Illinois Prevailing Wage Act

Marc R. Poulos
Executive Director

What is the Indiana, Illinois, Iowa

Foundation for Fair Contracting?
The III FFC is a Labor - Management organization
whose goal is to promote bidding compliance and
equity.
Its goals include:
To be an employee and employer advocate in the

construction industry through education and action.

To assist Management and Labor in obtaining work
through fair and equitable bidding practices, helping to
provide a level playing field for all responsible
contractors who competitively bid public works
projects.

III FFC - Prevailing Wage

Compliance Monitoring
Monitors check jobsites, file complaint packages
with various agencies
Educate public bodies on importance of
responsible bidding
File lawsuits/amicus briefs regarding the scope
of the IPWA

Prevailing wages are predetermined

wages for workers engaged in the
construction of a public work.
Why have prevailing wage rates?

Why Prevailing Wages

It seems to me that the federal government should

not engage in construction work in any state and
undermine the labor conditions and the labor wages
paid in the state.The least the federal government
can do is comply with the local standards of wages
and labor prevailing in the locality where the building
construction is to take place (NY Representative

Robert L. Bacon).

Little Davis-Bacon
State prevailing wage laws, including the Illinois Prevailing

Wage Act enacted in 1941, are often referred to as little

Davis-Bacon laws.
The same reasons offered by Senator Bacon when
referring to the federal Davis-Bacon Act apply to state
prevailing wage laws.

A Primer on the Illinois Prevailing Wage Act

Everyone should know the Act, especially public bodies
Contracting agency should want to ensure compliance with
local wage rates and labor standards
Recent amendments to the Act make public bodies liable
for some violations

What Projects are Covered? Sec. 2

1.

Direct contract between a public body (State of

Illinois or one of its political subdivisions) and a
contractor.

2.

Financing for the project comes from various

funding mechanisms within the statute. For
example: Build Illinois Bond Act or funds for
school construction.

3.

Non-governmental organization funded in

whole or in-part by public funds/financing.

Projects Covered Case Law

Opp. Center of Southeastern Ill., Inc. v. Bernardi (5th Dist. 1990)

Not-for-profit was a public body for purposes of PWA

because it received over of its revenue from Dept. of
Health and Developmental Disabilities and is publically
supported by tax money
McKinley Foundation v. Illinois Dept. of Labor (4th Dist. 2010)

Private foundation covered under PWA where

construction project financed in part with funds issued
by the Illinois Finance Authority

Town of Normal v. Hafner (4th Dist. 2009)

PWA does not apply to private developer constructing

private residences, where developer receives TIF
incentive (despite multiple amendments, public works
definition does not include TIF)

WHO IS COVERED? Sec.3

All workers directly employed by contractors and
subcontractors and engaged in actual construction on
the site of construction, including workers engaged in

the transportation of material and equipment to and

from the site
Excludes transportation by sellers and suppliers

The transportation proviso is often misapplied by

contractors (e.g. Drillers)

Sec. 3 Coverage Cont.

This also includes any maintenance, repair, assembly, or

disassembly work performed on equipment whether

owned, leased, or rented.
Demolition projects are covered regardless of whether in

conjunction with subsequent public works projects.

P.A. 96-0186, eff. Jan. 1, 2010

Coverage Cont.
In addition to the enumerated funding mechanisms (i.e. the
Illinois Finance Authority in McKinley Foundation v. Illinois Dept.
of Labor), the PWA covers:

All projects financed in whole or in part with bonds,

grants, loans, or other funds made available by or
through the State or any of its political subdivisions.
P.A. 96-58, eff. Jan. 1, 2010.

Coverage Cont.
All work performed pursuant to a public private

agreement under the public private agreements for the

Illiana Expressway Act (P.A. 96-913, eff. June 9, 2010)
All projects undertaken under a public-private agreement

under the public-private partnerships for transportation

Act (P.A. 97-502, eff. Aug. 23, 2011)

CONTRACT STIPULATIONS:
Public Bodies, Sec. 4
Public Body must ascertain general prevailing
wages.
Public bodies must insert a prevailing wage
stipulation into the bid specifications and contract.
Public bodies must provide written notice to the
to the contractor indicating prevailing wage

applies (on contract, purchase order, or other

separate document) (P.A. 96-0437, eff. Jan. 1,
2010)

VIOLATIONS: Public Bodies, Sec. 4

IDOL determines violations
If the public body/entity failed to provide written

notice to contractor, it is responsible for interest,

penalties, or fines.
P.A. 96-437, eff. Jan. 1, 2010
Response to Brandt Construction Company v. Ludwig

