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Illinois joins lengthening list of states outlawing wage theft

Posted by National Alliance for Fair Contracting on

October 30, 2023

By an overwhelming legislative majority Illinois has joined the lengthening list of states to outlaw wage theft.

The measure, signed by Democratic Gov. J.B. Pritzker in September, shows again the importance of state-level lawmakers and governors to workers.

That can be both positive and negative. The nation is increasingly politically polarized. In “Blue States,” such as Illinois, New York, California, and, this year, Michigan and Minnesota, elected officials respond to workers’ support with worker protection legislation unlikely to make it through Capitol Hill.

But in often gerrymandered and/or racially polarized “Red States” – such as Texas and Florida and other Southern and lightly populated Great Plains states – right-wing radicals, funded by corporate special interests, enact and enforce worker suppression and voter suppression legislation, often at the same time.

Illinois’ wage theft bill, HB1122, was one of the top priorities of the state AFL-CIO. The Illinois House passed it 68 to 38 and the state Senate agreed 35 to 20. It takes effect next July 1.

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III FFC Celebrates Passage of Colona Responsible Bidder Ordinance

Posted by National Alliance for Fair Contracting on

May 31.2023

Indiana, Illinois, Iowa Foundation for Fair Contracting Celebrates Passage of Colona Responsible Bidder Ordinance

Colona passes local ordinance to promote workforce development, protect local tax dollars

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COLONA, IL – Last week, Colona City Council passed a local responsible bidder ordinance (RBO) in a 9-0 vote with Colona Mayor Donald Ropp casting the final vote.

A responsible bidder ordinance (RBO) is a resolution adopted into a public body’s procurement codes that specifies certain criteria that a contractor must meet in order to be eligible to perform work on behalf of that community. Ultimately, an RBO ensures that public projects are awarded to responsive and responsible contractors who employ skilled tradespeople, deliver the highest quality of work, and provide more taxpayer value than contractors who cut corners in the areas of training, labor, and safety.

“This is a big win for the entire Colona community,” said Indiana, Illinois, Iowa Foundation for Fair Contracting (III FFC) Regional Manager Andy Waeyaert. “Passing a Responsible Bidder Ordinance protects taxpayer dollars while spurring local economic growth and supporting good-paying jobs. Plus, the apprenticeship requirements in this RBO help create a highly trained workforce ready to partner with local businesses to meet the construction needs now and in the future. On behalf of the III FFC, we celebrate the passage of another RBO and thank Colona City Council and Mayor Ropp for their support in raising standards in the local construction industry.”

The Colona ordinance includes “5-for-5” apprenticeship language to encourage workforce development by requiring proof that contractors and subcontractors bidding on Colona public works projects are participating in US Department of Labor-approved apprenticeship training programs that have graduated at least five (5) apprentices in each of the past five (5) years for each of the construction crafts to be performed on the project.

III FFC was established to increase market share for responsible contractors, work opportunities for skilled craftsmen and craftswomen, and value for taxpayers. III FFC raises standards in the construction industry by advocating for responsible public policies that reward work, ensure business growth, and create broad-based prosperity. You can find out more about responsible bidder ordinances and the III FFC on our website at www.iiiffc.org.

FOR IMMEDIATE RELEASE: May 31, 2023

CONTACT: Jill Gigstad, III FFC, (815) 254-3332 EXT 6, jgigstad@iiiffc.org

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Illinois accuses Bridgeview construction company of stealing wages from union carpenters

Posted by National Alliance for Fair Contracting on

Chicago Sun Times – By Mitch Dudek Sept 2, 2022

Drive Construction allegedly funneled payments to carpenters through sham subcontractors to pay less than what the state’s overtime and prevailing wage laws require

A Bridgeview-based construction company is accused of wage theft and using an elaborate scheme to underpay dozens of union carpenters, according to a lawsuit filed by Illinois Attorney General Kwame Raoul’s office.

Between 2015 and 2020, Drive Construction Inc. obtained contracts for public works projects in the Chicago area, such as schools and public housing apartments, worth nearly $40 million, according to the lawsuit. The contracts required Drive to pay its carpenters, who are represented by the Mid-America Carpenters Regional Council, Illinois-mandated prevailing wages.

But Drive funneled payments to carpenters through sham subcontractors to pay the carpenters less than what the state’s overtime and prevailing wage laws require and to dodge the cost of other legally required benefits and protections, according to the lawsuit filed Thursday in Cook County Circuit Court.

“Drive passed money through two layers of sham subcontractors before using its construction foremen to distribute those payments to workers on Drive’s projects as a flat, per-week payment,” the suit alleges. “This multitiered funneling of wage payments enabled Drive to make it look like the workers were not Drive’s employees — when, in fact and by law, they were.”

