Primary Contractors Liability for Subcontractors’ Employees Still Roosting in Illinois Senate
Bill Ward, Executive Vice President, HBAI
With two weeks to go in the Illinois General Assembly Spring session, HBAI is working for the defeat of HB2838, a bill holding “Primary Contractors” jointly liable for the wages & benefits of subcontractors’ employees.
HB2838, which passed in the House in April on a partisan roll call, is still sitting in the Senate Committee on Assignments, which means it hasn’t gone anywhere since its arrival in the Senate. But with Organized Labor pressing hard for its passage, the Democratic Majority in the Senate will have a difficult time saying “No” to a bill even if it has no basis for consideration.
General Contractors, referred to in the bill as “Primary Contractors” will be held jointly liable for the wages & benefits of subcontractors’ employees when it is determined in court that the employees did not receive full wages & benefits from the subcontractor. Primary Contractors would pay twice for a sub’s work and could even lose their own property to fulfill their court-ordered obligations.
The Carpenters Unions have stated in writing that 22.9% of all construction workers in Illinois are shorted wages & benefits each year. They have no proof of this number, but they contend there is a report somewhere that states that this is so. The only report we have found regarding this issue, states that less than 3% of construction workers who receive minimum wage are shorted pay each year.
Senate President John Cullerton (D-Chicago) has held two meetings in his office with stakeholders in the last two weeks. Senator Laura Fine (D-Glenview) has been in attendance, as well. HBAI is leading the negotiations for the opposition with strong help from 14 other business groups and associations.
HBAI has offered two amendments to the bill: one to exempt all residential development, construction, remodeling, and repair work; and a second amendment to create a “Safe Harbor” for Primary Contractors who have paid the subcontractor(s) in full and have received lien waivers for their work. Neither amendment has been accepted at this time.
Labor has countered with two changes to the bill. Right now, a Primary Contractor could be sued by an employee who has been given a green light by the Dept. of Labor to do so; or, they can be sued by a “third party” for non-receipt of fringe benefits; or, they can be sued by a Labor/Management Cooperation Council set up by the bill. Labor Representatives have agreed to narrow this language to only the first provision; employees who have been certified by the DOL to file suit.
Labor also offered language creating an exemption for construction work under $50,000. Proponents believe this will protect most homeowners from the Act on remodeling jobs under $50K. This was to be considered a reasonable counteroffer to our full exemption for residential work, it was not.
Not only did we not accept the exemption, but we find that this offer confirms our contention that homeowners could be held jointly liable for the subcontractors’ employees to the point they could lose their property to repay wages & benefits.
Commercial builders are looking for their own relief to HB2838. They are asking for an exemption for all union projects and a requirement that all subs provide a certified payroll to the primary contractor.
Both commercial and residential builders would be served well with the Safe Harbor language and should probably agree to make this a “Must Have” provision to HB2838.
Ordinarily, a bill like this would get some attention from the media or at least some more critical review from the rank & file members of the Illinois General Assembly. But a Constitutional Amendment to change income taxation, the legalization of marijuana, expansion of casinos, video gaming, the legalization of sports betting, and much more is creating quite a bit of shade for bad bills like this one.
May 31st is our scheduled adjournment date, pray for its quick arrival and for the defeat of HB2838.
