Bill Text: IL HB4733 | 2013-2014 | 98th General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Amends the Unemployment Insurance Act. Provides that the term "employment" does not include the delivery or distribution of newspapers or shopping news to the consumer, rather than to the ultimate consumer. Deletes provisions relating to delivery to the ultimate consumer. Effective immediately.

Spectrum: Partisan Bill (Democrat 14-0)

Status: (Engrossed - Dead) 2014-12-04 - Remove Chief Co-Sponsor Rep. David R. Leitch [HB4733 Detail]

Download: Illinois-2013-HB4733-Amended.html

---

Sen. John J. Cullerton

Filed: 5/30/2014

09800HB4733sam002 LRB098 16645 JLS 60495 a
AMENDMENT TO HOUSE BILL 4733
AMENDMENT NO. ______. Amend House Bill 4733 by replacing
everything after the enacting clause with the following:
"Section 1. Short title. This Act may be cited as the
Illinois State Training and Employment Program (I-STEP) Act.
Section 5. Definitions. In this Act:
"Agreement" means a written agreement between the
Department of Commerce and Economic Opportunity or the
Department of Employment Security and an employer or a business
association, labor organization, local workforce investment
board, community college, or nonprofit corporation concerning
a project and any amendments to that agreement.
"Base employment" means the highest number of workers
employed by the employer in the last 4 completed quarters
preceding the effective date of the agreement establishing the
project. The Department of Employment Security shall verify an

09800HB4733sam002 - 2 - LRB098 16645 JLS 60495 a
employer's base employment through means including, but not
limited to, wage reports submitted pursuant to the Unemployment
Insurance Act.
"Business association" means an organization formed under
Section 501(c)(6) of the Internal Revenue Code or a generally
recognized entity or organization that represents the
interests of multiple businesses in Illinois.
"Community college" means a community college as defined in
Section 1-2 of the Public Community College Act.
"Credit" or "I-STEP Credit" means an amount agreed to in an
agreement with an employer under this Act that does not exceed
the Incremental Income Tax attributable to the employer's
project.
"Employer" means a for-profit, legal entity, including,
but not limited to, a sole proprietorship, partnership,
corporation, joint venture, association, or cooperative, that
has in its employ one or more individuals performing services
for it.
"Federal minimum wage" means the minimum wage as defined by
the federal Fair Labor Standards Act (29 U.S.C. 201 et seq.).
"Full-time, permanent job" means a job in which the
employee works for the employer at a rate of at least 35 hours
per week.
"I-STEP Fund" means the fund established in Section 20 of
this Act.
"Incremental income tax" means the total amount withheld

09800HB4733sam002 - 3 - LRB098 16645 JLS 60495 a
during the taxable year under Article 7 of the Illinois Income
Tax Act from the compensation paid to employees in new jobs
that are the subject of an agreement.
"Labor organization" means an organization defined as a
"labor organization" under the National Labor Relations Act.
"New job" means a full-time, permanent job located in this
State that meets all of the following:
(1) The job results in a net increase in the base
employment in this State for the employer.
(2) The job is not being filled or refilled as a result
of a layoff or to replace an employee who is or has been on
strike or locked out by the employer.
(3) The job is not a job that existed in the employer's
business within this State within the last 4 completed
quarters preceding the effective date of the agreement.
(4) The wage paid for the job is equal to or exceeds
175% of the federal minimum wage on the effective date of
the agreement.
(5) The employer has posted the job on the
IllinoisJobLink.com System or its successor system for at
least 2 weeks preceding the effective date of the agreement
and did not locate an individual who has the requisite
expertise, experience, and background, except that this
requirement does not apply if either (i) the job would be
covered by a collective bargaining agreement between the
employer and a labor organization that includes provisions

09800HB4733sam002 - 4 - LRB098 16645 JLS 60495 a
concerning hiring or training or (ii) the employer does not
have employees performing services in this State as of the
effective date of the agreement.
A new job may not be filled by a child, grandchild, parent,
or spouse, other than a spouse who is legally separated from
the individual, of any individual who has a direct or indirect
ownership interest of at least 5% in the profits, capital, or
value of the employer.
"Program costs" means all necessary and incidental costs of
providing program services in connection with a project,
including administrative costs.
"Program services" includes, but is not limited to, any of
the following items needed to hire or train a worker for a new
job:
(1) Training or retraining including, but not limited
to, training or retraining provided by apprenticeship and
training programs approved by and registered with the
United States Department of Labor's Bureau of
Apprenticeship and Training.
(2) Adult basic education and job-related instruction.
(3) Developmental, readiness, and remedial education.
(4) Vocational and skill-assessment services and
testing.
(5) Training facilities, equipment, materials, and
supplies.
"Project" means an arrangement for program services that

