Government Severance Pay Act Becomes Law in Illinois

Government Severance Pay Act Becomes Law in Illinois

  Wednesday, August 15, 2018    Julie Tappendorf

---

Yesterday, the Government Severance Pay Act became law when it was approved by the Illinois Governor. P.A. 100-895. We reported on this legislation when the bill was introduced earlier this year.

Under the new law, any covered unit of government that enters into a contract or employment agreement, or renews or renegotiates an existing contract or agreement, with an officer, agent, employee, or contractor must include the following provisions in the contract:

(1) a requirement that severance pay may not exceed an amount greater than 20 weeks of compensation; and

(2) a prohibition on payment of severance pay if the individual has been fired for misconduct by the unit of government.

Misconduct is defined in the new law to include, among other things, the following:

• conduct that is a deliberate violation or disregard of reasonable standards of behavior of an employee
• intentional and substantial disregard of the employer's interests or the employee's duties
• chronic absenteeism or tardiness in deliberate violation of known policy after a reprimand
• willful and deliberate violation of a state standard or regulation
• violation of the employer's rules
• other conduct, including criminal assault or battery on an employee, customer, invitee or abuse or neglect of someone under the employee's professional care.

The Act applies to all state agencies, units of local government (i.e., counties, municipalities, townships, special districts), school districts, and other bodies created by state statute or state constitution.

The new law does not appear to apply to existing employment agreements between government bodies and employees, although a unit of government would have to comply with the new contractual requirements when renewing or renegotiating an existing employment agreement. That will certainly affect the negotiations between employers and employees in any renewal of an existing employment agreement that includes a severance pay provision in excess of 20 weeks.

The text of the new law (without definitions) is set out below:

Section 10. Severance pay.

(a) A unit of government that enters into a contract or employment agreement, or renewal or renegotiation of an existing contract or employment agreement, that contains a provision for severance pay with an officer, agent, employee, or contractor must include the following provisions in the contract:

     (1) a requirement that severance pay provided may not exceed an amount greater than 20 weeks of compensation; and

    (2) a prohibition of provision of severance pay when the officer, agent, employee, or contractor has been fired for misconduct by the unit of government.

(b) Nothing in this Section creates an entitlement to severance pay in the absence of its contractual authorization or as otherwise authorized by law.

The law takes effective January 1, 2019.

Post Authored by Julie Tappendorf