Law Notes

Corporate Transparency Act Mandatory Reporting for Most Companies

Effective January 1, 2024, the Corporate Transparency Act (“Act”) requires many of our local businesses to register with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). The purpose of the Act is to prevent criminal activity, such as tax fraud, money laundering, and financial terrorism, from occurring in businesses across the country. Qualifying companies must report certain information regarding their beneficial ownership interests and company applicant information. Reported information will become part of a national registry. Failure to register may result in stiff penalties, including fines of up to $10,000.00 and jail time of up to two years.

 The Act defines a reporting company as a corporation, limited liability company, or other similar entity that is created by the filing of a document with the Secretary of State or similar office. While the Act contains several reporting exemptions, most small businesses will be required to report under the Act.

If a company qualifies as a reporting company, the company must report the beneficial owners and company applicants in a portal on the FinCEN website. A beneficial owner includes any individual who exercises substantial control over a reporting company or owns or controls at least 25 percent of the ownership interests of a reporting company. Company applicants include the individual who directly filed the document that created the reporting company and the individual primarily responsible for directing or controlling the filing of the creation or first registration document.  

Each reporting company must disclose certain required information about the company and its beneficial owners and company applicants. If the reporting company was established before January 1, 2024, the reporting company has until January 1, 2025, to report the required information to FinCEN. If a company forms after January 1, 2024, and qualifies under the Act, the company will have ninety (90) days from the date of its formation to report the required information. Fortunately, a reporting company only needs to register and report with FinCEN once unless there is a subsequent change in the information provided for the company, a beneficial owner, or company applicant. For example, if a beneficial owner gets a new driver’s license or changes his or her address, the company will need to update its information with FinCEN. A company will only have thirty (30) days from the date of any change to report the new information to FinCEN.

When determining whether your business qualifies as a reporting company under the Act, you are strongly advised to consult a legal advisor. Please do not hesitate to contact an attorney regarding the reporting requirements of your business under the Corporate Transparency Act.

Beware of Illinois Business Scam

Recently, the Illinois Secretary of State warned businesses regarding a scam. The scam involves an organization known as “Corporate Meeting Minutes” that mails business owners a letter seeking $148.67 for an “Annual Statement” fee. This is different from the annual reports that are required for many businesses. Illinois law does not require corporations, LLCs, or other business entities within the state to file a document called “Annual Statement.” Business owners are cautioned to confirm the validity of any suspicious communications regarding required business filings and contact their attorney or the Illinois Secretary of State directly with any concerns.

ATTORNEY CHRISTINA WELLER ELECTED TO ILLINOIS FARM BUREAU YOUNG LEADER POSITION

             At the annual Illinois Farm Bureau meeting in December, Attorney Christina Weller was elected as the Illinois Farm Bureau Young Leader Chair of the Governmental Affairs and Commodities Subcommittee. Attorney Weller was elected by eighteen of her fellow Illinois Farm Bureau Young Leaders to serve in this exciting role. She has experience in this area, as she has participated in the Illinois Farm Bureau’s Leaders to Washington program twice and has attended the Illinois Farm Bureau’s Governmental Affairs Leadership Conference.

          The Illinois Farm Bureau is a grassroots organization dedicated to serving farmers and committed to promoting Illinois agriculture. The Illinois Farm Bureau provides education and information to help farmers, while supporting legislation and lobbying efforts about agricultural issues. In addition, the Illinois Farm Bureau has developed the Young Leader program, which provides opportunities for individuals aged 18-35 to fuel their passion for agriculture. Young Leaders participate in a variety of local and statewide events hosted by state and county farm bureaus that promote personal growth and development and give back to communities.

Advocating for farmers comes naturally to Attorney Weller, who has been serving the Northwestern Illinois agriculture community’s legal needs since 2018. Her agricultural background coupled with her enthusiasm for helping others makes her a natural fit for the Illinois Farm Bureau organization. She is proud to represent Stephenson County and District 2 on a statewide level, while promoting the industry that she has been passionate about since a young age. Through her involvement with the Illinois Farm Bureau Young Leaders, Attorney Weller has met many farmers and industry professionals across the state while expanding her knowledge of the industry.

Since being selected as the District 2 Young Leader Representative in 2022, Attorney Weller has been busy. She has attended numerous Young Leader events and meetings in Boone, Carroll, Jo Daviess, Ogle, Stephenson, and Winnebago counties. She hosted the District 2 Young Leader Discussion meet at the Stephenson County Farm Bureau in August. In November, she traveled to Bloomington, Illinois, to meet with board members and observe an Illinois Farm Bureau board of directors meeting. Attorney Weller also served as a voting delegate for the Stephenson County Farm Bureau at the annual Illinois Farm Bureau meeting in Chicago, Illinois, in December, marking her fifth year representing the Stephenson County Farm

 Bureau as a delegate.

          Attorney Weller’s duties as Chair include organizing the annual Illinois Young Leader Ag Industry Tour. This event provides an opportunity for Illinois farmers to experience agriculture in

other parts of the country and internationally. Most recently, past participants have toured the vineyards of California and fished for lobster off the coast of Massachusetts. Attorney Weller attended the industry tour trip to Boston a few years ago, stating that the trip was one of the best experiences that she has participated in because the Ag Industry Tour is not only educational, but it also provides participants with an opportunity to develop friendships.