Payments were typically made in cash or by money order to avoid traceability and did not reflect the overtime and prevailing wage rates that they should have, according to the suit.

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Attorney General Raoul Sues Construction Company over Complex Scheme to Avoid Paying Fair Wages and Taxes

Posted by National Alliance for Fair Contracting on

Office of the Attorney General – State of Illinois
Sept. 2, 2022

Raoul Also Issues 2022 Labor Day Report Highlighting Actions to Protect Illinois Workers

Chicago — Heading into the Labor Day holiday, Attorney General Kwame Raoul yesterday filed a lawsuit against a Bridgeview, Illinois-based construction company over an elaborate scheme to keep its employees off payroll and avoid paying tax withholdings required by law. The Attorney General’s office filed the lawsuit against Drive Construction Inc., its principal officers, and a complex web of entities and individuals for a years-long conspiracy to pay millions of dollars of wages in cash, and skirt laws intended to protect Illinois workers and ensure fair wages.

Drive Construction (Drive), which specializes in carpentry, plumbing and masonry, obtains public works projects worth several millions of dollars each year. Raoul’s lawsuit alleges Drive misclassified workers to avoid paying employees fair rates of pay for the hours they worked and to skirt its obligations to pay unemployment insurance contributions to the Illinois Department of Employment Security. Raoul alleges Drive violated Illinois’ Minimum Wage Law, the Illinois Prevailing Wage Act and the Illinois Employee Classification Act.

“Misclassifying employees as independent contractors deprives workers of their right to be paid fairly and to be covered by workers compensation insurance in the event of workplace injuries,” Raoul said. “Employers that gain a competitive advantage by paying workers off the books and in violation of Illinois law create an uneven and unfair playing field for law-abiding businesses. I am committed to holding businesses – large and small – accountable for violating laws that safeguard workers and support law-abiding businesses in Illinois.”

Raoul’s lawsuit follows an investigation based on information provided by the Mid-America Carpenters Regional Council, which has a collective bargaining agreement with Drive.

“The Mid-America Carpenters Regional Council worked closely with Attorney General Raoul’s office to shed light on this prime example of wage theft perpetrated against exploited workers,” said Gary Perinar, Executive Secretary-Treasurer of the Mid-America Carpenters Regional Council. “The Carpenters Union aggressively pursues wage theft cases because they hurt working families, they hurt Illinois taxpayers, and they hurt our signatory contractors who play by the rules and are at a major disadvantage against unscrupulous contractors who lowball bids by cheating the system. Earlier this year we were proud to introduce wage theft legislation that was signed into law which now holds cheating contractors accountable. We will continue our fight for working families across Illinois.”

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Illinois’ solar industry is looking to train a new generation of clean-energy workers

Posted by National Alliance for Fair Contracting on

By Jenny Whidden | Daily Herald – June 23, 2022

With Illinois looking ahead to its goal of 100% renewable energy by 2050, organizations are working to secure a workforce that is ready to install and maintain clean energy infrastructure, including solar arrays.

The passage of the Climate and Equitable Jobs Act last fall essentially pushed up Illinois’ previous goal of 25% renewable energy by 2025, setting a more ambitious target of 40% by 2030. With the state generating just 11% renewable electricity as of 2020, according to the U.S. Energy Information Administration, stakeholders say they are preparing to train a new generation of energy workers to respond to the lofty legislation.

“Given the significant amount of clean energy opportunities in the state, we certainly are going to need an expanded workforce,” said Lesley McCain, executive director of the Illinois Solar Energy Association. “The solar industry is open for business. We are hiring.”

Solar energy most recently accounted for 0.93% of the state’s electricity, creating about 5,200 jobs, according to the Solar Energies Industries Association.

One organization that is looking to ramp up workforce training in the solar space is the Mid-America Carpenters Regional Council, the state’s largest carpenters union.

The union’s four-year apprentice program provides solar panel installation training to its apprentices and collaborates with contractors to build solar projects throughout the state.

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Illinois Joins Trend Making General Contractors Liable for Paying Subcontractors’ Workers

Posted by National Alliance for Fair Contracting on

June 14, 2022
JD Supra

On June 10, 2022, Governor J.B. Pritzker signed into law two related bills, HB 5412 and HB 4600, sent to him the previous month by the Illinois legislature that will hold a primary contractor (one who has a contract with an owner) liable for the unpaid wages and other amounts owed to employees of subcontractors, of any tier, on Illinois private construction projects. The bills, enacted as, Public Acts 102-1076, and 102-1065 (the “Acts”), will supplement the existing remedies in the Illinois Wage Payment and Collection Act (“WPCA”) for contracts made on or after July 1, 2022. Primary contractors already have liability for employee wages owed by their subcontractors on public projects covered by the Federal Davis Bacon Act, and the same responsibility is owed under the prevailing wage acts of many states, including Illinois. Primary contractors may also have liability for subcontractors’ wages on private projects pursuant to some states’ mechanics lien acts (including Illinois), as well as obligations contained in union collective bargaining agreements to which a primary contractor may be signatory. However, these amendments to the WPCA represent a significant departure from the well-established legal concept known as privity of contract, which provides that a contractor, with few noted exceptions, is not liable for obligations (including debts to workers) of its independent contractors, such as subcontractors on construction projects. This law will impose far-reaching and unpredictable liability for primary contractors in Illinois and, as a result, some construction industry experts foresee fundamental changes in the role of subcontractors on Illinois private construction projects. This article will discuss the new law as well as important exceptions within it. …

