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2005 Legislative Update

Although 2005 was a busy year for the Illinois legislature, fewer significant statutes were enacted when compared to the recent past. Nonetheless, there were a number of new laws enacted in 2005 that may apply to your business. Unfortunately, many of these laws have received little or no publicity. Ignorance, however, is not an acceptable excuse for failing to comply with the new laws.

Privacy. The Illinois legislature was particularly active in the area of privacy. The Personal Information Protection Act, effective January 1, 2006, affects anyone that collects personal information about others but fails to adequately protect that information. Many businesses collect information about customers such as driver’s license, social security and credit card numbers. However, if a security breach occurs, the business must notify all affected customers of that fact. The notice provisions are too complicated to describe here. Failure to follow the statute may result in severe penalties and also constitutes a violation of the Consumer Fraud and Deceptive Practices Act – something everyone should seek to avoid.

Also, anyone extending credit or utility services should know that the Consumer Fraud and Deceptive Practices Act has been amended to provide that it is illegal to deny such services to a victim of identity theft. To be entitled to the statute’s protection, the victim must file certain reports as required by the FTC.

Finally, victims of identity theft may now require credit reporting agencies to place a “freeze” on their credit reports. The hope is that the identity thief will be prevented from establishing fraudulent credit if access to the victim’s credit report is denied. This statute is effective January 1, 2006.

Construction. For those who think that the life of an Illinois legislator is not exciting, they must only look toward the Construction Site Temporary Restroom Facility Act. This act requires temporary restrooms at all construction sites and actually sets out the parameters for how many must be provided and how close they must be to the construction site.

On a more serious note, the Mechanics Lien Act has had it first systematic revision since its creation in 1903. Effective January 1, 2006, the new provisions make few substantive changes, and instead are aimed at making the statute more “user friendly.” Of concern to those in the construction industry are revisions concerning allegations that must be contained in a lien claim. Nonetheless, because one intent behind the statute was to include case law authority that has developed in this area, those who depend on liens for payment will want to carefully review the statute to make sure that their current procedures will be in compliance. Consult your attorney and/or the new statute: http://www.ilga.gov/legislation/publicacts/94/094-0627.htm.

Employment. Obviously in response to our military presence in Iraq and elsewhere, the legislature passed two significant statutes aimed at making things easier for our military personnel. First, members of the Illinois National Guard called to active military duty must be given post-service preference if they received any employment offer prior to being called to service. The law does not require that the offer be held open. If that job is no longer open upon the service member’s return, then s/he is entitled to preference for an additional year in the event that the job again becomes open.

The Family Military Leave Act, effective August 2005, dictates that employers must allow the spouse or parent of active duty military personnel to take unpaid leave without loss of job or benefits. Employers with between 15 and 50 employees must provide up to 15 days of leave, while employers with more than 50 employees must provide up to 30 days of such leave. Employees are required to give 14 days notice to the employer if more than five consecutive days of leave will be used. The leave can only be used if the employee has already exhausted all available vacation, personal and compensatory (but not sick) leave.

Retail. Continuing the legislature’s fascination with bathrooms, 2005 also marked the passage of Restroom Access Act. This act requires retail establishments to make available otherwise private restroom facilities to customers with eligible medical conditions (such as Crohn’s disease or irritable bowel syndrome). Gas stations with less than 800 square feet are exempt, and the business must have at least three employees on duty before it can be required to open up its restrooms. Violations of the statute can result in fines of up to $100 per incident.

Estate Tax. Although not truly a new law, the federal and Illinois estate tax exemption amounts increased to $2,000,000.00 effective January 1, 2006. Although the federal exemption increases in the future, the Illinois exemption is capped at this amount. In other words, now is the time to revisit your estate plan in the event this increase effects you.

by Thomas C. Pavlik, Jr
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