          Additionally, Attorney Weller will assist with the planning of the Harvest for All program. Harvest for All is a program organized by the Illinois Farm Bureau Young Leaders to fight food insecurity. The Young Leaders promote a statewide effort to help feed the hungry in Illinois by encouraging each county’s Young Leader group to develop and execute a Harvest for All project tailored to fit the needs of their local communities.

If you are interested in learning more about the Illinois Farm Bureau, please contact Attorney Christina Weller by email at cmw@etwlawyers.com or your local Illinois Farm Bureau county manager.

NEW IN 2024: ILLINOS CIVIL LIABILITY FOR DOXING ACT

             Effective January 1, 2024, the Civil Liability for Doxing Act (“Act”) creates a civil cause of action if an individual intentionally publishes another person’s personally identifiable information without the consent of the person whose information is published. The act of publishing someone else’s personal information without their permission is known as doxing. Under the Act, doxing targets may seek damages including reasonable attorney’s fees and a court order for the doxing to cease.

The Act defines “personally identifiable information” as any information that can be used to distinguish or trace a person’s identity. Such information includes a person’s name, prior legal names or aliases, family names (i.e., mother’s maiden name), date and place of birth, social security number, home address, phone numbers, email addresses, social media accounts, and biometric data. Medical, financial, educational, consumer, or employment records are also considered personally identifiable information under the Act.

           An individual publishes personally identifiable information when they make that information available to another person, including through electronic communication to two or more people. However, writings or electronic communications to one other person via private communications for which an individual has a reasonable expectation of privacy are not considered published under the Act. For example, private communications could include texting or emailing.

To qualify as an offense under the statute, the Act provides that the personally identifiable information must be published with the intent to harm or harass the doxing target. The publisher must also know or recklessly disregard that the doxing target could suffer harm, such as death, bodily injury, or stalking, as a result of publishing the personally identifiable information. Additionally, the published information must cause the doxing target to suffer economic injury, emotional distress, or substantial life disruption or to fear serious bodily injury or death of themselves, a family member, or a household member. Lastly, the doxing target must be identifiable from the distributed information.

There are several exceptions that do not constitute an offense under the Act, such as reporting someone’s personally identifiable information in connection with unlawful behavior. Please contact an attorney with any questions or concerns regarding this new law.

NEW ILLINOIS REQUIREMENTS EMPLOYERS & STAFFING AGENCIES SHOULD KNOW

Illinois Secure Choice Savings Act Update

Under the Illinois Secure Choice Savings Program Act (“Act”) certain Illinois businesses that did not sponsor a qualified retirement savings plan in the last two years are required to enroll in the retirement savings program.

This program is a Roth Individual Retirement Account (IRA), meaning that employees contribute to the plan using post-tax wages withheld from the employee’s total earnings. When employees retire, they usually may draw from their Roth IRA tax-free. Employers may not contribute to the retirement plan, and the annual contribution limit for employees is $6,000, unless the employee is 50 years or older. Then, the employee may contribute $7,000 annually to their Secure Choice IRA. 

There are significant penalties for failure to enroll in the program as required by the Act, and there are specific reporting requirements for participating businesses. Businesses may opt out of the program if they sponsor their own qualified retirement plan. If employers choose to sponsor their own plan, they must report their exemption from the program through the Illinois Secure Choice website. Employers are encouraged to consult with their legal advisors to ensure compliance with the Act or to confirm exemption from the Act.

New Paid Leave for All Workers Act

A new Illinois law providing paid leave for most Illinois employees began on January 1, 2024. The Paid Leave for All Workers Act (“Act”) requires most Illinois employers to offer employees a minimum of 40 hours of paid leave per year. Under the Act, paid leave accrues at a rate of one hour for every 40 hours worked. Employers are required to pay full wages to employees who take leave, including minimum wage payments for tipped workers. Employers must also allow employees to roll over unused, accrued leave from one year to the next unless the 40 hours of paid leave are provided to an employee on the first day of employment or the first day of the 12-month period. 

Employers may not be required to disclose their reasons for taking leave, nor may they be required to find their own replacements during their leave. However, employers may still direct employees to provide notice of leave as soon as practicable and establish some parameters for taking leave. Violators of the Act can face significant fines and may be liable for damages, including attorney’s fees.

Existing leave policies can satisfy the requirements under the Act if the policies provide the minimum amount of leave required under the Act and permit leave to be taken for any reason. Nevertheless, all employers should ensure they comply with the notice and recordkeeping requirements, including displaying a notice about the Act to employees and maintaining accurate records that reflect hours worked, paid leave accrued and used, and remaining paid leave for every

employee.

