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In this article we will explain the vicarious liability of an employer for the actions of an employee in Illinois. We will discuss both the doctrines of respondeat superior and negligent hiring.
According to the Illinois Personnel Records Review Act (820 ILCS 40), employees have a right to request a review of their personnel records twice a year during their employment and for up to one year after their employment is terminated.
In Illinois, when an employee is terminated, the employer is required to make full payment of all amounts due to the employee at the next scheduled payroll. This may include compensation for unused vacation days, but typically does not include compensation for unused sick days or holidays (unless otherwise contracted).
When hiring an employee or independent contractor, you should make sure that your business interests are protected in the Employment Contract or Independent Contractor Agreement. This can be done with Non-Compete, Non-Solicitation, Trade Secret, and Non-Disparagement Clauses:
In LLCs vs. S-Corps: Selecting a Corporate Form for Your Business we discussed how incorporation of your business can protect you from personal liability for business debts. This week we will discuss another liability shield: the characterization of your workers as independent contractors rather than employees.
As an employer, you are liable for your employees’ acts that are committed while acting within the scope of their employment. However, you are not liable for the negligent or intentional acts of independent contractors that you have hired.
Let’s say that Lexcorp, Inc. hires General Zod to drive a shipment of kryptonite from Gotham to Metropolis on Superman’s birthday. En route General Zod hits the bicycling Jimmy Olsen with his truck.
In Employees And Independent Contractors, Part I: Using Contractors To Avoid Liability, we learned how your business can use independent contractors to shield itself from liability. Once you have consulted with your attorney and determined how to structure your relationship to your independent contractor you should then work with your attorney to draft an independent contractor agreement is appropriate to your situation.
The two purposes of this type of agreement are: (1) to ensure that the relationship between your business and the person or entity that you are hiring will be treated as an independent contractor relationship rather than employer/employee by the courts; and (2) to put you in a favorable legal position with respect to any disputes that may occur between your business and the contractor.