09800HB4733sam002 - 5 - LRB098 16645 JLS 60495 a
are the subject of an agreement entered into under this Act.
Section 10. Agreement.
(a) The Director of Commerce and Economic Opportunity and
the Director of Employment Security shall each have the power
to enter into an agreement to establish a project with an
employer. The agreement may be directly with an employer or
with a business association, labor organization, local
workforce investment board, community college, or nonprofit
corporation acting on behalf of an employer. The Directors of
Commerce and Economic Opportunity and Employment Security may
consult with the I-STEP Panel before entering into an
agreement.
(b) An agreement shall, at a minimum:
(1) State the project's total program costs.
(2) State that the employer may use the I-STEP Credit
pursuant to Section 15 to reimburse up to 75% of the
project's total program costs. If the Department of
Employment Security or the Department of Commerce and
Economic Opportunity determines that the project will
reduce long-term unemployment in the State, the agreement
shall state that the employer may use the I-STEP Credit to
reimburse up to 100% of the project's total program costs.
(3) Describe the program services to be provided.
(4) Specify the number of new jobs covered by the
project.

09800HB4733sam002 - 6 - LRB098 16645 JLS 60495 a
(5) Include a certification by the employer that it
shall (i) offer to assume the collective bargaining
obligations of a prior employer, including any existing
collective bargaining agreement with the bargaining
representative of any existing collective bargaining unit
or units performing substantially similar work to the work
being performed by any employee in a new job and (ii) offer
employment to all employees currently employed in any
existing bargaining unit performing substantially similar
work to the work being performed by any employee in a new
job.
(6) Include a provision that fixes the maximum amount
of I-STEP Credit for the reimbursement of program costs for
each taxable year.
(7) Specify the duration of the I-STEP Credit and the
first taxable year for which the Credit may be claimed.
(8) Require that an employer shall at all times keep
proper books of record and account, in accordance with
generally accepted accounting principles consistently
applied, with the books, records, or papers related to the
agreement in the custody or control of the employer open
for reasonable inspection and audits by the Department of
Commerce and Economic Opportunity and Department of
Employment Security and including, without limitation, the
making of copies of the books, records, or papers and the
inspection or appraisal of any of the employer or project

09800HB4733sam002 - 7 - LRB098 16645 JLS 60495 a
assets related to the project.
(9) Indicate the amount of administrative costs that
the employer will be required to deposit into the I-STEP
Fund.
(10) Contain other provisions the Department of
Commerce and Economic Opportunity and Department of
Employment Security consider appropriate or necessary.
(c) The administrative costs of the Department of Commerce
and Economic Opportunity with respect to each project shall not
exceed 5% of the program costs. The Department of Employment
Security's administrative costs with respect to each project
shall not exceed 5% of the program costs. In the case of an
agreement between the Department of Commerce and Economic
Opportunity or the Department of Employment Security and a
business association, labor organization, local workforce
investment board, community college, or nonprofit corporation
acting on behalf of an employer, the administrative costs of
the business association, labor organization, local workforce
investment board, community college, or nonprofit corporation
shall not exceed 5% of the program costs and shall be in
addition to the program costs of the Department of Commerce and
Economic Opportunity and the Department of Employment
Security.
(d) The Department of Commerce and Economic Opportunity and
the Department of Employment Security shall annually report to
the General Assembly, no later than December 31, on the new

09800HB4733sam002 - 8 - LRB098 16645 JLS 60495 a
jobs created and amount of credits for which employers have
been certified as eligible pursuant to this Act.
(e) A summary of each agreement shall be posted on the
website maintained pursuant to the Corporate Accountability
for Tax Expenditures Act.
Section 15. I-STEP Credit.
(a) Subject to the conditions set forth in this Act, for
any taxable year ending on or after December 31, 2014, an
employer is entitled to a credit against its obligation to pay
over withholding under Section 704A of the Illinois Income Tax
Act, if the employer is awarded a Credit under this Act for
that taxable year.
(b) The duration of the credit may not exceed 10 taxable
years. The credit may be stated as a percentage of the
incremental income tax attributable to the employer's project
and shall include a fixed dollar limitation that shall not
exceed the amount calculated pursuant to paragraph (2) of
subsection (b) of Section 10.
(c) An employer claiming a credit under this Act shall
submit to the Department of Revenue a copy of the certificate
of verification under this Act for the taxable year. However,
failure to submit a copy of the certificate with the employer's
tax return shall not invalidate a claim for a credit.
(d) For an employer to be eligible for a certificate of
verification, the employer shall provide proof as required by