Public Bodies are NOT responsible for back wages

even if proper notice was not given.
P.A. 96-437, eff. Jan. 1, 2010

CONTRACT STIPULATIONS:
Contractors, Sec. 4
Contractors must insert a written prevailing wage
stipulation into each lower tier contract
Contractors must have a prevailing wage
stipulation in all bonds
Contractors must provide subcontractors with a
written statement indicating prevailing wage
applies
P.A. 96-437, eff. Jan 1, 2010

VIOLATIONS: Contractors, Sec. 4

IDOL determines violations
If no written notice to subcontractor, contractor

responsible for interest, penalties, or fines

Contractors are NOT responsible for back wages
when proper notice was not given.
P.A. 96-0437, eff. Jan 1, 2010

Revised Rates Sec. 4, cont.

Revised rates apply throughout the term of the contract
The public body in charge of the project is responsible to

notify contractors of the revision

Failure to notify contractors of revisions can result in
criminal penalties under Sec.6.

Class A Misdemeanor, P.A. 96-571, eff. Jan 1, 2012

Effective Jan. 1, 2013, A public body or other entity will

meet its duty to notify contractors of revised rates if the

contract document or other written instrument states that
the prevailing rate of wages are revised by IDOL and
available on the Departments official website.

POSTING, Sec.4
As of June 1, 2004, Contractors must post prevailing wage

rates.
Where must rates be posted?
On the job site in a place that is easily accessible;
At a regularly visited office; or
Provide written notice

Failure to post may result in 1st Notice of violation

NEW CLASSIFICATIONS, Sec.4

Anyone affected by a classification may petition IDOL

objecting to the failure to include a classification.

However, the new classification must involve work that is
substantially different from any existing classification.

Material Tester Classification

The Material Tester Classifications, effective January 1,

2007, affects the work of Material Testing for the

following counties:
Boone, Carroll, Cook, DeKalb, DuPage, Grundy, Kane,

Kankakee, Kendall, Lake, Lee, McHenry, Ogle, Will and

Winnebago

Material Tester I
Material Tester I: Hand coring and drilling for testing of

materials; field inspection of uncured (plastic) concrete

and asphalt.

Material Tester II
Material Tester II: Field inspection of welds, structural

steel, fireproofing, masonry, soil, faade, reinforcing steel,

formwork, cured concrete, and concrete and asphalt
batch plants; adjusting proportions of bituminous
mixtures

RECORD KEEPING, Sec. 5

Contractors must keep accurate records for 5 years

from the last payment made in paper or electronic

form
Contractors must annualize all fringe benefits
What must be kept?
Name, address, telephone number, social security

number
Classification(s)
Hourly wages and O/T wages paid in each pay period,
the hours worked each day for each worker
performing work in a prevailing wage classification on
the site of the construction project
The start and end times of work each day

RECORD KEEPING, Sec. 5

Gross and net wages

Hourly fringe benefit rate
Name and address of each fringe benefit fund
Plan sponsor of each fringe benefit fund
Plan administrator of each fringe benefit fund
However, if a contractor or subcontractor remits
contributions to a jointly administered fringe fund (i.e.
LMRA Fund), contractors and subcontractors only net
gross and net wages above need to be reflected.

Certified Payroll, Sec. 5

In addition to the records retention, contractors must:
Submit monthly to the public body in charge of the

project a certified payroll consisting of a complete copy

of the records identified in the retention portion of
Section 5 by the tenth of the month

Payroll must be accompanied by a statement signed by

the contractor which avers that the records are true and
accurate, appropriate prevailing wages were paid and
the contractor is aware that filing false certified payroll
is a Class A misdemeanor

Failure to file a certified payroll is a violation of the Act

Certified Payroll, Sec. 5

In addition, upon seven business days notice, the
contractor must make records available to the IDOL,
public body in charge of the project, and federal,

state, or local law enforcement agencies.

