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Warning to Illinois Companies About Illinois Classification Act: New Danger!

August 2009

By: Nancy E. Joerg, Esq.

Shareholder and Senior Attorney

All Illinois companies who are in construction-related industries should be fully aware of the strict legal requirements of the Illinois Employee Classification Act, a brutal law (pushed through by several Unions) which went into effect on January 1, 2008. This terribly punishing law applies to a wide range of Illinois construction-related businesses (some trucking companies, building trades, landscaping, decorating, flooring, etc.).

The law requires covered companies to post special notices in English, Spanish, and Polish and keep specific records. The main thrust of the law is to hammer (severely!) those construction-related companies who "misclassify" independent contractors. Our law firm is currently representing clients who have been hit with assessments from the Illinois Department of Labor (IDOL), some in excess of $200,000.00!!! We are, of course, assisting our clients in fighting back.

Any Illinois businesses who are construction-related should seek immediate legal counsel. Even a small amount of legal assistance can be tremendously helpful should these businesses ever be targeted by the IDOL under this horrible (and powerful!!) new law.

A new danger under this law: Very recently, we have found that the IDOL may try to "fool" companies by sending them a Notice which asks for broad information and records pertaining to a substantial period of time, rather than one particular construction-related project. This approach by the IDOL is not proper, and it is excessively burdensome on the company. Do not answer these IDOL Notices under the Illinois Employee Classification Act without experienced legal counsel. You may expose yourself to over-broad liability. Remember, these IDOL assessments under this new law can be huge.

We recommend that all Illinois construction-related companies who use "1099 independent contractors", "subcontractors", "outside vendors", "casual labor", or any kind of "non-employees" seek preventative legal help at once. The IDOL (at the urging of some Unions) are using this new law to cripple, and in some cases almost destroy, Illinois construction-related companies who use independent contractors of all types.

Don't wait for the ax to fall. Learn everything you can about this law and protect yourselves and your business. There are many (relatively simple) ways to do this. Call Attorney Nancy E. Joerg to learn more about this extremely serious problem and how to coexist with it.

Questions? Call Attorney Nancy E. Joerg of Wessels Sherman's St. Charles, Illinois office: 630-377-1554 or email her at [email protected].

Nancy Joerg is an advocate and attorney for a wide variety of businesses. She defends them in their use of independent contractors. She drafts, reviews and updates independent contractor agreements. She defends companies before the Illinois Department of Labor (IDOL) in investigations under the Illinois Employee Classification Act. She also defends companies before the Illinois Department of Employment Security (IDES) in IDES audits and unemployment insurance hearings. She also defends companies before the Internal Revenue Service (IRS), the Equal Employment Opportunity Commission (EEOC), the Illinois Department of Human Rights (IDHR), and other agencies and courts.