The enactments would expand a primary contractor’s liability to include debts due a subcontractor’s employee for “unpaid wages or fringe or other benefit payments or contributions, including interest owed, penalties assessed by the Department, and reasonable attorneys’ fees, but shall not extend to liquidated damages.” HB 5412, § 13.5 (c). Actions against a primary contractor may be brought by the unpaid wage earner or others on behalf of the wage earner, including the Illinois Department of Labor, which has the authority to impose civil penalties and seek criminal sanctions against liable parties for failure to pay compensation to employees. Under the WPCA, a liable party must pay, in addition to other amounts, attorneys’ fees incurred by the employee, interest, and an additional sixty percent (60%) per year for as long as the debt is unpaid. If a court interprets the 60% per year imposed by Section 14 of the WPCA to be liquidated damages, then a primary contractor would not be liable for that amount because liquidated damages are exempted. Further, though the liability imposed on a primary contractor under the new law includes “penalties assessed by the Department” of Labor, it does not expressly authorize criminal sanctions, which may be imposed under the WPCA against recalcitrant direct employers found guilty of not paying a wage earner.

The intent of some other provisions likewise is uncertain. For example, Section 13.5 (b) of HB 5412 includes this language: “A property owner who acts as a primary contractor related to the erection, construction, alteration, or repair of his or her primary residence shall be exempt from liability under this Section.” Since a primary contractor is defined as a party who has a contract with a property owner, it is difficult to imagine what was intended by the foregoing exemption, especially because the amendments impose no liability on owners. Also, it is unclear whether the following is intended to impose liability on the first-tier subcontractor, or on the subcontractor who fails to pay its employee, which could be a lower-tier subcontractor. Section 13.5 (d) of HB 5412 provides, in part:

Except as otherwise provided in a contract between the primary contractor and the subcontractor, the subcontractor shall indemnify the primary contractor for any wages, fringe or other benefit payments or contributions, damages, interest, penalties, or attorney’s fees owed as a result of the subcontractor’s failure to pay wages or fringe or other benefit payments or contributions as provided in this Section, unless the subcontractor’s failure to pay was due to the primary contractor’s failure to pay moneys due to the subcontractor in accordance with the terms of their contractual relationship.

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Illinois lawmakers pass a bill they believe will help stop wage theft

Posted by National Alliance for Fair Contracting on

By Andrew Hensel – Illinois Radio Network
April 9, 2022

Illinois lawmakers have passed a measure supporters say will help combat wage theft amongst constructions workers.

House Bill 5412 was introduced by state Sen. Cristina Castro, D-Elgin. She said the measure would help workers collect wages from subcontractors that have not been able to pay.

If a subcontractor fails to pay an employee, HB5412 states that an employee can file a legal claim with the general contractor for any unpaid wages and benefits.

The bill was met with heavy debate on the last day of the legislative session.

“I think there was a lot of confusion from the opponents on what a current law did or did not do compared to this,” Castro said. “All this does is add another avenue for someone to seek to be reimbursed for lost wages.”

Castro went on to say that this bill ensures workers’ wages are paid.

“This measure will ensure that the hardworking individuals who are employed by subcontractors receive fair compensation should that subcontractor fail to pay them,” Castro said.

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Prevailing Wage Database Allows Public to Monitor Wages Paid on Projects

Posted by National Alliance for Fair Contracting on

Mattoon, IL, USA / MyRadioLink.com
Dec 7, 2021

SPRINGFIELD – Beginning January 1, 2022, the Illinois Department of Labor (IDOL) will be responsible for maintaining a database that allows the public to search certified payrolls submitted by construction contractors on public works projects subject to the Illinois Prevailing Wage Act. This is the result of Public Act 102-0332 that was passed by the General Assembly and signed by Governor Pritzker.

“This is a step toward transparency in public spending that will help keep employers accountable,” said Illinois Department of Labor Director Michael Kleinik. “It will also allow public bodies to monitor the wages paid on projects they initiate.”

In 2020, IDOL began accepting certified payroll submissions from construction contractors on public works projects subject to the Illinois Prevailing Wage Act. Contractors are required to file those certified payrolls by the 15th of each month. This is done to ensure contractors are complying with the Illinois Prevailing Wage Act.

