CHICAGO — Employers in Illinois won't notice an immediate litigation risk increase in the changes to the state prevailing wage law that took affect earlier this month but they will eventually, a Chicago labor attorney said during a recent interview.
"These changes should not have any immediate increase in litigation on their own," Jeffrey A. Risch, a partner and labor and employment attorney in SmithAmundsen's Chicago office, told the Cook County Record. "However, the current administration (of Illinois Gov. JB Pritzker) will tackle prevailing wage enforcement much more aggressively than the prior administration. So litigation will increase under Illinois' prevailing wage law simply due to the new governor and the Illinois Department of Labor's high prioritization of prevailing wage enforcement."
The IDOL has a couple more weeks to post prevailing wage rates for each county, as determined by the department, on its website.
Jeffrey A. Risch, a partner and labor and employment attorney in SmithAmundsen's Chicago office
| Photo courtesy of SmithAmundsen
"I am very interested to see what recommendations the IDOL will come up with as a result of their study concerning female and minority participation in prevailing wage work," Risch said. "Undoubtedly, future changes are inevitable."
Illinois' Prevailing Wage Act, established in 1941, determines wages that contractors and subcontractor must pay to all its workers on public works projects and establishes record-keeping requirements.
Former Gov. Bruce Rauner's "Turn Around Agenda" took a dim view of the state's Prevailing Wage Act, alleging it cost the state billions of dollars. Rauner advocated repeal of the law.
All that was swept aside when current Illinois Gov. JB Pritzker signed Public Act 100-1177, which amended the Prevailing Wage Act, the day after his inauguration. The amendment, which took effect June 1, changed how Illinois determines prevailing wage rates and modified obligations on public bodies.
Under the amendment, the Illinois Department of Labor became the sole government entity in the state deciding prevailing wage rates. Other public bodies are no longer responsible for adopting an annual prevailing wage resolution. Instead, the state's Labor Department now makes the call.
The amendment also establishes the state Labor Department as the sole government entity responsible for reviewing and expediting wage claims and bars state agencies from asking about an employee's salary history.
The amendment is widely seen as a bone Pritzker tossed to organized labor in Illinois while ignoring objections from conservatives who say the entire Prevailing Wage Act is unfair to nonunion construction workers. Many of these critics still maintain that the act should be repealed.
The amendment established changes for which employers and contractors need to be aware, particularly how much weight the amendment places on local prevailing wages as established by collective bargaining, Risch said.
"The prevailing rate of wages paid to individuals covered under Illinois' prevailing wage law will not be less than the prevailing union wage rates and fringe benefits and such determinations must be solely made by the Illinois Department of Labor," he said. "This will result in the IDOL relying on what’s often referred to as the 'Area-Wide Agreement' established between organized labor and a multi- employer bargaining association - provided that those employers employ at least 30% of the workers in the relevant trade in the area where the work is being performed."
Contractors may legally challenge the IDOL’s rate determinations through Section 9 of the state's hearing process, which has always been part of the Prevailing Wage Act, Risch said.
"The burden, however, is squarely on the objector," he said.
Pritzker's amendment also requires that employers now report their workers' gender, race and ethnicity, and whether their workers are veterans of the U.S. Armed Forces. The law also now mandates the IDOL to study and review female and minority participation on prevailing wage projects. The IDOL is required to make recommendations about that study to the General Assembly by the end of 2020.
Employers and contractors also need to know about the amendment's requirement that the IDOL provide an electronic database for electronic submission of all certified payroll transcripts by April 1 of next year, Risch said.
"Once implemented, all such reports must be made through this database," he said.
Employers and contractors also need to huddle up with their legal counsel to see where they stand under the prevailing wage amendment, Risch said.
"Sit down with labor counsel and thoroughly review the lay of the land, from identifying and understanding what the law requires to knowing and appreciating the IDOL's interpretations and enforcement priorities," he said. "There are so many things the entire construction industry must be intimately familiar with."
Employers and contractors should not rely on any single source, Risch said.
"This means don’t just obtain information from the IDOL, the trade unions, industry associations or any one attorney who concentrates in this very unique area of law," he said. "Take as much in as possible from many sources with differing viewpoints. Finally, this topic is not just an issue for contractors, but owners, developers, general contractors, architects, project managers and public bodies must also be familiar with one of the most potent prevailing wage laws in the U.S."