Illinois Gender Violence Act Amended to Apply to Employers

Effective January 1, 2024, the amended Illinois Gender Violence Act (“Act”) expressly provides that employees may hold their employers liable for failing to “supervise, train, or monitor” an employee who engages in gender-related violence, failing to investigate complaints of gender-related violence made to a supervisor, owner, or other similarly designated person, or failing to take remedial measures after being informed of alleged misconduct in or relating to the workplace. An employer is liable if the employer has acted in a manner inconsistent with how a reasonable person would act under similar circumstances. The definition of gender-related violence was also expanded under the Act. The court may award actual damages, damages for emotional distress, punitive damages, injunctive relief, or other appropriate relief. A judgment may also include attorney’s fees and court costs.

Alleged victims of gender-related violence may bring legal actions against their employers up to four years after the alleged violence occurs (or 4 years after the victim turns 18, if a minor). Employers who provide adequate sexual harassment training required by the Human Rights Act may use the training as a defense against a liability claim for failing to “supervise, train, or monitor” an employee that arises under the Act. Employers are encouraged to consult with their attorney regarding adequate training and written employment policies that should be in place to prevent claims and maintain employee safety.

 Illinois Equal Pay Act Amended

         Employers in Illinois may be required to change job postings under the amended Illinois Equal Pay Act (“Act”). Effective January 1, 2025, the Act will require most Illinois employers with 15 or more employees to include the pay scale and benefits of a position in job postings.

           To meet the new requirements, employers can include a hyperlink to a publicly viewable webpage that displays information about the position’s wage or salary range and a general description of benefits and other compensation offered for the position. Additionally, employers must now announce all opportunities for promotion to all employees within 14 calendar days after the employer externally posts a job opening. 

Employers who use third-party vendors to post jobs must provide their vendors with the required information. If the required information is provided but the job posting violates the new provisions under the Act, third-party vendors can be held liable for any resulting violations.

          Failure to include the required information on a job posting can lead to fines and penalties on a graduated scale, depending upon the number of violations incurred, but the Act also provides cure periods for employers to correct violations and avoid penalties. Private and public sector employers and third-party staffing agencies should ensure their compliance with the amended Act to avoid costly fines for violations.

Amendment to Illinois Day and Temporary

Labor Services Act

On August 4, 2023, the Illinois Day and Temporary Labor Services Act (“Act”) was amended to require temporary labor service agencies to compensate temporary workers with an equivalent rate of pay and benefits as those received by direct-hire workers. Temporary workers must be employed for 90 consecutive days by the employer providing the pay and benefits to qualify for equal compensation. The deadline for employers to implement equal pay under the amended Act is April 1, 2024.

Employers and staffing agencies that work with temporary workers should be aware of these recent amendments to ensure compliance and avoid violations. The amended Act imposes registration, investigation, and reporting requirements on temporary staffing agencies and expands parties eligible to file complaints against staffing agencies.

The Act also increases the remedies available to temporary workers if their employers violate the Act. Penalties for initial violations include monetary penalties ranging from $100 to $18,000 per violation, and secondary violation penalties ranging from $250 to $7,500. Violations are counted per affected employee per day that each violation continues. Successful parties receive 10% of assessed statutory penalties, expenses, and attorney’s fees. The Illinois Attorney General may also request revocation of a staffing agency’s registration.

A complete discussion of employment laws and amendments is beyond the scope of this article. Please contact an attorney with questions or concerns regarding these changes or legal matters related to employment law.

3-YEAR FISHING, HUNTING, AND TRAPPING LICENSES NOW AVAILABLE IN ILLINOIS

Effective January 1, 2024, Illinois fishers, hunters, and trappers will have the option to purchase a 3-year license instead of the 1-year or lifetime licenses that are currently available. A sportsman’s combination license, which includes both fishing and hunting, is also available as a 3-year license. Additionally, automatic renewal of fishing and hunting licenses is available to license-holders upon request.

The 3-year license will cost three times the annual fee. However, half-priced licenses are available for any Illinoisian who is a veteran of the United States Armed Forces or who is aged 65 years older.  

EXPANDED UNINSURED MOTORIST COVERAGE

The Illinois Supreme Court recently held that a minor bicyclist struck by an uninsured motorist was insured under the uninsured motorist coverage of his father’s insurance policy even though the minor was not driving a motor vehicle. This holding is noteworthy because the case covered a bicycle, which is not a motor vehicle. It is unknown how far this ruling will be applied in the future to other situations involving other modes of transportation that are not typically licensed motor vehicles.

For questions relating to uninsured motorist coverage in a particular situation, please contact an attorney. 

OFFICE NEWS

Elliott, Trainor & Weller, P.C. is excited to announce Caley Marten has joined the firm as a legal assistant.

Elliott, Trainor & Weller, P.C. is also thrilled to announce Rhonda Brudi, who has been with the firm for seven years, has accepted a full-time position.

Attorney Endress recently joined Freeport Rotary Club. She has enjoyed meeting new people and volunteering in the community.

Attorneys Trainor and Endress had the opportunity to present a seminar on business organizations at the Greater Freeport Partnership Basecamp Series in February. If you would like us to conduct a seminar about a legal practice area, please contact us.

Please visit our website for past Newsletters and additional information about our firm at

https://www.etwlawyers.com/.