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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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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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Illinois House Testimonies on the Consequences of Repealing Prevailing Wage

Posted by National Alliance for Fair Contracting on

MARCH 1, 2018
PUBLISHED BY – Frank Manzo IV

On Tuesday, February 27, the Labor and Commerce Committee in the Illinois House held a hearing titled “Impacts of Repealing the Prevailing Wage.” Frank Manzo IV, MPP, Policy Director of the Illinois Economic Policy Institute (ILEPI); Robert Bruno, Ph.D., Director of the Project for Middle Class Renewal at the University of Illinois; and Kevin Duncan, Ph.D., Professor of Economics at Colorado State University-Pueblo submitted testimonies.

Good afternoon, Mr. Chairman and Members of the Committee. My name is Frank Manzo IV. I am the Policy Director of the Illinois Economic Policy Institute, a nonprofit research organization that provides candid and dynamic analyses on major subjects affecting the economies of Illinois and the Midwest- specializing in the construction industry.

Economic research finds that repeal of state prevailing wage laws decreases construction worker incomes and reduces apprenticeship training. For example, a peer-reviewed study published within the past week found that blue-collar construction income and benefits fell by between 4 and 11 percent in states that repealed their prevailing wage laws since the 1970s. Another analysis of nine states that repealed their prevailing wage laws since the 1970s found that repeal was associated with a 40 percent decrease in training.

Workers are better trained in states with prevailing wage, so they complete public projects more efficiently. The preponderance of economic research finds that prevailing wage does not affect construction costs. Since 2000, there have been 11 peer-reviewed studies that used regression analysis to examine the effect of prevailing wage on school construction costs. Ten of these studies, or 91 percent, find no statistical impact on the cost of school projects. Repealing prevailing wage does not reduce costs for taxpayers.

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My name is Robert Bruno and I am a Professor of Labor and Employment Relations in the School of Labor and Employment Relations at the University of Illinois. I also serve as Director of the Labor Education Program and Director of the Project for Middle Class Renewal.

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The Illinois Prevailing Wage Act levels the playing field for all contractors by ensuring that state and local expenditures maintain and reflect local area standards for wages and benefits.

Prevailing wage is a partial solution to a problem caused by the low-bid model: contractors aiming to lower their bids through cutthroat reductions in wages, benefits, and apprenticeship training. By taking labor costs out of the equation, prevailing wage incentivizes construction contractors to compete on the basis of efficiency and core competencies, rather than on undermining middle-class compensation standards.

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Elwood calls on CenterPoint to prove it’s complying with prevailing wage laws

Posted by National Alliance for Fair Contracting on

ELWOOD, Ill., Aug. 29, 2013 /PRNewswire/ — The Village of Elwood has asked a judge to require CenterPoint Properties to provide documentation to determine if the developer is in compliance with state law in paying workers a prevailing wage.

Although state law and the Tax Incremental Finance (TIF) agreement between the Village and CenterPoint require that it pay prevailing wages, CenterPoint has refused to reveal any payroll documents that would confirm that workers are receiving prevailing wages at its Deer Run Industrial Park development, which is the focus of a TIF.

Today’s court filing is the most recent  development in an ongoing dispute, which prompted the Village to take legal action earlier this year after CenterPoint failed to provide information on how it spent $110 million in Village taxpayer dollars for the redevelopment of the 1,820-acre site at the former Joliet Arsenal.

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