Governor Quinn Signs Union Backed Bill Which Expands Illinois’ Prevailing Wage Law
On July 23, 2009, Governor Quinn signed PA 96-0058 - an amendment to Illinois’ prevailing wage law that arguably expands the law’s coverage and scope, and (more importantly) opens the door for BIG Labor to cause quite a stir at “City Hall.”
Brief History:
Having handled hundreds of prevailing wage matters over the years, certain interest groups as well as the Illinois Department of Labor (“IDOL”) would argue that Illinois case law and Attorney General opinion letters support the notion that the Illinois Prevailing Wage Act (“IPWA”) (820 ILCS 130) applied to construction projects undertaken by purely private entities which receive funds, monies or grants from the State. In other words, purely private entities receiving State financial assistance often found themselves being forced to observe Illinois’ expansive prevailing wage requirements. Relying on Illinois Attorney General Opinion 97-014, July 7, 1997, 1997 WL 398809; Illinois Attorney General Opinion 00-018, December 29, 2000, 2000 WL 33152172; Opportunity Center of Southeastern Illinois v. Bernardi, 204 III. App. 3d 945, 562 N.E. 2d 1053 (5th Dist. 1990); Bernardi v. Illini Community Hospital, 163 III. App. 3d 987, 516 N.E.2d 1320 (4th Dist. 1987). However, the law’s application to local TIF-Districts, local Business Development Districts, local Special Service Areas and other local enterprise zones containing special tax breaks or financial incentives for private development was not settled; therefore, the State of Illinois’ enforcement agency (the IDOL) would typically not enforce the IPWA on these unique private development projects.
New Law:
In an attempt to codify the opinions referenced above and broaden the application of the law to private enterprise, SB223 was signed into law by Governor Quinn on July 23, 2009 as PA 96-0058. Essentially, PA 96-0058 amends the definition of “public works” contained in the IPWA to include all projects financed in whole or in part with bonds, grants, loans or other funds made available by and through the State or any of its political subdivisions. What’s interesting is that BIG Labor wanted the State Legislature to pass a bill that specifically referenced TIF-Districts, enterprise zones, etc… but was unsuccessful in doing so. But, through the more vague and open-ended legislation introduced through SB223, BIG Labor may have been able to get what it originally hoped for and intended. What’s certain, based purely on experience and rumblings, is that the language contained in PA 96-0058 will undoubtedly invite BIG Labor to increase pressure on local and State officials to apply the IPWA on purely private projects that indirectly receive financial assistance from a local body of government.
The Net Effect:
It’s way too early to predict how PA 96-0058 will play out in the courts or before the IDOL. At this time, any and all contractors doing business in Illinois should become intimately familiar with Illinois’ prevailing wage law (including the IDOL’s history of administering and enforcing the law up to now). Also, local units of government need to consider the impact of this new language and weigh the pros/cons in providing any financial assistance in private development projects going forward. Furthermore, all private construction contracts should be reviewed carefully for language addressing the effect of a contemplated private project being deemed to fall under the IPWA’s scope and coverage. The bottom line (for now): Starting January 1, 2010 BIG Labor will use PA 96-0058 to its greatest advantage— that is to argue the IPWA’s application to as many private projects as possible.
NOTE: PA 96-0058 does clarify that work done directly for a public utility company, whether or not done under public supervision or direction, or paid for wholly or in part out of public funds; or projects undertaken by the owner of an owner-occupied single-family residence, or at an owner-occupied unit of a multi-family residence shall not be included as falling under the law’s coverage.
More Information:
Jeffrey Risch regularly counsels both union and non-union contractors, CPAs, fellow lawyers and local bodies of government on prevailing wage laws and is deeply involved in prevailing wage controversies throughout the United States, with a particular emphasis relating to the Illinois Prevailing Wage Act. For more information on these matters, please contact Jeffrey.