09800HB4733sam002 - 9 - LRB098 16645 JLS 60495 a
the Department of Commerce and Economic Opportunity or the
Department of Employment Security prior to the end of each
calendar year including, but not limited to, attestation by the
employer:
(1) regarding the number of new jobs specified in its
agreement and into which it has hired employees;
(2) that employees received the program services
specified in the agreement; and
(3) regarding the amount of program costs incurred by
the employer with respect to those new jobs.
(e) For a certificate of verification to be valid, it shall
be signed by the Director of Commerce and Economic Opportunity
or the Director of Employment Security.
Section 20. I-STEP Fund.
(a) There is established in the State treasury a special
fund to be known as the I-STEP Fund.
(b) Money received, earned, or collected pursuant to this
Act shall be credited to the I-STEP Fund. All interest earnings
on amounts within the I-STEP Fund shall accrue to the I-STEP
Fund. The I-STEP Fund may include such funds and accounts as
are necessary for the implementation and administration of this
Act. All sums recovered for losses sustained by the I-STEP Fund
shall be deposited into the I-STEP Fund.
(c) Moneys may be paid or expended from the I-STEP Fund for
the payment of administrative costs associated with projects

09800HB4733sam002 - 10 - LRB098 16645 JLS 60495 a
established pursuant to this Act.
(d) Any payments or expenditures from the I-STEP Fund,
other than administrative costs associated with projects
established pursuant to this Act, shall require the approval of
both the Director of Employment Security and the Director of
Commerce and Economic Opportunity.
Section 25. I-STEP Panel.
(a) There is created the I-STEP Panel. The I-STEP Panel
shall consist of the Director of Commerce and Economic
Opportunity and the Director of Employment Security, who shall
serve as co-chairpersons, and 11 members who shall be appointed
by the Governor with the advice and consent of the Senate.
(b) The members of the I-STEP Panel shall include a
representative from each of the following businesses and
groups: manufacturing, small business, a local or State
business association or chamber of commerce, building and
construction trades unions, a labor organization representing
workers engaged in manufacturing, a labor organization
representing workers engaged in service professions, a
not-for-profit corporation providing workforce training, a
community college, and a local workforce investment board.
There shall be 2 at-large voting members who reside within
counties or municipalities that have had an annual average
unemployment rate of at least 120% of the State's annual
average unemployment rate as reported by Department of

09800HB4733sam002 - 11 - LRB098 16645 JLS 60495 a
Employment Security for the 5 years preceding the date of
appointment. All appointments shall be made in a geographically
diverse manner.
(c) For the initial appointments to the I-STEP Panel, 5
members shall be appointed to serve a 2-year term and 6 members
shall be appointed to serve a 4-year term. Thereafter, all
appointments shall be for terms of 4 years. The initial term of
appointed members shall commence on January 1, 2015.
Thereafter, the terms of appointed members shall commence on
January 1, except in the case of an appointment to fill a
vacancy. Vacancies occurring among the members shall be filled
in the same manner as the original appointment for the
remainder of the unexpired term. For a vacancy occurring when
the Senate is not in session, the Governor may make a temporary
appointment until the next meeting of the Senate when a person
shall be nominated to fill the office, and, upon confirmation
by the Senate, he or she shall hold office during the remainder
of the term. A vacancy in membership does not impair the
ability of a quorum to exercise all rights and perform all
duties of the I-STEP Panel. A member is eligible for
reappointment.
(d) The I-STEP Panel shall advise the Department of
Commerce and Economic Opportunity and Department of Employment
Security on the implementation and administration of this Act.
(e) Members of the I-STEP Panel shall serve without
compensation, but shall be reimbursed for any necessary

09800HB4733sam002 - 12 - LRB098 16645 JLS 60495 a
expenses from funds appropriated for that purpose.
Section 30. Powers of the Departments. In addition to those
powers granted under the Civil Administrative Code of Illinois,
the Department of Commerce and Economic Opportunity and the
Department of Employment Security are granted and shall have
all the powers necessary or convenient to carry out and
effectuate the purposes and provisions of this Act. These
powers shall include, but are not limited to, power and
authority to:
(1) Jointly promulgate procedures or rules necessary
and appropriate for the administration of this Act,
establish forms for applications, notifications,
contracts, or any other agreements, and accept
applications at any time during the year.
(2) Establish, negotiate, and effectuate any term,
agreement, or other document with any person necessary or
appropriate to accomplish the purposes of this Act, and to
consent, subject to the provisions of any agreement with
another party, to the modification or restructuring of any
agreement made pursuant to this Act to which the Department
of Commerce and Economic Opportunity or the Department of
Employment Security is a party.
(3) Fix, determine, charge, and collect any premiums,
fees, charges, costs, and expenses from employers,
including, without limitation, application fees,

09800HB4733sam002 - 13 - LRB098 16645 JLS 60495 a
commitment fees, program fees, financing charges, or
publication fees, deemed appropriate to pay expenses
necessary or incident to the (i) administration, staffing,
or operation in connection with the Department of Commerce
and Economic Opportunity's or the Department of Employment
Security's activities under this Act, (ii) preparation,
implementation, and enforcement of the terms of the
agreement, or (iii) consultation, advisory and legal fees
and other costs; however, all fees and expenses incident
thereto shall be the responsibility of the employer.
(4) Provide for sufficient personnel to permit
administration, staffing, operation, and related support
required to adequately discharge its duties and
responsibilities described in this Act from funds made
available for that purpose.
(5) Gather information and conduct inquiries, in the
manner and by methods as deemed desirable including,
without limitation, gathering information with respect to
employers for the purpose of making any designations or
certifications necessary or desirable or to gather
information to assist the I-STEP Panel with any
recommendation or guidance in the furtherance of the
purposes of this Act.
Section 80. The Public Employment Office Act is amended by
changing Section 7 as follows:

