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Illinois Wage Payment and Collection Act (IWPCA) Guide

See how the Illinois Wage Payment and Collection Act covers foreign-owned and cross-border employers: paydays, final pay, deductions, pay stubs and penalties.

Last reviewed October 27, 2026 · 3 min read · General information, not legal advice

General information only, not legal advice. CPA Tax Payroll and Accounting Corp is a CPA firm, not a law firm. Laws change: confirm with the official source or a licensed attorney before you act. Read the full notice.

Illinois sets its pay rules in the Illinois Wage Payment and Collection Act, 820 ILCS 115 (IWPCA): when employers must pay wages, what they may deduct and what late pay costs. The Illinois Department of Labor (IDOL) takes wage claims; employees may also sue in circuit court. This page is for owners of Illinois businesses with Canada or India ties, such as an Indian-owned LLC in Aurora making a first hire.

Slide show: Wage payment law: seven quick slides

  1. What it is

    Illinois's wage-payment law. It sets paydays, final pay, deductions and pay stubs.

  2. Who it affects

    Any employer in Illinois, whatever its size. Local governments and school districts count too.

  3. The rule

    Pay at least semi-monthly, with a few monthly exceptions. Wages for a semi-monthly or bi-weekly period are due within 13 days after that period ends.

  4. The number

    A pay stub every pay period, kept 3 years. Copies are due within 21 days of a request.

  5. The deadline

    Final pay by the next regular payday. Bring IDOL claims within 1 year of the date the pay was due.

  6. The penalty

    5% a month on the underpayment, plus IDOL's fee, which since August 1, 2025 is $500, $750 or $1,250.

  7. The tip

    One written policy on final pay, deductions and expenses answers three sections at once.

Who does the Illinois Wage Payment and Collection Act cover?

QuestionAnswer
Which employers?All Illinois employers, whatever the size; this takes in local governments and school districts
Who falls outside it?Employees of the State or federal government
Who is an employee?Anyone permitted to work, unless all three of these hold: the person is free from control and direction; the work falls outside the usual course of the business or all its places of business; and the person runs an independently established business. Placement agencies follow a different rule on the second condition.
Union employees?Disputes under a union grievance procedure follow the union contract; overtime and prevailing-wage claims can go to IDOL

What it means for a foreign-owned or cross-border business

SituationWhat the law saysWhat to check
Illinois LLC or corporation owned from Canada or IndiaCovered like any Illinois employerPayday calendar, pay stubs, final-pay date
Owner or officer abroad who approves payrollAny officer or agent who knowingly permits a violation is treated as an employerWho signs off on deductions and final pay
Employee who works outside IllinoisIDOL requires work performed in Illinois to bring a claimWhere each person works; ask your attorney about mixed locations
Contractor paid by invoiceThe Act has its own three-part test; the IRS uses a different oneTest both
Remote or traveling staffThe paydays notice must also be emailed or posted on a website or intranet they useWhere staff actually see it

For the tax side of hiring from abroad, read hiring US employees from abroad. Illinois registrations are in our Illinois payroll guide; the US employer compliance checklist lists other first-hire steps.

Where to go next

The rules and checklist page has the numbers, 2025 changes and the Stub-Stamp-Settle Routine. Related: the federal Fair Labor Standards Act, the Cook County Minimum Wage Ordinance and the Illinois Human Rights Act.

Official sources

This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.