Thursday, February 24, 2011

Illinois Prevailing Wage Act Part 2 - What a Public Entity Needs to Know

Last week we introduced the Illinois Prevailing Wage Act820 ILCS 130/0.01, et. seq, and summarized the broad scope of the Act.  This post will elaborate on the Act from the standpoint of the public body.  The Act requires that "prevailing wage" be paid to laborers, mechanics and other workers for "public works" projects.  A public works project includes essentially any construction, maintenance, and equipment installation for any "public body" or for any project receiving certain public funding. 


A public body is defined by the Act to include State agencies, municipalities, public districts (yes, this includes fire protection districts, drainage districts, water and sanitary districts, soil and water conservation districts, etc.), school districts, "and every other political subdivision."  A public entity would be well advised to assume that it is required to pay prevailing wage unless it has specific opinion from counsel to the contrary.  Illinois has A LOT of small public entities that traditionally may not have followed the Act, and by failing to comply are now at risk of violating the Act.  


What must a public body do to comply with the Act?  


Assuming that the public body is hiring a private contractor, the contractor must pay its employees/workers prevailing wage.  The public body must determine the prevailing wage for the locality where the work is performed.  This is to be done each June, and can be requested from the Illinois Department of Labor (DOL).  Once the prevailing wage is determined for the locality, the public body is to publicly post or keep available for inspection a copy of the prevailing wage rates, and file a certified copy with the Illinois Secretary of State and the DOL.  If the project is publicly bid  or contracted pursuant to design plans and specifications, the public body must include a stipulation that the contractor and subcontractors must pay prevailing wage for work on the project.  If there are no such documents, the public body must similarly notify the contractor in writing on a purchase order or separate document.  If the DOL changes the prevailing wage rates applicable to the project, the public body is required to notify the contractor and subcontractors of the change.  The public body must also require that any contractor or subcontractor bonds include a provision to guarantee payment of prevailing wages.  


What happens if th public body does not comply with the notice requirements?


If the DOL receives a complaint and determines that the required notice did not occur, the DOL shall order the public body or other entity (such as the owner of a private construction project receiving public funds identified in the Act) to "pay any interest, penalties or fines that would have been owed by the contractor if proper written notice had been provided."  The contractor is still responsible to make up the difference and pay the prevailing wage (back wages), however, despite not having received the required notice from the public body.  In addition, any officer, agent, or representative of a public body who willfully violates or fails to comply with the Act is guilty of a Class A misdemeanor.  


Certified Payroll


The contractor is required to submit monthly certified payroll records to the public body, and the public body is required to maintain these records for three years.  These records document wages paid to each worker, using a DOL form.  The records are required to include personal information such as each worker's home address, phone number when available, and social security number.  NOTE - Certified payroll records may be requested subject to the Freedom of Information Act, 5 ILCS 140/  (FOIA), however certain redaction requirements apply.  If you represent a public body and receive a FOIA request seeking certified payroll records, consult a licensed Illinois attorney or the Illinois Attorney General's Office to ensure that you comply with these requirements.  It is a situation where a public entity could unknowingly incur liability for failure to redact despite the best of intentions to comply with FOIA.


This is merely a summary of issues in the Act of interest to public bodies; it is not comprehensive.  For more information, consult the DOL's website (their Frequently Asked Questions page is particularly helpful), or consult a licensed Illinois attorney.  If you are a member of an association of similar public bodies (such as the Illinois Municipal League), the association is also a great resource for you to obtain more information and answers to questions you might have.   

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