By the 16th day of each month following the month work was performed, IDOL will make relevant information available to the public.

That information includes each worker’s classification, skill level (such as apprentice or journeyman), gross wages paid in each pay period, number of hours worked each day, start and end times of work each day, hourly wage rate, hourly overtime wage rate, and hourly fringe benefit rate.

The database shall be searchable by contractor name, project name, county in which the work was performed and contracting public body.

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IDOL Reminds Local Governments They No Longer Need to Approve Prevailing Wage Ordinances (IL)

Posted by National Alliance for Fair Contracting on

Published May 11, 2020

SPRINGFIELD – The Illinois Department of Labor (IDOL) wants to remind local units of governments that while they still must pay prevailing wages for public works projects, a 2019 change in the law means they no longer need to adopt a prevailing wage ordinance or file it with IDOL.

“While most local governments are aware of the change, some continue to adopt prevailing wage ordinances and attempt to file them with the Illinois Department of Labor. That is no longer a requirement,” said IDOL Director Michael Kleinik.

The enactment of Public Act 100-1177, which took effect June 1, 2019, relieves local units of government from the former requirement of passing a prevailing wage ordinance, publishing it and filing it with the Illinois Department of Labor.

The prevailing wage schedules for each county in the state are now ascertained by IDOL and published on its website.

The changes to the Prevailing Wage Act also required IDOL to create an electronic database of certified payrolls where contractors will submit certified payrolls directly online rather than filing them with the local government.

Here is a link to the current prevailing wage rates for Illinois counties: https://www2.illinois.gov/idol/Laws-Rules/CONMED/Pages/Rates/2020/March-Rates.aspx

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Civil procedure – jurisdiction (IL)

Posted by National Alliance for Fair Contracting on

Where an employee is hired to perform labor for public works covered by the Prevailing Wage Act, they retain the right of action from the act even if their contract does not contain the provision guaranteeing them prevailing wage in contravention of the act.

Posted May 7, 2020 9:54 AM

The 1st District Appellate Court reversed and remanded the decision of Cook County Circuit Judge Margaret Ann Brennan.

The plaintiffs in this case are 12 landscape laborers employed by Moore Landscapes LLC (Moore) as tree planters. Moore had three contracts with the Chicago Parks District for landscaping and related work, each of which contained a standard “prevailing wage rates provision” which mandates that the contractor pay all their employees prevailing wages “if applicable.” It is not disputed that $41.20 is the prevailing wage for landscape related work and the plaintiffs were paid an hourly rate of $18 for their labor. Section 11 of the Prevailing Wage Act (Act) requires all public works to pay the prevailing wage for the labor, and provides a right of action for any laborer who was paid less than the prevailing wage for a contractor doing public works.

The plaintiffs filed suit against Moore in September 2018 seeking unpaid wages, punitive damages, prejudgment interest and reasonable attorney fees and costs. Moore moved to dismiss, arguing their work was exempt from the prevailing wage provisions of the act and citing interpretations by the Illinois Department of Labor. Moore also moved to dismiss under fail to allege facts sufficient to support a claim, asserting the laborers failed to allege facts that supported the inference that the type of labor they performed was covered by the Wage Act. The trial court granted the motion to dismiss. The plaintiffs appealed.

On appeal, Moore argued that, for section 11 of the act to apply, the contract with the laborers must specify that they would be paid prevailing wages, and their contracts had no such provision. The plaintiffs argued that section 11 of the act also mandated that Moore include such a provision, which Moore did not deny, but instead claimed that because there was no contractual stipulation, the plaintiffs had no right of action and must rely on the Department of Labor to enforce any provisions of the act on their behalf. The plaintiffs claimed that the trial court’s interpretation rewards those who issue contracts which violate the act by protecting them from the right of action the act guarantees their employees.

The appellate court agreed with the plaintiffs. The court found that an employer’s failure to adhere to section 4 of the act, which mandates that the contracts include the provision at issue, does not in any way limit an employee’s right of action granted under section 11 of the act for any work where they should have been covered under the act. The appellate court emphasized that to do otherwise would allow employers to avoid liability by failing to adhere to the mandates of the act. The appellate court acknowledged that there is an issue as to whether the labor performed by the plaintiffs was covered under the act, but found that this was a material question of fact suitable for an evidentiary hearing. For that reason, dismissal was inappropriate.

The appellate court therefore reversed and remanded the decision of the circuit court.

Samuel Valerio, et al. v. Moore Landscapes LLC
2020 IL App (1st) 190185
Writing for the court: Justice Bertina E. Lampkin
Concurring: Justices Robert E. Gordon and Eileen O’Neill Burke
Released: March 26, 2020

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