimant. If the Director shall decide
8that the claim be allowed in whole or in part, or if such
9allowance be ordered by the Court pursuant to Section 2205 and
10the judgment of said Court has become final, the Director
11shall, if practicable, make adjustment without interest in
12connection with subsequent contribution payments by the
13claimant, and if adjustments thereof cannot practicably be made
14in connection with such subsequent contribution payments, then
15the Director shall refund to the claimant the amount so
16allowed, without interest except as otherwise provided in
17Section 2201.1 from moneys in the benefit account established
18by this Act. Nothing herein contained shall prohibit the
19Director from making adjustment or refund upon his own
20initiative, within the time allowed for filing claim therefor,
21provided that the Director shall make no refund or adjustment
22of any contribution, the amount of which he has previously
23determined and assessed, if such contribution was paid after
24the determination and assessment became final.
25    If this State should not be certified for any year by the
26Secretary of Labor of the United States of America, or other



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1appropriate Federal agency, under Section 3304 of the Federal
2Internal Revenue Code of 1954, the Director shall refund
3without interest to any instrumentality of the United States
4subject to this Act by virtue of permission granted in an Act
5of Congress, the amount of contributions paid by such
6instrumentality with respect to such year.
7    The Director may by regulation provide that, if there is a
8total credit balance of less than $2 in an employer's account
9with respect to contributions, interest, and penalties, the
10amount may be disregarded by the Director; once disregarded,
11the amount shall not be considered a credit balance in the
12account and shall not be subject to either an adjustment or a
14(Source: P.A. 90-554, eff. 12-12-97.)
15    (820 ILCS 405/2201.1)  (from Ch. 48, par. 681.1)
16    Sec. 2201.1. Interest on Overpaid Contributions, Penalties
17and Interest. The Director shall semi-annually quarterly
18furnish each employer with a statement of credit balances in
19the employer's account where the balances with respect to all
20contributions, interest and penalties combined equal or exceed
21$2. Under regulations prescribed by the Director and subject to
22the limitations of Section 2201, the employer may file a
23request for an adjustment or refund of the amount erroneously
24paid. Interest shall be paid on refunds of erroneously paid
25contributions, penalties and interest imposed by this Act,



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1except that if any refund is mailed by the Director within 90
2days after the date of the refund claim, no interest shall be
3due or paid. The interest shall begin to accrue as of the date
4of the refund claim and shall be paid at the rate of 1.5% per
5month computed at the rate of 12/365 of 1.5% for each day or
6fraction thereof. Interest paid pursuant to this Section shall
7be paid from monies in the special administrative account
8established by Sections 2100 and 2101. This Section shall apply
9only to refunds of contributions, penalties and interest which
10were paid as the result of wages paid after January 1, 1988.
11(Source: P.A. 90-554, eff. 12-12-97.)
12    (820 ILCS 405/2401)  (from Ch. 48, par. 721)
13    (Text of Section after amendment by P.A. 98-107)
14    Sec. 2401. Recording and release of lien. A. The lien
15created by Section 2400 shall be invalid only as to any
16innocent purchaser for value of stock in trade of any employer
17in the usual course of such employer's business, and shall be
18invalid as to any innocent purchaser for value of any of the
19other assets to which such lien has attached, unless notice
20thereof has been filed by the Director in the office of the
21recorder of the county within which the property subject to the
22lien is situated. The Director may, in his discretion, for good
23cause shown and upon the reimbursement of any recording fees
24paid by the Director with respect to the lien, issue a
25certificate of withdrawal of notice of lien filed against any



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1employer, which certificate shall be recorded in the same
2manner as herein provided for the recording of notice of liens.
3Such withdrawal of notice of lien shall invalidate such lien as
4against any person acquiring any of such employer's property or
5any interest therein, subsequent to the recordation of the
6withdrawal of notice of lien, but shall not otherwise affect
7the validity of such lien, nor shall it prevent the Director
8from re-recording notice of such lien. In the event notice of
9such lien is re-recorded, such notice shall be effective as
10against third persons only as of the date of such
12    B. The recorder of each county shall procure at the expense
13of the county a file labeled "Unemployment Compensation
14Contribution Lien Notice" and an index book labeled
15"Unemployment Compensation Contribution Lien Index." When a
16notice of any such lien is presented to him for filing, he
17shall file it in numerical order in the file and shall enter it
18alphabetically in the index. The entry shall show the name and
19last known business address of the employer named in the
20notice, the serial number of the notice, the date and hour of
21filing, and the amount of contribution, interest and penalty
22thereon due and unpaid. When a certificate of complete or
23partial release of such lien issued by the Director is
24presented for filing in the office of the recorder where a
25notice of lien was filed, the recorder shall permanently attach
26the certificate of release to the notice of lien and shall



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1enter the certificate of release and the date in the
2Unemployment Compensation Contribution Lien Index on the line
3where the notice of lien is entered. In case title to land to
4be affected by the Notice of Lien is registered under the
5provisions of "An Act Concerning Land Titles", approved May 1,
61897, as amended, such notice shall be filed in the office of
7the Registrar of Titles of the county within which the property
8subject to the lien is situated and shall be entered upon the
9register of titles as a memorial or charge upon each folium of
10the register of title affected by such notice, and the Director
11shall not have a preference over the rights of any bona fide
12purchaser, mortgagee, judgment creditor or other lien holder
13arising prior to the registration of such notice.
14    C. The Director shall have the power to issue a certificate
15of partial release of any part of the property subject to the
16lien, upon the reimbursement of any recording fees paid by the
17Director with respect to the lien, if he shall find that the
18fair market value of that part of such property remaining
19subject to the lien is at least equal to the amount of all
20prior liens upon such property plus double the amount of the
21liability for contributions, interest and penalties thereon
22remaining unsatisfied.
23    D. Where the amount of or the liability for the payment of
24any contribution, interest or penalty is contested by any
25employing unit against whose property a lien has attached, and
26the determination of the Director with reference to such



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1contribution has not become final, the Director may issue a
2certificate of release of lien upon the reimbursement of any
3recording fees paid by the Director with respect to the lien
4and the furnishing of bond by such employing unit in 125% the
5amount of the sum of such contribution, interest and penalty,
6for which lien is claimed, with good and sufficient surety to
7be approved by the Director conditioned upon the prompt payment
8of such contribution, together with interest and penalty
9thereon, by such employing unit to the Director immediately
10upon the decision of the Director in respect to the liability
11for such contribution, interest and penalty becoming final.
12    E. When a lien obtained pursuant to this Act has been
13satisfied and upon the reimbursement of any recording fees paid
14by the Director with respect to the lien, the Department shall
15issue a release to the person, or his agent, against whom the
16lien was obtained and such release shall contain in legible
17letters a statement as follows:
21    F. The Director may, by rule, require, as a condition of
22withdrawing, releasing, or partially releasing a lien recorded
23pursuant to this Section, that the employer reimburse the
24Department for any recording fees paid with respect to the
26(Source: P.A. 98-107, eff. 7-1-14.)



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1    (820 ILCS 405/1704.1 rep.)
2    Section 20. The Unemployment Insurance Act is amended by
3repealing Section 1704.1.
4    Section 99. Effective date. This Act takes effect July 1,
52014, except that the changes to Sections 2201 and 2201.1 of
6the Unemployment Insurance Act take effect January 1, 2015.