09800HB4733sam002 - 14 - LRB098 16645 JLS 60495 a
(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 85. The State Finance Act is amended by adding
Section 5.855 as follows:
(30 ILCS 105/5.855 new)
Sec. 5.855. The I-STEP Fund.
Section 90. The Unemployment Insurance Act is amended by
changing Sections 206.1, 225, 245, 500, 611, 702, 1402, 1500,
1506.1, 2101, 2201, 2201.1, and 2401 and by adding Sections 502
and 1402.1 as follows:

09800HB4733sam002 - 15 - LRB098 16645 JLS 60495 a
(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

09800HB4733sam002 - 16 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 17 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 18 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 19 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 20 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 21 - LRB098 16645 JLS 60495 a
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 405/500) (from Ch. 48, par. 420)
Sec. 500. Eligibility for benefits. An unemployed
individual shall be eligible to receive benefits with respect
to any week only if the Director finds that:
A. He has registered for work at and thereafter has
continued to report at an employment office in accordance with
such regulations as the Director may prescribe, except that the
Director may, by regulation, waive or alter either or both of
the requirements of this subsection as to individuals attached
to regular jobs, and as to such other types of cases or
situations with respect to which he finds that compliance with
such requirements would be oppressive or inconsistent with the
purposes of this Act, provided that no such regulation shall
conflict with Section 400 of this Act.
B. He has made a claim for benefits with respect to such

09800HB4733sam002 - 22 - LRB098 16645 JLS 60495 a
week in accordance with such regulations as the Director may
prescribe.
C. He is able to work, and is available for work; provided
that during the period in question he was actively seeking work
and he has certified such. Whenever requested to do so by the
Director, the individual shall, in the manner the Director
prescribes by regulation, inform the Department of the places
at which he has sought work during the period in question.
Nothing in this subsection shall limit the Director's approval
of alternate methods of demonstrating an active search for work
based on regular reporting to a trade union office.
1. If an otherwise eligible individual is unable to
work or is unavailable for work on any normal workday of
the week, he shall be eligible to receive benefits with
respect to such week reduced by one-fifth of his weekly
benefit amount for each day of such inability to work or
unavailability for work. For the purposes of this
paragraph, an individual who reports on a day subsequent to
his designated report day shall be deemed unavailable for
work on his report day if his failure to report on that day
is without good cause, and on each intervening day, if any,
on which his failure to report is without good cause. As
used in the preceding sentence, "report day" means the day
which has been designated for the individual to report to
file his claim for benefits with respect to any week. This
paragraph shall not be construed so as to effect any change

09800HB4733sam002 - 23 - LRB098 16645 JLS 60495 a
in the status of part-time workers as defined in Section
407.
2. An individual shall be considered to be unavailable
for work on days listed as whole holidays in "An Act to
revise the law in relation to promissory notes, bonds, due
bills and other instruments in writing," approved March 18,
1874, as amended; on days which are holidays in his
religion or faith, and on days which are holidays according
to the custom of his trade or occupation, if his failure to
work on such day is a result of the holiday. In determining
the claimant's eligibility for benefits and the amount to
be paid him, with respect to the week in which such holiday
occurs, he shall have attributed to him as additional
earnings for that week an amount equal to one-fifth of his
weekly benefit amount for each normal work day on which he
does not work because of a holiday of the type above
enumerated.
3. An individual shall be deemed unavailable for work
if, after his separation from his most recent employing
unit, he has removed himself to and remains in a locality
where opportunities for work are substantially less
favorable than those in the locality he has left.
4. An individual shall be deemed unavailable for work
with respect to any week which occurs in a period when his
principal occupation is that of a student in attendance at,
or on vacation from, a public or private school.

09800HB4733sam002 - 24 - LRB098 16645 JLS 60495 a
5. Notwithstanding any other provisions of this Act, an
individual shall not be deemed unavailable for work or to
have failed actively to seek work, nor shall he be
ineligible for benefits by reason of the application of the
provisions of Section 603, with respect to any week,
because he is enrolled in and is in regular attendance at a
training course approved for him by the Director:
(a) but only if, with respect to that week, the
individual presents, upon request, to the claims
adjudicator referred to in Section 702 a statement
executed by a responsible person connected with the
training course, certifying that the individual was in
full-time attendance at such course during the week.
The Director may approve such course for an individual
only if he finds that (1) reasonable work opportunities
for which the individual is fitted by training and
experience do not exist in his locality; (2) the
training course relates to an occupation or skill for
which there are, or are expected to be in the immediate
future, reasonable work opportunities in his locality;
(3) the training course is offered by a competent and
reliable agency, educational institution, or employing
unit; (4) the individual has the required
qualifications and aptitudes to complete the course
successfully; and (5) the individual is not receiving
and is not eligible (other than because he has claimed

