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Understanding the Illinois Prevailing Wage Act Part II: Notice, Posting, and Reporting Requirements

April 2014

By: Ryan L. Young, Esq.

This is Part II of a four-part series about the Illinois Prevailing Wage Act. Last month we addressed two Illinois Prevailing Wage Act issues: coverage under the Act and determining the appropriate prevailing wage rate. While the main requirement under the Prevailing Wage Act is the payment of the prevailing wage for all work performed on a public works project, the Act contains other important requirements that employers must follow. These additional requirements are the subject of this article.

Providing Notice of the Employer's Obligation to Pay the Prevailing Wage Rate

The notice requirement is an obligation under the Act that affects everyone involved in a public works project: public bodies, general contractors, and subcontractors. The Act requires the public body, any contractor, and any subcontractor (that in turn subcontracts to another company) to provide written notice that not less than the prevailing rate of wages shall be paid to all laborers, workers, and mechanics performing work on the project. This means that general contractors must provide the written notice to all of their subcontractors performing work on a public works project. All subcontractors that subcontract work to other subcontracts must provide the written notice as well. This written noticed should be included in any project specifications, contract, and/or subcontractor agreement. If none of these documents apply, then at an absolute minimum, the contract and/or subcontractor should receive written notice via letter.

As we will discuss next month, failure to provide the written notice could result in liability for penalties an employer that did not receive notice incurs for failing to pay the prevailing wage rate.

Posting the Prevailing Wage Rates

The Act requires a contractor (i.e. general contractor) or construction manager that is awarded a public works contract to post the prevailing wage rates for each craft or type of worker or mechanic needed to perform the work in an easily accessible location on the project site. Alternatively, the contractor or construction manager may post the rates in a business location (if the workers regularly visit that location) or simply provide each worker engaged on the project a written notice (indicating the prevailing wage rates for the project).

Reporting Payment of the Prevailing Wage Rate to the Public Body

The Act also requires any contractor and each subcontractor that participates in the public works project to prepare, submit, and keep certified payroll records (for all employees employed on the project). These certified payroll records consist of certified transcripts of payroll that the employer must fill out with information related to the project (e.g. the employer's name/contact information, the public body's name/contact information, the payroll date, the contract/project numbers, the project location, and for each worker, the worker's name, contact information, prevailing wage classification, hours worked each day, rate of pay, etc.). Aside from filing these records with the public body in charge of the project on a monthly basis, the certified payroll records must be kept for a period of 3 years (and will be specifically requested by the Department if it decides to engage in an investigation of the project).

Most employers understand that the Prevailing Wage Act requires the payment of the prevailing wage rate for work performed on a public works project but many employers overlook these additional requirements. It is important that employers understand that the failure to meet each of the requirements is a separate violation of the Act. That said, your knowledge of these addition requirements will give you the power to ensure that you are in total compliance.

Stay tuned, as next month we will cover the penalty provisions of the Prevailing Wage Act.

If you have any questions or concerns about this topic, please call Ryan Young of Wessels Sherman's Chicago, Illinois office at (312) 629-9300 or via email at [email protected].