United States: Illinois Supreme Court Upholds One Of The Nation’s Strictest Worker Misclassification Laws; Employers May Face Millions Of Dollars In Penalties

Worker misclassification is now a bet-the-company issue.

On February 21, 2004, the Illinois Supreme Court rejected a constitutional challenge to Illinois’s Employee Classification Act (the “ECA”), a law that defines most individuals who perform construction-related services as employees of the company who retains them, even if the relationship is set up as an independent contractor relationship.  Illinois’s ECA is one of the strictest worker misclassification statutes in the country.

Bartlow v. Costigan arose out of a preliminary finding that a small construction firm, Jack’s Roofing, had misclassified 10 workers as independent contractors instead of employees for periods ranging from 8 to 160 days in 2008.  The Illinois Department of Labor calculated a potential penalty for having misclassified these 10 workers as $1.6 Million.  Under the Illinois misclassification law, each day that each worker is misclassified is considered a separate violation, with fines of up to $1,000 for a first offense.  Willful violations result in triple damages.  Subsequent violations double the penalties again.

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(Please note that the date of this court decision is actually February 21, 2014)

Prevailing wage bill dies in committee


FRANKFORT – The state House of Representatives will apparently not vote on a bill to remove the requirement that public school construction projects pay the area’s prevailing wage.

The bill was sponsored by House Minority Leader Jeff Hoover, R-Jamestown, and supporters say its passage would save local school districts and the state several million dollars on school construction projects. Opponents say requiring the prevailing wage for such projects ensures higher work quality and benefits both union and non-union workers’ wages.

Worker advocacy groups say nearly 70 percent of port truckers misclassified as contractors

Nearly 50,000 of the 75,000 port truckers in the U.S. are misclassified as independent contractors, according to a recent report, which says the misclassification costs federal and state governments significant tax losses.

The Feb. 19 report was sponsored by the National Employment Law Project, Los Angeles Alliance for a New Economy and Change to Win Strategic Organizing Center – all three worker advocacy groups.

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The Center for Contract Compliance – 12th Annual Conference

Jim Reed, Director of the CCC, has just announced details for the upcoming 12th Annual Underground Economy and Labor Compliance Conference.  The conference is scheduled for May 14-16, 2014, at the Riviera Palm Springs in Palm Springs, CA.  Early registration is now available, sign up prior to April 6th, 2014, and your registration fee will be waived.

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(Register Now) 

San Rafael’s red-light camera company nabbed by state for not paying prevailing wage

San Rafael’s red-light cameras may be dark, but the city’s relationship with the provider isn’t over.

The city has been instructed by the state to withhold nearly $25,000 in payments to Redflex Traffic Systems Inc. of Phoenix, which serviced the city’s two cameras, because the company failed to pay its contractors prevailing wage when the equipment was installed in October 2009. Prevailing wage is the basic hourly rate paid to public works project employees as set by the state, ensuring contractors aren’t awarded projects based on paying lower wages than a competitor.

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