09800HB4733sam002 - 25 - LRB098 16645 JLS 60495 a
benefits under this Act) for subsistence payments or
similar assistance under any public or private
retraining program: Provided, that the Director shall
not disapprove such course solely by reason of clause
(5) if the subsistence payment or similar assistance is
subject to reduction by an amount equal to any benefits
payable to the individual under this Act in the absence
of the clause. In the event that an individual's weekly
unemployment compensation benefit is less than his
certified training allowance, that person shall be
eligible to receive his entire unemployment
compensation benefits, plus such supplemental training
allowances that would make an applicant's total weekly
benefit identical to the original certified training
allowance.
(b) The Director shall have the authority to grant
approval pursuant to subparagraph (a) above prior to an
individual's formal admission into a training course.
Requests for approval shall not be made more than 30
days prior to the actual starting date of such course.
Requests shall be made at the appropriate unemployment
office.
(c) The Director shall for purposes of paragraph C
have the authority to issue a blanket approval of
training programs implemented pursuant to the federal
Workforce Investment Act of 1998 if both the training

09800HB4733sam002 - 26 - LRB098 16645 JLS 60495 a
program and the criteria for an individual's
participation in such training meet the requirements
of this paragraph C.
(d) Notwithstanding the requirements of
subparagraph (a), the Director shall have the
authority to issue blanket approval of training
programs implemented under the terms of a collective
bargaining agreement.
(e) Notwithstanding any other provision of this
Act, program services implemented under the Illinois
State Training and Employment Program (I-STEP) Act
shall constitute training approved pursuant to this
paragraph C.
6. Notwithstanding any other provisions of this Act, an
individual shall not be deemed unavailable for work or to
have failed actively to seek work, nor shall he be
ineligible for benefits, by reason of the application of
the provisions of Section 603 with respect to any week
because he is in training approved under Section 236 (a)(1)
of the federal Trade Act of 1974, nor shall an individual
be ineligible for benefits under the provisions of Section
601 by reason of leaving work voluntarily to enter such
training if the work left is not of a substantially equal
or higher skill level than the individual's past adversely
affected employment as defined under the federal Trade Act
of 1974 and the wages for such work are less than 80% of

09800HB4733sam002 - 27 - LRB098 16645 JLS 60495 a
his average weekly wage as determined under the federal
Trade Act of 1974.
D. If his benefit year begins prior to July 6, 1975 or
subsequent to January 2, 1982, he has been unemployed for a
waiting period of 1 week during such benefit year. If his
benefit year begins on or after July 6, l975, but prior to
January 3, 1982, and his unemployment continues for more than
three weeks during such benefit year, he shall be eligible for
benefits with respect to each week of such unemployment,
including the first week thereof. An individual shall be deemed
to be unemployed within the meaning of this subsection while
receiving public assistance as remuneration for services
performed on work projects financed from funds made available
to governmental agencies for such purpose. No week shall be
counted as a week of unemployment for the purposes of this
subsection:
1. Unless it occurs within the benefit year which
includes the week with respect to which he claims payment
of benefits, provided that, for benefit years beginning
prior to January 3, 1982, this requirement shall not
interrupt the payment of benefits for consecutive weeks of
unemployment; and provided further that the week
immediately preceding a benefit year, if part of one
uninterrupted period of unemployment which continues into
such benefit year, shall be deemed (for the purpose of this
subsection only and with respect to benefit years beginning

09800HB4733sam002 - 28 - LRB098 16645 JLS 60495 a
prior to January 3, 1982, only) to be within such benefit
year, as well as within the preceding benefit year, if the
unemployed individual would, except for the provisions of
the first paragraph and paragraph 1 of this subsection and
of Section 605, be eligible for and entitled to benefits
for such week.
2. If benefits have been paid with respect thereto.
3. Unless the individual was eligible for benefits with
respect thereto except for the requirements of this
subsection and of Section 605.
E. With respect to any benefit year beginning prior to
January 3, 1982, he has been paid during his base period wages
for insured work not less than the amount specified in Section
500E of this Act as amended and in effect on October 5, 1980.
With respect to any benefit year beginning on or after January
3, 1982, he has been paid during his base period wages for
insured work equal to not less than $1,600, provided that he
has been paid wages for insured work equal to at least $440
during that part of his base period which does not include the
calendar quarter in which the wages paid to him were highest.
F. During that week he has participated in reemployment
services to which he has been referred, including but not
limited to job search assistance services, pursuant to a
profiling system established by the Director by rule in
conformity with Section 303(j)(1) of the federal Social
Security Act, unless the Director determines that:

