Illinois lawmakers consider bill to make general contractors responsible for other’s unpaid wages (IL)

Posted by National Alliance for Fair Contracting on

By Cole Lauterbach
The Center Square | Jul 19, 2019

Illinois lawmakers are considering sending Gov. J.B. Pritzker legislation that would put general contractors on the hook for any wages a subcontractor failed to pay workers.

The House passed the legislation this spring. Should Pritzker sign the bill into law, any general contractor who hires a subcontractor that doesn’t properly pay employees could be sued for those wages.

Sponsoring Senator Laura Fine, D-Glenview, said wage theft has become common

“Wage theft could range anything to not paying workers for hours they work to not paying the legal minimum wage,” she said.

Fine said she wanted to get as much feedback from opponents as possible, signaling that she may amend the bill.

Bill Ward of the Homebuilders Association of Illinois said no one supports wage theft, but the bill, as it’s written, would increase costs for companies due to the increased risk of getting sued.

“This bill says an innocent person who has paid the subcontractor in whole, the general contractor, can be gone after,” he said.

Fine said the bill would allow general contractors to be exempt from the law if they get verification from the subcontractor that they’ve paid all of their people, but Republicans in the House said that would be a significant burden for a general contractor to undertake.

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Are General Contractors Liable For Their Subcontractors’ Actions Or Inactions?

Posted by National Alliance for Fair Contracting on

JD Supra
June 26, 2019

A general contractor in Southern California found itself on the hook for its subcontractor’s failure to pay wages to its workers, even though the general contractor had no knowledge of it. The case illustrates an important reminder for general contractors. The general contractor was fined close to $600,000 under a 2017 California law, A.B. 1701, which holds general contractors liable for their subcontractor’s failure to pay wages owed to workers.

Holding a general contractor responsible is not new or limited to state law. Under most federal employment laws, a general contractor could be found to be a joint employer with its subcontractor, or a temporary staffing agency, when certain conditions are met. In determining if the general contractor is jointly employing workers with its subcontractors, courts will look at the level of control exercised by the general contractor over these workers, as well as intermingling of operations, common ownership, supervision of work, pooling of employees, sharing of clients or customers, and agreements between the companies.

Unexpected and significant consequences for a general contractor may result from its subcontractor’s noncompliance with the law. For example, under the Fair Labor Standards Act, a general contractor found to be a joint employer could be liable for a subcontractor’s failing to pay wages or overtime and misclassifying a worker as exempt or as an independent contractor, among other things.

In addition, more and more courts are looking at whether general contractors should be held accountable for a subcontractor’s alleged harassing or discriminatory conduct under Title VII of the Civil Rights Act.

State and federal agencies and workers may go after a general contractor for joint-employment liability when the subcontractor cannot cover the liability on its own or it is no longer operating, and the general contractor has deeper pockets.

Accordingly, to reduce risk, general contractors should consider carefully who they choose to do business with and take steps to ensure that their business partners are compliant with federal and state laws.

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Illinois lawmakers move to make general contractors responsible for lost wages of others on the job. (IL)

Posted by National Alliance for Fair Contracting on

By Cole Lauterbach
Illinois News Network
Mar 21, 2019

General contractors in Illinois may be on the hook for the wages of their subcontractors’ unpaid employees if state lawmakers successfully pass a law requiring just that.

Under state Rep. Jennifer Gong-Gershowitz’ legislation, a contractor who hires others to do a job could be forced by the Illinois Department of Labor to be responsible for unpaid wages to workers that the subcontractor failed to pay.

“House Bill 2838 provides for primary contractor responsibility for wage and benefit theft in the construction industry to stop worker exploitation and bring tax dollars back to the state currently being lost by lawbreakers,” she said.

Rep. Tom Weber, a contractor himself, said the change would put builders on the hook for other businesses’ actions.

“As a contractor who hired someone and paid them to do a job and then when they don’t pay their employees, how on Earth is that my responsibility?” he asked.

Kevin O’Gorman with the Chicago Regional Council of Carpenters told Weber that the new law would make him more careful about who he does business with.

“It would be a good thing for your portion of the industry to make sure that the people are getting paid,” he said. “We’re trying to get you to be reasonable and hire qualified and responsible contractors.”

The bill now awaits a vote on the House floor.

The state of California has a similar law. General contractors there have been sued by the state and forced to pay sizable settlements on behalf of contractors they pay to do jobs.

(See Article)