P.A. 96-571, eff. Jan. 1, 2012

Public Body Retention, Sec. 5

Public bodies are required to retain certified payrolls
for a period of five (5) years from the date of the last
payment for work

In addition, the certified payrolls are considered

public records, except an employees address,
telephone number and social security number, and
must be made available to the public in accordance
with the Illinois Freedom of Information Act

VIOLATIONS, Sec.6
Public bodies and contractors are liable if they willfully

omit to comply or willfully violate the Act or contractors

that willfully fail in their duty to create, maintain, keep or
produce records or documents: Class A misdemeanor
(P.A. 96-571, eff. Jan 1, 2012)
Employees and agents can make the public body or contractor

liable (P.A. 96-571, eff. Jan 1, 2012)

Statute of limitations extended from 3 to 5 years

Enforcement
IDOL has a statutory obligation to investigate all

complaints
Attorney General shall prosecute cases upon complaint
from the IDOL or any interested person

Establishing rates, Sec.9

Every June the individual public bodies or the IDOL

investigate and ascertain the general prevailing wage rates

for each county and each classification. The rates are posted
on the IDOL web site.
Beware, wage rates generally only change in June whereas
fringes can change throughout the year.
Any person affected by a wage determination may file
objections with the IDOL within 30 days after the rates are
posted on the web site in June.
Why do cheaters not object? One who has a proclivity to
cheat does not object because the higher the prevailing rate,
the more money the contractor puts in his pocket.

The RATERATERATE
As mentioned, the prevailing rate is not a Union
rate. In fact, in 1997 and 1998 the IDOL conducted a
statewide survey for each County. First, the IDOL
ascertained projects by contacting 2,059 public
bodies across the state. From that information, the
IDOL contacted 5,067contractors and subcontractors
to ascertain the wage classifications and rates paid on
the projects. Then, the IDOL compiled collective
bargaining agreements. From that information, the
prevailing wages for each County were extrapolated.

Beary Landscaping v. Shannon

(7th Cir. 2012)

IDOL collects prevailing wage rates by using those set

in the private collective bargaining process
Not an unlawful delegation of regulatory power to
private parties
Object within 30 days of posting and obtain administrative

and judicial review

IDOL ENFORCEMENT
The IDOL can and will interview workers
The IDOL can and will issue subpoenas
In the past, subpoenas resulted in delay/litigation as
contractors refused to turn over records
Current policy is to issue a notice of violation re: recordkeeping/failure to respond
AG will pursue criminal violations at direction of IDOL

DEBARING CONTRACTORS, Sec.11, 11a

Section 11a is the only section where the IDOL has

rule making authority.

Specific hearing procedures at 56 Ill. Adm. Code 100
Contractor may be debarred for up to 4 years from the
date its name is placed in the Illinois Register.
Contractors guilty of sec. 5 or 6 are automatically
subject to debarment, no right to a hearing (P.A. 96571, Jan 1, 2012)

ADMINISTRATIVE CODE
56 Ill. Adm. Code 100
Factors IDOL considers on whether issue a notice of violation:

Severity - whether there has been more than one violation and
whether the violation involves a non-technical substantive error, i.e.
willful conduct;
Frequency and duration - whether a general inspection of the
contractors history reveals other violations;
Amount in controversy - The difference between the amount actually
paid and the prevailing wage rate, no set dollar amount triggers;
Accurate Records - whether the contractor has cause to be kept
accurate records;
Access - Whether the contractor has cooperated with IDOL.

WORK STOPPAGE, Sec.11

No public works shall be instituted where the Act has not

been complied with (i.e. contract stipulations, wage rates,

bonds)
The AG may enjoin the continuation of a project where

the Act has not been complied with.

PRIVATE RIGHT OF ACTION

Any employee who has been paid a sum less than the

stipulated prevailing wage has a private right of action

against the contractor who failed to pay the proper wage.
Not required to exhaust administrative remedies
Attorneys fees are available.

PENALTIES, Sec.11
In addition to the wages the contractor is also liable to the

IDOL for a 20% PENALTY. Second violation = 50%.

2% Punitive damages accrue each month if the contractor
fails to pay the wages after a determination has been
made. Second violation = 5%
IDOL also has a right of action on behalf of employees who
choose not to exercise a private right of action.
Public body or contractor may be liable if no written
notification

WHISTLEBLOWER PROTECTION, Sec.11b

Employees who are retaliated against for filing, instituting

or causing to be filed any proceedings under the Act.

Must be within 30 days of the alleged retaliation apply to

the IDOL for a review of the retaliation

Compliance
The State of Illinois has regulated labor costs on pubic

works projects since 1941

Enforcing this Act ensures the protection of local
prevailing rates for every worker engaged in public works

For more information contact:

Illinois Department of Labor
http://www.state.il.us/agency/idol/
Geoffrey Griffith/ NAFC Administrator
http://faircontracting.org

National Alliance for

Fair Contracting

Marc Poulos / III FFC Executive

Director
http://www.iiiffc.org