AUTHOR – Kim Slowey
PUBLISHED – April 2, 2019
Dive Brief:
- The Illinois House of Representatives this month passed an amendment to the state’s Wage Payment and Collection Act that could make general contractors responsible for the wages of their subcontractors’ employees. The state Senate will now take up the bill.
- The liability for a subcontractor’s unpaid wages would lie with the direct contractor – the company in contract with the owner – even if the direct contractor has paid the subcontractor in full.
- The law as proposed would also apply to lower-tier subcontractors and cover fringe and benefit payments owed to third parties on behalf of employees. Just as in most other civil actions, the direct contractor’s property could be seized in order to raise the money necessary to pay back wages and benefits.
Dive Insight:
In addition to wages and benefits, the direct contractor would be responsible for interest on those payments, but not fines and penalties. The proposed regulation would give direct contractors the right to examine the records of subcontractors and lower-tier subcontractors in the course of the project to ensure that they are paying their employees.
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Such legislation can give state officials extra teeth in pursuing payment for those workers left in the lurch by unscrupulous contractors. In California, where GC’s liability for subs’ unpaid wages was enacted for contracts signed on or after Jan. 1, 2018, officials have been aggressive in addressing wage theft violations.