Senate Holds Hearing on Subcontractor Failure-to-Pay Bill

Senate Holds Hearing on Subcontractor Failure -To-Pay Bill

Bill Ward, Executive Vice President, HBAI

 

A three-member subcommittee of the Illinois State Senate Executive Committee listened to an hour of testimony last week in Chicago on legislation requiring contractors to pay wages and benefits to the employees of their subcontractors when the sub fails to pay their wages.

HB2838 (Gong-Gershowitz/Fine) was held from consideration in the Senate this Spring after it was quickly passed in the House in April. HBAI vehemently opposed this bill that is being pushed by the Carpenters Unions and the AFL-CIO.

Labor groups lined up to testify in favor of the bill, the hearing was held at the Michael Bilandic Building in downtown Chicago on Thursday, July 18. Also there to testify for the bill were representatives from “Raise The Floor,” an organization dedicated toward raising minimum wage in Illinois and other states.

HBAI was joined in opposing testimony by the Illinois Construction Industry Council, the Illinois Road & Transportation Builders Association, and the Hispanic American Construction Industry Association. Several other business groups and associations signed in opposing the bill’s passage.

While we heard nothing new from organized labor on this issue, “Raise The Floor” provided data for the first time regarding the prevalence of wage theft in the construction industry. But opponents to HB2838, such as HBAI, suspect the numbers were for all economic sectors, not just the construction sector. Their attempt to enter the discussion on this bill seemed to be more about muddying the water, not clarifying the necessity for the bill’s passage.

HBAI testified that the bill has no true data for passage, that its just a “feeling” by organized labor that this bill is needed. We illustrated the increased costs to contractors even if they never experience a subcontractor shorting an employee on wages. Our biggest point of opposition was, and still is, that HB2838 punishes an innocent entity for the wrong doing of another entity.

The best testimony came from Jorge Perez, Executive Director of the Hispanic American Construction Industry Association. He stated that his organization is responsible for training 516 non-union contractors over the last several years who hope one day to possibly be union contractors. But new and smaller contractors will never have that option if HB2838 were to become law. The expense of bonding, and the man-hours needed to create and track certified payrolls would be too much to bear for his members and only the bigger contractors would survive this new and unnecessary mandate.

Jorge’s message is not new, we have been saying this for some time, now. However, it is the first time that Democrats have heard it from an association representing ethnic contractors and that gave Democratic Committee members food for thought.

Senator Laura Fine (D-Glenview) pledged to work toward creating language that all sides could live with, that would create a safe harbor for general contractors should they have already paid their subs in full. But, so far, that language has only been proposed by HBAI and we don’t even like its contents.

Members on the Subcommittee included Committee Chair, Mattie Hunter (D-Chicago) Senate President John Cullerton (D-Chicago) and Committee Minority Spokesman Dan McConchie (R-Hawthorn Woods).

Click the link below if you wish to watch and listen to the testimony at the hearing.  (Fast forward to the 29 minute point to hear testimony) The hearing was “subject matter only” meaning that no votes were taken on its passage. The bill sits in the Senate Committee on Assignments and may be taken up for consideration during the fall veto session which begins at the end of October.

Feel free to call or write if you have any questions or concerns regarding this issues: billward@hbai.org, and (217) 753-3963.

 

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