Cook County Enacts Wage Theft Ordinance with Serious Consequences for Employers

Megan Toth

Arnstein & Lehr Attorney Megan TothCook County recently became the largest county in the nation to pass a “wage theft” ordinance that will have significant consequences for employers that are located in, contract with, or do business in Cook County. Effective May 1, 2015, qualifying employers found in violation of any state or federal wage-payment laws within the past five years may face business license denial or revocation, be denied or lose existing contracts with Cook County, and face enormous property tax liability.

Under the Cook County Wage Theft Ordinance, any employer who, within the prior five-year period, has admitted or has been adjudicated liable in any judicial or administrative proceeding of committing a repeated or willful violation of federal or state wage payment laws will be ineligible to enter into a County contract, respond to a request for proposal from the County, or submit a bid to the County. The County may also issue a notice of default under existing contracts entered into after the effective date of the ordinance if it learns that an employer has violated wage payment laws within the last five years. Finally, unless expressly waived by the County, any employer who has been found liable for a repeated or willful violation of state or federal wage payment laws within the prior five years will be ineligible for certain tax incentives.

In addition to its obvious penal implications, the Wage Theft Ordinance also imposes new obligations on employers seeking to contract with the County, requesting tax incentives from the County, or applying for a general business license from the County after the effective date of the Ordinance. Any such employers now must attest, under oath that they have not been found to have willfully or repeatedly violated federal or state wage and hour laws, either by a court or an administrative agency, with the prior five-year period.

In light of the expansiveness of the ordinance and its serious consequences, employers should evaluate their wage and hour practices, both past and future, with a greater sense of caution and conservatism. Employers need to determine whether they have been found liable for wage and hour violations in the past before submitting any of the required affidavits to the County and should seek a waiver or exception from the County when applicable. Employers who are aware of potential wage and hour claims, or are currently facing such claims, should immediately seek counsel to address their potential exposure under the Wage Theft Ordinance. As with any new legislation, however, only time will tell how the Cook County Wage Theft Ordinance will be enforced and whether it will survive the inevitable legal challenges.

Should you have any questions regarding the Cook County Wage Theft Ordinance, please contact Megan P. Toth at 312-876-7812 or mptoth@arnstein.com, or your regular Arnstein & Lehr LLP attorney.

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