09800HB4733sam002 - 29 - LRB098 16645 JLS 60495 a
1. the individual has completed such services; or
2. there is justifiable cause for the claimant's
failure to participate in such services.
This subsection F is added by this amendatory Act of 1995
to clarify authority already provided under subsections A and C
in connection with the unemployment insurance claimant
profiling system required under subsections (a)(10) and (j)(1)
of Section 303 of the federal Social Security Act as a
condition of federal funding for the administration of the
Unemployment Insurance Act.
(Source: P.A. 92-396, eff. 1-1-02.)
(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

09800HB4733sam002 - 30 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 31 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 32 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 33 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 34 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 35 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 36 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 37 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 38 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 39 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 40 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 41 - LRB098 16645 JLS 60495 a
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 405/611) (from Ch. 48, par. 441)
Sec. 611. Retirement pay. A. For the purposes of this
Section "disqualifying income" means:
1. The entire amount which an individual has received or
will receive with respect to a week in the form of a retirement

09800HB4733sam002 - 42 - LRB098 16645 JLS 60495 a
payment (a) from an individual or organization (i) for which he
performed services during his base period or which is liable
for benefit charges or payments in lieu of contributions as a
result of the payment of benefits to such individual and (ii)
which pays all of the cost of such retirement payment, or (b)
from a trust, annuity or insurance fund or under an annuity or
insurance contract, to or under which an individual or
organization for which he performed services during his base
period or which is liable for benefit charges or payments in
lieu of contributions as a result of the payment of benefits to
such individual pays or has paid all of the premiums or
contributions; and
2. One-half the amount which an individual has received or
will receive with respect to a week in the form of a retirement
payment (a) from an individual or organization (i) for which he
performed services during his base period or which is liable
for benefit charges or payments in lieu of contributions as a
result of the payment of benefits to such individual and (ii)
which pays some, but not all, of the cost of such retirement
payment, or (b) from a trust, annuity or insurance fund
(including primary social security old age and disability
retirement benefits, including those based on self-employment)
or under an annuity or insurance contract, to or under which an
individual or organization for which he performed services
during his base period or which is liable for benefit charges
or payments in lieu of contributions as a result of the payment

09800HB4733sam002 - 43 - LRB098 16645 JLS 60495 a
of benefits to such individual pays or has paid some, but not
all, of the premiums or contributions.
2.1. Notwithstanding paragraphs 1 and 2 above, none of the
amount that an individual has received or will receive with
respect to a week in the form of social security old age,
survivors, and disability benefits under 42 U.S.C. Section 401
et seq., including those based on self-employment, shall
constitute disqualifying income.
3. Notwithstanding paragraphs paragraph 1, and 2, and 2.1
above, the entire amount which an individual has received or
will receive, with respect to any week which begins after March
31, 1980, of any governmental or other pension, retirement, or
retired pay, annuity or any other similar periodic payment
which is based on any previous work of such individual during
his base period or which is liable for benefit charges or
payments in lieu of contributions as a result of the payment of
benefits to such individual. This paragraph shall be in effect
only if it is required as a condition for full tax credit
against the tax imposed by the Federal Unemployment Tax Act.
B. Whenever an individual has received or will receive a
retirement payment for a month, an amount shall be deemed to
have been paid him for each day equal to one-thirtieth of such
retirement payment. If the retirement payment is for a
half-month, an amount shall be deemed to have been paid the
individual for each day equal to one-fifteenth of such
retirement payment. If the retirement payment is for any other

09800HB4733sam002 - 44 - LRB098 16645 JLS 60495 a
period, an amount shall be deemed to have been paid the
individual for each day in such period equal to the retirement
payment divided by the number of days in the period.
C. An individual shall be ineligible for benefits for any
week with respect to which his disqualifying income equals or
exceeds his weekly benefit amount. If such disqualifying income
with respect to a week totals less than the benefits for which
he would otherwise be eligible under this Act, he shall be
paid, with respect to such week, benefits reduced by the amount
of such disqualifying income.
D. To assure full tax credit to the employers of this State
against the tax imposed by the Federal Unemployment Tax Act,
the Director shall take any action as may be necessary in the
administration of paragraph 3 of subsection A of this Section
to insure that the application of its provisions conform to the
requirements of such Federal Act as interpreted by the United
States Secretary of Labor or other appropriate Federal agency.
(Source: P.A. 86-3.)
(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

09800HB4733sam002 - 45 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 46 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 47 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 48 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 49 - LRB098 16645 JLS 60495 a
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,

09800HB4733sam002 - 50 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 51 - LRB098 16645 JLS 60495 a
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 405/1500) (from Ch. 48, par. 570)
Sec. 1500. Rate of contribution.
A. For the six months' period beginning July 1, 1937, and
for each of the calendar years 1938 to 1959, inclusive, each
employer shall pay contributions on wages at the percentages
specified in or determined in accordance with the provisions of

