{"id":2838,"date":"2026-03-26T12:05:16","date_gmt":"2026-03-26T16:05:16","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=2838"},"modified":"2026-03-26T12:28:38","modified_gmt":"2026-03-26T16:28:38","slug":"illinois-appellate-court-affirms-corporate-officers-who-did-not-knowingly-permit-iwpca-underpayment-violations-are-not-employers","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2026\/03\/26\/illinois-appellate-court-affirms-corporate-officers-who-did-not-knowingly-permit-iwpca-underpayment-violations-are-not-employers\/","title":{"rendered":"Illinois Appellate Court Affirms Corporate Officers Who Did Not Knowingly Permit IWPCA Underpayment Violations Are Not Employers"},"content":{"rendered":"
\n
\"\"<\/a><\/figure>\n<\/div>\n\n\n

By Gerald L. Maatman, Jr., Gregory Tsonis, and George J. Schaller<\/strong><\/p>\n\n\n\n

Duane Morris Takeaways<\/em>: <\/strong>On March 17, 2026, in People ex. rel. Ill. DOL v. Quality Therapy & Consultation, Inc., et al., 2026 Ill. App. Unpub. LEXIS 594 (1st Dist. 2026),<\/em> the Illinois Appellate Court affirmed<\/a> the circuit court\u2019s decision finding corporate officers were not \u201cemployers\u201d as defined in section 2 of the Illinois Wage Payment And Collection Act (\u201cIWPCA\u201d), the corporate officers had not knowingly permitted underpayments, and accordingly, the corporate officers were not liable under Section 13 of the IWPCA.\u00a0 Justice Margaret S. McBride authored the opinion on behalf of the Appellate Court.<\/em><\/p>\n\n\n\n

The decision in Quality Therapy protects corporate decision-makers from personal and strict liability where those decision-makers do not \u201cknowingly permit\u201d a corporation, or such an employer, to violate provisions of the IWPCA. <\/em><\/p>\n\n\n\n

Case Background<\/strong><\/p>\n\n\n\n

In 1996, Quality Therapy and Consultation, Inc. was founded by Frances M. Parise and John Parise (collectively \u201cthe Parises\u201d).  Quality Therapy<\/em>, 2026 Ill. App. Unpub. LEXIS 594,at *2.  Quality Therapy provided occupational therapy, speech therapy, and physical therapy services in Illinois to long-term care facilities.  Frances Parise acted as Quality Therapy\u2019s president and secretary whereas John Parise was the chief executive officer, and each owned 50% of Quality Therapy and shared authority for business decisions.  Id. <\/em>at *2-3. <\/p>\n\n\n\n

After Quality Therapy incurred substantial legal fees from a 2015 federal investigation into its Medicare billing practices and experienced a slow in payments from a primary client, the State of Illinois, Quality Therapy\u2019s profit margins shifted into the negative.  Id. <\/em>at *3-4.  In September 2017, Quality Therapy, as a result of the negative margins, could not meet its payroll obligations and issued a WARN Act notice to its employees, \u201cadvising that the business would close and all employment would cease in 60 days.\u201d  Id. <\/em>at *4. <\/p>\n\n\n\n

Thereafter Quality Therapy informed staff they would not receive their September wages and Quality Therapy was closing on September 30, 2017.  Id.  <\/em>Throughout September, the Illinois Department of Labor (the \u201cDepartment\u201d) received the first of \u201c93 wage applications from [former] employees that would eventually total $550,496, exclusive of statutory penalties.\u201d  See id.<\/em> at *5.<\/p>\n\n\n\n

Quality Therapy relied on a bank line of credit to fund payroll on a timely basis, and after the Parises notified the bank that Quality Therapy was closing, the bank immediately called the corporation\u2019s line of credit and froze all funds on hand.  Id. <\/em> Quality Therapy never regained control of its bank account and was unable to access any of its money to pay its employees.<\/p>\n\n\n\n

Circuit Court Case Background<\/strong><\/p>\n\n\n\n

In December 2019, the Department filed a three-count complaint, which was later amended in February 2020, and directed individual counts against Quality Therapy, as well as Frances and John Parise, that each knowingly permitted Quality Therapy\u2019s underpayments of unpaid wages and other compensation.  The Department maintained all three defendants met the definition of employer under the IWPCA.  Id.<\/em> at *7.<\/p>\n\n\n\n

Quality Therapy had been dissolved and was found in default.\u00a0 The Parises moved for summary judgment on the amended complaint and argued that the Illinois\u2019 Supreme Court decision in Andrews v. Kowa Printing Corp., <\/em>217 Ill. 2d 101 (2005), \u201cprecluded a corporate officer\u2019s individual liability under section 2 of the Wage Act.\u201d\u00a0 Quality Therapy<\/em>, 2026 Ill. App. Unpub. LEXIS 594, at *7-8.\u00a0 The Department responded that \u201c[the Parises] each acted directly or indirectly in [Quality Therapy\u2019s] interest, which made them \u2018employers\u2019 within the meaning of section 2.\u201d Id. <\/em>at *8\u00a0<\/p>\n\n\n\n

