SB3163 99TH GENERAL ASSEMBLY

LRB099 12727 SXM 36512 b

99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB3163

Introduced 2/19/2016, by Sen. Patricia Van Pelt

SYNOPSIS AS INTRODUCED:

New Act

Creates the Illinois Freedom to Work Act. Provides that no employer shall enter into a covenant not to compete with any low-wage employee of the employer. Sets forth provisions providing that the Director of the Department of Labor shall adjust for inflation. Provides that in order for an employer to require an employee to enter into a covenant not to compete, the employer shall, prior to the employment of such employee and at the beginning of the process for hiring such employee, have disclosed to such employee the requirement for entering into such covenant. Sets forth provisions providing how the Director shall receive, investigate, attempt to resolve, and enforce complaints. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning employment.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Illinois Freedom to Work Act.

Section 5. Definitions. In this Act:

"Covenant not to compete" means an agreement:

(1) between an employer and employee that restricts such employee from performing:

(A) any work for another employer for a specified period of time;

(B) any work in a specified geographical area; or

(C) work for another employer that is similar to such employee's work for the employer included as a party to the agreement; and

(2) that is entered into after the effective date of this Act.

"Director" means the Director of the Department of Labor.

"Employee" includes any individual permitted to work by an employer in an industry, trade, business, or class of work.

"Employer" has the meaning given to such term in subsection (c) of Section 3 of the Minimum Wage Law.

"Livable hourly rate" means:

(1) for the fiscal year of the date of enactment of this Act, the greater of:

(A) $15 per hour; or

(B) the hourly rate equal to the minimum wage required by the applicable federal, State, or local minimum wage law; and

(2) for each succeeding fiscal year, the greater of:

(A) the adjusted amount described in paragraph (1) of subsection (d) of Section 10 of this Act; or

(B) the hourly rate equal to the minimum wage required by the applicable federal, State, or local minimum wage law.

"Low-wage employee":

(1) means an employee who, excluding any overtime compensation required under any applicable federal or State law, receives from the applicable employer:

(A) an hourly compensation that is less than the livable hourly rate; or

(B) an annual compensation that is equal to or less than:

(i) for the fiscal year of the date of enactment of this Act, $36,375 per year; and

(ii) for each succeeding fiscal year, the adjusted amount described in paragraph (1) of subsection (d) of Section 10 of this Act; and

(2) does not include any salaried employee who receives from the applicable employer compensation that, for 2 consecutive months, is greater than:

(A) for the fiscal year of the date of enactment of this Act, $5,000; and

(B) for each succeeding fiscal year, the adjusted amount described in paragraph (1) of subsection (d) of Section 10 of this Act.

Section 10. Prohibiting covenants not to compete for low-wage employees.

(a) No employer shall enter into a covenant not to compete with any low-wage employee of the employer.

(b) A covenant not to compete entered into between an employer and a low-wage employee is illegal and void.

(c) An employer who employs any low-wage employee shall post notice of the provisions of this Act in a conspicuous place on the premises of such employer.

(d) Inflation adjustment.

(1) For each fiscal year after the fiscal year of the date of enactment of this Act, the Director shall adjust each amount in effect under Section 5 of this Act for inflation by increasing each such amount, as in effect for the preceding fiscal year, by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (United States city average, all items, not seasonally adjusted), or its successor publication, as determined by the United States Department of Labor Bureau of Labor Statistics.

(2) The amounts adjusted under paragraph (1) of this subsection (d) shall be rounded to the nearest multiple of $0.05.

Section 15. Disclosure requirement for covenants not to compete. In order for an employer to require an employee to enter into a covenant not to compete, the employer shall, prior to the employment of such employee and at the beginning of the process for hiring such employee, have disclosed to such employee the requirement for entering into such covenant.

Section 20. Director's duties. The Director or his authorized representatives have the authority to:

(a) Investigate and gather data regarding hiring, covenants not to compete, and other conditions and practices of employment in any industry subject to this Act, and may enter and inspect such places and such records (and make such transcriptions thereof) at reasonable times during regular business hours, not including lunch time at a restaurant, question such employees, and investigate such facts, conditions, practices or matters as he may deem necessary or appropriate to determine whether any person has violated any provision of this Act, or which may aid in the enforcement of this Act.

