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Illinois Prevailing Wage Work Could Lead to Illinois Employee Classification Act Audits
Illinois Prevailing Wage Work Could Lead to Illinois Employee Classification Act Audits!!!
Wessels Sherman Joerg Liszka Laverty Seneczko P.C.
(630) 377-1554 PH
(630) 377-1653 FX
As many in the construction industry have come to realize (good, bad or otherwise), the Illinois Prevailing Wage Act (820 ILCS 130/0.01 et. seq.) requires contractors and subcontractors to pay laborers, workers and mechanics employed on ” public works” projects in Illinois no less than the general prevailing rate of wages (consisting of hourly cash wages plus fringe benefits) for work of similar character in the locality where the work is performed. Work subject to Illinois’ prevailing wage laws now includes any maintenance, repair, assembly or disassembly work performed on equipment whether owned, leased or rented. Suffice it to say, any business or entity with employees working on Illinois prevailing wage jobs must be intimately familiar with the Illinois Prevailing Wage Act — and all of its burdensome requirements.
One of the more burdensome requirements on any contractor working on an Illinois prevailing wage job is that which forces ANY AND ALL contractors (that either: a) actually employs workers performing prevailing wage work; or b) engages third party independent contractors or subcontractors to perform the prevailing wage work) to submit a monthly certified payroll report to the public body at issue. The Illinois Department of Labor as well as the Illinois Department of Transportation publishes a “model” certified transcript of payroll. These certified payroll reports essentially require that any and all workers (employees or subcontractors) engaged on the construction project be identified by name and relevant contact information. These records are, for the most part, considered public documents for three (3) years, and are subject to public disclosure under the Freedom of Information Act. These records are also subject to immediate review by the Illinois Department of Labor.
Therefore, there should be no secret that the State of Illinois actually mandates that all construction projects falling under the Illinois Prevailing Wage Act require that each and every contractor submit to the applicable public body a listing of the workers engaged on the prevailing wage job. To this end, the contractor MUST submit documentation disclosing not only direct employees engaged on the project, but must also disclose the identity and all relevant documents concerning each and every SUBCONTRACTOR OR INDEPENDENT CONTRACTOR engaged on the job. There is no doubt that the Illinois Prevailing Wage Act reporting requirements actually force contractors to self-report to the State of Illinois their use of any and all subcontractors (aka “independent contractors”)_on each and every prevailing wage project.
Since the Illinois Department of Labor is the agency responsible for administering, investigating and enforcing the Illinois Prevailing Wage Act, it came to no surprise to Wessels Sherman Joerg Liszka Laverty Seneczko P.C. that the same department was assigned the task of also administering, investigation and enforcing the new Illinois Employee Classification Act. In fact, the Illinois Department of Labor will now administer, investigate and enforce the new Illinois Employee Classification Act in tandem with the Illinois Prevailing Wage Act. The net result is that any contractor performing work subject to Illinois’ prevailing wage laws and also utilizing subcontractors or independent contractors to help on these same prevailing wage projects may well be targeted by the Illinois Department of Labor for compliance with both the Illinois Prevailing Wage Act and the Illinois Employee Classification Act. In other words, contractors using independent contractors on prevailing wage jobs will be “turning themselves into the State of Illinois” for Illinois Employee Classification Act audits.
BOTTOM LINE: In conclusion, any business engaged in private or public construction work in Illinois must be intimately familiar with the Illinois Employee Classification Act. And for those businesses doing construction work on public prevailing wage projects… you will no doubt be more vulnerable and exposed to State auditing for compliance under both the Illinois Prevailing Wage Act and the Illinois Employee Classification Act.
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