Proposed Amendment to Illinois Wage Payment and Collection Act: A Recipe for Disaster!

By: Geoffrey Bryce

Proposed House Bill Amendment: IL HB2838
A contractor who enters into a contract on or after July 1, 2019 in Illinois is liable for any debt incurred by a subcontractor owed to a wage claimant or third-party on the wage claimant’s behalf.

The proposed amendment means a general contractor could be liable for the trade contractor’s employees – even though the general contractor paid the trade contractor.

The Illinois Department of Labor (DOL) would handle enforcement.

Present Law: Under the current prevailing Illinois Wage Payment and Collection Act, a general contractor is not liable for the prevailing wages owed by a subcontractor to its employer. In Cement Masons Pension Fund, Local 803 vs. William A. Randolph, Inc., 832 N.E.2d 228 (1st Dist. 2005), the First District held that a contractor is not responsible for subcontractor violations of the Act.

Reasons to oppose the proposed bill:

  1. Payment bonds provide adequate security.
  2. It is not clear who would receive the statutory penalty.
  3. The Illinois DOL? The general contractor could be liable for second, third and lower tier defaulting subcontractors.
  4. General contractors will now be required to supervise the labor payments, adding additional time/overhead costs to the project.
  5. No notice provision to the general contractor for a defaulting subcontractor.
  6. It is not clear if attorney’s fees will be awarded against the general contractor.
  7. If the owner fails to pay the general contractor, must the general contractor now bankroll the subcontractor’s labor payments or risk liability consequences?

Please contact your state representative to take action.

Chicago, Illinois 312-377-1501 | Schererville, Indiana 219-488-2590

Chicago, Illinois

312-377-1501


Schererville, Indiana

219-488-2590