The circuit court denied summary judgment and then presided over a two-day bench trial focusing on Quality Therapy\u2019s ability to pay.  Id.  <\/em>The circuit court entered default judgment against Quality Therapy, but, the circuit court rejected \u201cthe Department\u2019s argument that the Parises were \u2018employers\u2019\u201d as defined in section 2 of the IWPCA, and found that \u201conly [Quality Therapy] was the wage claimants\u2019 employer under section 2.\u201d  Id. <\/em>at *8.  The circuit court also denied the claims against the Parises under section 2 and found \u201c[t]he only proper [IWPCA] claim brought under the pleadings against [the Parises] is grounded in\u201d section 13 of the IWPCA.  Id.  <\/em>The circuit court reasoned that Frances and John Parise, as corporate officers of Quality Therapy, had not knowingly permitted the underpayments and were not liable under section 13 since Quality Therapy was incapable of meeting its payroll.  Id. <\/em> <\/p>\n\n\n\n

The Department appealed on the grounds that \u201cthe circuit court erred in finding that the Parises were not employers with Section 2.\u201d\u00a0The Department acknowledged its argument on appeal ran contrary to the Illinois Supreme Court\u2019s decision in Andrews, <\/em>217 Ill. 2d 101, but the Department contended that the 2011 amendment to section 13 of the IWPCA \u201cimpliedly amended section 2 [of the IWPCA] and superseded Andrews<\/em>.\u201d Quality Therapy<\/em>, 2026 Ill. App. Unpub. LEXIS 594, at *9.<\/p>\n\n\n\n

The <\/strong>Appellate Court Decision<\/strong><\/p>\n\n\n\n

The Appellate Court affirmed the circuit court\u2019s holding that the Parises were not employers within section 2 of the IWPCA.  The Appellate Court, applying the Andrews<\/em> precedent and interpreting \u201cthe statutory language,\u201d concluded \u201cthat the amendment to section 13 had no effect whatsoever on section 2\u201d of the IWPCA.  Id. <\/em>at *11.<\/p>\n\n\n\n

The Appellate Court rejected the Department\u2019s argument that the 2011 amendment to the IWPCA blended sections 2 and 13 such that it \u201cwould render anyone<\/em> who had a decision making role in payment decisions personally liable for unpaid wages and final compensation.\u201d  Id. <\/em>at *9.  The Appellate Court explained the two sections contained distinct definitions, standards, and terms, and presumed that \u201cthe legislature did not intend, inconvenient, absurd, or unjust consequences.\u201d  Id. <\/em>at *10. <\/p>\n\n\n\n

The Department\u2019s appeal focused on the last clause of section 2 stating that \u201cany person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee\u201d is deemed an \u201cemployer\u201d for purposes of the IWPCA.  Id. <\/em>at *11 (quoting 820 ILCS \u00a7 115\/2).  The Department asserted the last clause of section 2 should be read \u201cin conjunction with section 13.\u201d <\/p>\n\n\n\n

At issue was the underlined language, added to section 13 in the 2011 amendment:<\/p>\n\n\n\n

\u201cIn addition to an individual who is deemed to be an employer pursuant to section 2 of this Act<\/span>, any officers of a corporation or agents of an employer who knowingly permit such employer to violate the provisions of this Act shall be deemed to be the employers of the employees of the corporation.\u201d\u00a0 820 ILCS \u00a7 115\/13.<\/p>\n\n\n\n

The Appellate Court disagreed that the 2011 amendment to section 13 \u201ceffectively modified section 2 and dramatically changed a corporate decision maker\u2019s potential liability for wages.\u201d  Id. <\/em>at *11-12.  The Appellate Court reasoned that the IWPCA imposes liability on \u201ctwo separate and distinct <\/em>definitions of \u2018employer\u2019\u201d because \u201c[i]f there was no distinction between the liability of the corporation and the individual officer, then there would be no reason to have two separate definitions of what constitutes an \u2018employer.\u2019\u201d  Quality Therapy<\/em>, 2026 Ill. App. Unpub. LEXIS 594at *12-13 (citing Elsener v. Brown<\/em>, 2013 IL App (2d) 1209209 \u00b6 66).<\/p>\n\n\n\n

The Appellate Court also rejected the Department\u2019s expansive interpretation of section 2 and section 13 as \u201cunpersuasive.\u201d  Id. <\/em>at *13.  Notably, the Appellate Court cited the Illinois Supreme Court\u2019s language in Andrews<\/em>, which acknowledged \u201cthe breadth of the language\u201d in section 2 was \u201cconfounding\u201d because when read literally, it would \u201cmake an \u2018employer\u2019 out of every person who possesses even a modicum of authority over another employee, from the CEO to the head of the maintenance staff, as such persons undeniably act \u2018directly or indirectly in the interest of an employer in relation to an employee.\u2019\u201d  Andrews<\/em>, 217 Ill 2d. at 107.  Accordingly, following the Illinois Supreme Court, the Appellate Court opined that \u201c[a] literal reading [of that clause] would result in absurdity or unjustness in part because of an employer\u2019s strict liability for wages.\u201d  Quality Therapy<\/em>, 2026 Ill. App. Unpub. LEXIS 594at *13. <\/p>\n\n\n\n