09800HB4733sam002 - 52 - LRB098 16645 JLS 60495 a
this Act as amended and in effect on July 11, 1957.
B. For the calendar years 1960 through 1983, each employer
shall pay contributions equal to 2.7 percent with respect to
wages for insured work paid during each such calendar year,
except that the contribution rate of each employer who has
incurred liability for the payment of contributions within each
of the three calendar years immediately preceding the calendar
year for which a rate is being determined, shall be determined
as provided in Sections 1501 to 1507, inclusive.
For the calendar year 1984 and each calendar year
thereafter, each employer shall pay contributions at a
percentage rate equal to the greatest of 2.7%, or 2.7%
multiplied by the current adjusted State experience factor, as
determined for each calendar year by the Director in accordance
with the provisions of Sections 1504 and 1505, or the average
contribution rate for his major classification in the Standard
Industrial Code, or another classification sanctioned by the
United States Department of Labor and prescribed by the
Director by rule, with respect to wages for insured work paid
during such year. The Director of Employment Security shall
determine for calendar year 1984 and each calendar year
thereafter by a method pursuant to adopted rules each
individual employer's industrial code and the average
contribution rate for each major classification in the Standard
Industrial Code, or each other classification sanctioned by the
United States Department of Labor and prescribed by the

09800HB4733sam002 - 53 - LRB098 16645 JLS 60495 a
Director by rule. Notwithstanding the preceding provisions of
this paragraph, the contribution rate for calendar years 1984,
1985 and 1986 of each employer who has incurred liability for
the payment of contributions within each of the two calendar
years immediately preceding the calendar year for which a rate
is being determined, and the contribution rate for calendar
year 1987 and each calendar year thereafter of each employer
who has incurred liability for the payment of contributions
within each of the three calendar years immediately preceding
the calendar year for which a rate is being determined shall be
determined as provided in Sections 1501 to 1507.1, inclusive.
Provided, however, that the contribution rate for calendar
years 1989 and 1990 of each employer who has had experience
with the risk of unemployment for at least 13 consecutive
months ending June 30 of the preceding calendar year shall be a
rate determined in accordance with this Section or a rate
determined as if it had been calculated in accordance with
Sections 1501 through 1507, inclusive, whichever is greater,
except that for purposes of calculating the benefit wage ratio
as provided in Section 1503, such benefit wage ratio shall be a
percentage equal to the total of benefit wages for the 12
consecutive calendar month period ending on the above preceding
June 30, divided by the total wages for insured work subject to
the payment of contributions under Sections 234, 235 and 245
for the same period and provided, further, however, that the
contribution rate for calendar year 1991 and for each calendar

09800HB4733sam002 - 54 - LRB098 16645 JLS 60495 a
year thereafter of each employer who has had experience with
the risk of unemployment for at least 13 consecutive months
ending June 30 of the preceding calendar year shall be a rate
determined in accordance with this Section or a rate determined
as if it had been calculated in accordance with Sections 1501
through 1507.1, inclusive, whichever is greater, except that
for purposes of calculating the benefit ratio as provided in
Section 1503.1, such benefit ratio shall be a percentage equal
to the total of benefit charges for the 12 consecutive calendar
month period ending on the above preceding June 30, multiplied
by the benefit conversion factor applicable to such year,
divided by the total wages for insured work subject to the
payment of contributions under Sections 234, 235 and 245 for
the same period.
B-5. Notwithstanding any other provision of this Section,
beginning in calendar year 2015, an employer's contribution
rate as determined pursuant to subsection B shall be reduced by
0.04% absolute. This amendatory Act of the 98th General
Assembly has no effect on the fund building rate determined
pursuant to Section 1506.3 or fund building receipts
attributable to the fund building rate.
C. Except as expressly provided in this Act, the provisions
of Sections 1500 to 1510, inclusive, do not apply to any
nonprofit organization for any period with respect to which it
does not incur liability for the payment of contributions by
reason of having elected to make payments in lieu of

09800HB4733sam002 - 55 - LRB098 16645 JLS 60495 a
contributions, or to any political subdivision or municipal
corporation for any period with respect to which it is not
subject to payments in lieu of contributions under the
provisions of paragraph 1 of Section 302C by reason of having
elected to make payments in lieu of contributions under
paragraph 2 of that Section or to any governmental entity
referred to in clause (B) of Section 211.1. Wages paid to an
individual which are subject to contributions under Section
1405 A, or on the basis of which benefits are paid to him which
are subject to payment in lieu of contributions under Sections
1403, 1404, or 1405 B, or under paragraph 2 of Section 302C,
shall not become benefit wages or benefit charges under the
provisions of Sections 1501 or 1501.1, respectively, except for
purposes of determining a rate of contribution for 1984 and
each calendar year thereafter for any governmental entity
referred to in clause (B) of Section 211.1 which does not elect
to make payments in lieu of contributions.
D. If an employer's business is closed solely because of
the entrance of one or more of the owners, partners, officers,
or the majority stockholder into the armed forces of the United
States, or of any of its allies, or of the United Nations, and,
if the business is resumed within two years after the discharge
or release of such person or persons from active duty in the
armed forces, the employer will be deemed to have incurred
liability for the payment of contributions continuously
throughout such period. Such an employer, for the purposes of