(b) Require from any employer full and correct statements and reports in writing, including sworn statements, at such times as the Director may deem necessary, of hiring, covenants not to compete, names, addresses, and other information pertaining to his employees as he may deem necessary for the enforcement of this Act.

(c) Require by subpoena the attendance and testimony of witnesses and the production of all books, records, and other evidence relative to a matter under investigation or hearing. The subpoena shall be signed and issued by the Director or his or her authorized representative. If a person fails to comply with any subpoena lawfully issued under this Section or a witness refuses to produce evidence or testify to any matter regarding which he or she may be lawfully interrogated, the court may, upon application of the Director or his or her authorized representative, compel obedience by proceedings for contempt.

Section 25. Employer duties. Every employer subject to any provision of this Act or of any order issued under this Act shall make and keep for a period of not less than 3 years, true and accurate records of the name, address and occupation of each of his or her employees, all interviews and meetings pertaining to the hiring process, including, but not limited to, discussions of covenants not to compete, and such other information and make such reports therefrom to the Director as the Director may by regulation prescribe as necessary or appropriate for the enforcement of the provisions of this Act or of the regulations thereunder. Such records shall be open for inspection or transcription by the Director or his authorized representative at any reasonable time as limited by paragraph (a) of Section 20 of this Act. Every employer shall furnish to the Director or his authorized representative on demand a sworn statement of such records and information upon forms prescribed or approved by the Director.

Section 30. Employer records. Every employer subject to any provision of this Act or of any regulations issued under this Act shall keep a summary of this Act approved by the Director, and copies of any applicable regulations issued under this Act or a summary of such regulations, posted in a conspicuous and accessible place in or about the premises wherever any person subject to this Act is employed. Employers shall be furnished copies of such summaries and regulations by the State on request without charge.

Section 35. Administrative rules.

(a) The Director shall make and revise rules, including definitions of terms, as he deems appropriate to carry out the purposes of this Act, to prevent the circumvention or evasion thereof, and to safeguard the requirements governing covenants not to compete established by the Act.

(b) The Department may adopt those rules necessary to carry out the purposes of this Act, according to the provisions of the Illinois Administrative Procedure Act.

(c) The commencement of proceedings by any person aggrieved by a rule adopted under this Act does not, unless specifically ordered by the Court, operate as a stay of that rule against other persons.

Section 40. Violations; Department duties.

(a) Any employer or his agent, or the officer or agent of any private employer who:

(1) hinders or delays the Director or his authorized representative in the performance of his duties in the enforcement of this Act; or

(2) refuses to admit the Director or his authorized representative to any place of employment; or

(3) fails to keep the records required under this Act or to furnish such records required or any information to be furnished under this Act to the Director or his authorized representative upon request; or

(4) fails to make and preserve any records as required hereunder; or

(5) falsifies any such record; or

(6) refuses to make such records available to the Director or his authorized representative; or

(7) refuses to furnish a sworn statement of such records or any other information required for the proper enforcement of this Act; or

(8) fails to post a summary of this Act or a copy of any applicable regulation as required by Section 30 of this Act; shall be guilty of a Class B misdemeanor; and each day of such failure to keep the records required under this Act or to furnish such records or information to the Director or his authorized representative or to fail to post information as required herein constitutes a separate offense.

(b) Any employer or his agent, or the officer or agent of any private employer, who discharges or in any other manner discriminates against any employee because that employee has made a complaint to his employer, or to the Director or his authorized representative, this Act, or because that employee has caused to be instituted or is about to cause to be instituted any proceeding under or related to this Act, or because that employee has testified or is about to testify in an investigation or proceeding under this Act, is guilty of a Class B misdemeanor.

(c) It is the duty of the Department to inquire diligently for any violations of this Act, and to institute the action for penalties herein provided, and to enforce generally the provisions of this Act.

Section 45. Civil fine.

(1) The Director shall impose a civil fine:

(A) with respect to any employer who violates subsection (a) of Section 10 or Section 15 of this Act, with an amount not to exceed $5,000 for each employee who was the subject of such violation; and

(B) with respect to any employer who violates subsection (c) of Section 10, with an amount not to exceed $5,000.

(2) In determining the amount of any civil fine under this Section, the Director shall consider the appropriateness of the fine to the size of the employer subject to such fine and the gravity of the applicable violation.

Section 99. Effective date. This Act takes effect upon becoming law.