Various other reasons supported the Appellate Court\u2019s decision.  Andrews<\/em>, the Appellate Court noted, has been consistently applied without \u201cany court or litigant suggesting that the analysis was abrogated by the amendment to section 13 that took effect in 2011.\u201d  Id. <\/em>at *16 (collecting cases following Andrews.<\/em>)  Additionally, the Appellate Court noted that the legislature\u2019s drafted language across both relevant sections of the IWPCA were not constructed with \u201cparallel wording\u201d nor a declaration of an intent to change section 2\u2019s meaning for the phrase \u201cany person or group of persons.\u201d  Id. <\/em>at *18.  Following the Department\u2019s interpretation of the IWPCA, the Appellate Court reasoned, would upend \u201cwell-established principles of corporate law\u201d and \u201ccreate personal liability for shareholders, officers, managers, and supervisory employees, regardless of the precision with which corporate formalities are observed, and would remove the fundamental protections afforded by long-standing principles of corporate law.\u201d  Id. <\/em>at *21-22.<\/p>\n\n\n\n

Consequently, the Appellate Court found \u201cthe amendment to section 13 maintains the framework of the [IWPCA] \u2013 it did not alter the general definition set out in section 2 nor did it modify liability under section 13.\u201d  Id. <\/em>at *20. <\/p>\n\n\n\n

Finally, the Appellate Court also dismissed the Department\u2019s \u201cnew argument on appeal\u201d that it could rely on a self-adopted regulation \u201cwhich blends sections 2 and 13 based on the Department\u2019s reading of the amendment.\u201d  Id.<\/em> at *22.  The Appellate Court found the Department\u2019s interpretation was not well founded and the regulation was \u201calso flawed because it is not based on the new, clear prefatory clause in section 13.\u201d  Id. <\/em>at *26-27.<\/p>\n\n\n\n

Accordingly, the Appellate Court affirmed the circuit court\u2019s judgment.<\/p>\n\n\n\n

Implications For Employers<\/strong><\/p>\n\n\n\n

Quality Therapy <\/em>draws a line in the sand delineating when a corporate decisionmaker meets the definition of \u201cemployer\u201d under section 2 of the IWPCA.  The Appellate Court relied on longstanding Illinois Supreme Court precedent to find the 2011 amendment to section 13 of the IWPCA did not alter the scope of section 2 of the IWPCA.  <\/p>\n\n\n\n

Employer\u2019s facing claims for violations of the IWPCA must ensure they comply with the payment provisions of the IWPCA.  However, protections for corporate-decision makers remain intact, and merely being in a decision-making role with respect to payment decisions is insufficient to establish personal liability for unpaid wages and final compensation under the IWPCA. <\/p>\n\n\n\n

Instead, Quality Therapy<\/em> establishes that only those corporate decision makers who \u201cknowingly permit\u201d an employer to violate provisions of the IWPCA shall be also deemed an \u201cemployer of the employees of the corporation\u201d pursuant to section 13 of the IWPCA.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr., Gregory Tsonis, and George J. Schaller Duane Morris Takeaways: On March 17, 2026, in People ex. rel. Ill. DOL v. Quality Therapy & Consultation, Inc., et al., 2026 Ill. App. Unpub. LEXIS 594 (1st Dist. 2026), the Illinois Appellate Court affirmed the circuit court\u2019s decision finding corporate officers were not … <\/p>\n

Continue reading “Illinois Appellate Court Affirms Corporate Officers Who Did Not Knowingly Permit IWPCA Underpayment Violations Are Not Employers”<\/span><\/a><\/p>\n","protected":false},"author":575,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[42],"tags":[],"ppma_author":[7,8,96],"class_list":["post-2838","post","type-post","status-publish","format-standard","hentry","category-wage-hour-litigation"],"authors":[{"term_id":7,"user_id":575,"is_guest":0,"slug":"gmaatman","display_name":"Gerald L. Maatman, Jr.","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2022\/09\/maatmangerald-100x100.jpg","author_category":"","last_name":"Maatman Jr.","first_name":"Gerald L.","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/geraldmaatman.html","description":"Read Gerald's bio.<\/a>"},{"term_id":8,"user_id":577,"is_guest":0,"slug":"gtsonis","display_name":"Gregory Tsonis","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2022\/09\/tsonisgreg-100x100.jpg","author_category":"","last_name":"Tsonis","first_name":"Gregory","job_title":"","user_url":"","description":"Read Gregory's bio.<\/a>"},{"term_id":96,"user_id":655,"is_guest":0,"slug":"gschaller","display_name":"George Schaller","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2023\/07\/schallergeorge-100x100.jpg","author_category":"","last_name":"Schaller","first_name":"George","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/georgeschaller.html","description":"Read George's Bio<\/a>"}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/2838","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/575"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=2838"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/2838\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=2838"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=2838"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=2838"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=2838"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}