09800HB4733sam002 - 56 - LRB098 16645 JLS 60495 a
Section 1506.1, will be deemed to have paid contributions upon
wages for insured work during the applicable period specified
in Section 1503 on or before the date designated therein,
provided that no wages became benefit wages during the
applicable period specified in Section 1503.
(Source: P.A. 94-301, eff. 1-1-06.)
(820 ILCS 405/1506.1) (from Ch. 48, par. 576.1)
Sec. 1506.1. Determination of Employer's Contribution
Rate.
A. The contribution rate for any calendar year prior to
1991 of each employer whose contribution rate is determined as
provided in Sections 1501 through 1507, inclusive, shall be
determined in accordance with the provisions of this Act as
amended and in effect on November 18, 2011.
B. (Blank).
C. (Blank).
D. (Blank).
E. The contribution rate for calendar year 1991 and each
calendar year thereafter of each employer who has incurred
liability for the payment of contributions within each of the
three calendar years immediately preceding the calendar year
for which a rate is being determined shall be the product
obtained by multiplying the employer's benefit ratio defined by
Section 1503.1 for that calendar year by the adjusted state
experience factor for the same year, provided that:

09800HB4733sam002 - 57 - LRB098 16645 JLS 60495 a
1. Except as otherwise provided in this paragraph, an
employer's minimum contribution rate shall be the greater
of 0.2% or the product obtained by multiplying 0.2% by the
adjusted state experience factor for the applicable
calendar year. An employer's minimum contribution rate
shall be 0.1% for calendar year 1996. An employer's minimum
contribution rate shall be 0.0% for calendar years 2012
through 2019.
2. An employer's maximum contribution rate shall be the
greater of 6.4% or the product of 6.4% and the adjusted
state experience factor for the applicable calendar year.
3. If any product obtained in this subsection is not an
exact multiple of one-tenth of one percent, it shall be
increased or reduced, as the case may be to the nearer
multiple of one-tenth of one percent. If such product is
equally near to two multiples of one-tenth of one percent,
it shall be increased to the higher multiple of one-tenth
of one percent.
4. For purposes of this subsection, intermediate
Intermediate rates between such minimum and maximum rates
shall be at one-tenth of one percent intervals.
The contribution rate of each employer for whom wages
became benefit wages during the applicable period specified in
Section 1503 or for whom benefit payments became benefit
charges during the applicable period specified in Section
1503.1, but who did not report wages for insured work during

09800HB4733sam002 - 58 - LRB098 16645 JLS 60495 a
such period, shall be the maximum contribution rate as
determined by paragraph 2 of this subsection. The contribution
rate for each employer for whom no wages became benefit wages
during the applicable period specified in Section 1503 or for
whom no benefit payments became benefit charges during the
applicable period specified in Section 1503.1, and who did not
report wages for insured work during such period, shall be the
greater of 2.7% or 2.7% times the then current adjusted state
experience factor as determined by the Director in accordance
with the provisions of Sections 1504 and 1505.
F. (Blank).
G. Notwithstanding the other provisions of this Section, no
employer's contribution rate with respect to calendar year 1989
and each calendar year thereafter shall exceed 5.4% of the
wages for insured work paid by him during any calendar quarter,
if such wages paid during such calendar quarter total less than
$50,000, plus any applicable penalty contribution rate
calculated pursuant to subsection C of Section 1507.1.
H. Notwithstanding any other provision of this Section,
beginning in calendar year 2015, an employer's contribution
rate as determined under this Section, without regard to this
subsection, shall be reduced by 0.04% absolute but not below
0.0%. This amendatory Act of the 98th General Assembly has no
effect on the fund building rate determined pursuant to Section
1506.3 or fund building receipts attributable to the fund
building rate.

09800HB4733sam002 - 59 - LRB098 16645 JLS 60495 a
(Source: P.A. 97-621, eff. 11-18-11; 97-791, eff. 1-1-13.)
(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

09800HB4733sam002 - 60 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 61 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 62 - LRB098 16645 JLS 60495 a
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.
J. Expenses incurred by the Department in the
administration of the Illinois State Training and Employment
Program (I-STEP) Act.
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

09800HB4733sam002 - 63 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 64 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 65 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 66 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 67 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 68 - LRB098 16645 JLS 60495 a
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

09800HB4733sam002 - 69 - LRB098 16645 JLS 60495 a
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:

09800HB4733sam002 - 70 - LRB098 16645 JLS 60495 a
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 95. The Unemployment Insurance Act is amended by
repealing Section 1704.1.
Section 99. Effective date. This Act takes effect January
1, 2015.".