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Merit Update Capitol News: June Edition

by Shattuck & Associates Consulting, Inc. 

General Assembly Adjourns without a Budget

For the third year in a row, lawmakers left Springfield last Wednesday evening without sending a budget to Governor Rauner. When the Senate adjourned, many Democrat Senators commented that they had done their job and there was no need for them to return until the House decided what they were going to do about the budget. Last week, the Senate Democrats approved a budget along with more than $5 billion in increased taxes to fund it. The House adjourned earlier in the evening with the full expectation of coming back in June to address the budget. However, the political formula becomes more difficult as all bills with immediate effective dates will require a three-fifths majority meaning there will need to be Republican votes to send any legislation to the Governor. 


This week was a difficult one for those of us lobbying on behalf of employer interests at the State Capitol. A number of measures that will cut into Illinois’ ability to retain and attract jobs were approved by the General Assembly. Many of these were pushed knowing that they were likely to be vetoed by Governor Rauner. However, some of these have a popular political tone on their surface and going into a tough re-election in 2018, the Governor may want to take the popular, political road to avoid the simplistic barrage that can be used against him. To help avoid any question of the direction the Governor should take, Illinois businesses must take the initiative to let the Governor know how important these issues are to undermining the state’s wobbly economic well-being. When the House returns several other, important anti-business issues likely are to be approved.


ABC Issues that Passed Both Chambers


HB 732, sponsored by Rep. Dan Burke (D-Chicago)/Sen. Iris Martinez (D-Chicago), provides that nothing in the Illinois Roofing Industry Licensing Act shall be construed to require an employee who performs roofing or waterproofing work to his or her employer's residential property, where there exists an employee-employer relationship or for no consideration, to be licensed as a roofing contractor. Provides that nothing in the Act shall be construed to require a person who performs roof repair or waterproofing work to his or her employer's commercial or industrial property to be licensed as a roofing contractor, where there exists an employer-employee relationship. Defines "roof repair", which excludes circumstances when a torch technique is used. Effective immediately.


HB 2664, sponsored by Rep. Will Davis (D-Hazel Crest)/Sen. Harris (D-Flossmoor), to require a contractor or subcontractor that receives any payment under contract with a State official or agency to pay each lower-tiered subcontractor and material supplier. For construction contracts with IDOT, it prohibits the contractor, subcontractor, or material supplier from offsetting, decreasing, or diminishing payments that are due to its subcontractors or material suppliers without reasonable cause. If, on 2 or more occasions with a 3-calendar-year period, a contractor fails to make payment in full without reasonable cause, the contractor will be barred from entering into State public construction contracts for a period of 6 months.


HB 2876, sponsored by Rep. Jay Hoffman (D-Collinsville)/Sen. Mike Hastings (D-Orland Hills), prohibits owners and operators of sanitary landfills located within a 25-mile radius of an eligible shingle recycling facility to accept disposal loads of asphalt roofing shingles that can be processed into reclaimed asphalt shingles meeting IDOT or State Toll Highway Authority specifications. Nothing in this bill prohibits or restricts a sanitary landfill from accepting for disposal asphalt roofing shingles that can be processed into reclaimed asphalt shingles meeting Department of Transportation or Illinois State Toll Highway Authority specifications but that are either co-mingled with municipal waste or rejected by an eligible shingle recycling facility. Effective immediately.


HB 3044, sponsored by Rep. Jay Hoffman/Sen. Ira Silverstein (D-Chicago), requires the Department of Labor to publish, no later than August 15 of each year on its official website, a prevailing wage schedule for each county in the State based upon the prevailing rate of wages investigated and ascertained by the Department during the month of June. Authorizes the Department to publish rates more frequently than once per year.


HB 3120, sponsored by Rep. Tom Demmer (R-Dixon)/Sen. Tim Bivins (R-Dixon), allows a public body to satisfy the Prevailing Wage Act’s notice requirement by newspaper publication by posting on the public body’s website a hyperlink to the prevailing wage schedule for that locality that is published on the official website of IDOL. Effective Immediately.


SB 71 , sponsored by Sen. Don Harmon (D-Oak Park)/Rep. Lou Lang (D-Skokie), modifies a section concerning certification of installers, maintainers, and repairers under the Public Utilities Act to remove all references for certification of persons or entities that install, maintain, or repair new wind projects. Effective immediately or on the date Public Act 99-906 takes effect, whichever is later.


SB 1807, sponsored by Sen. Don Harmon/Rep. Kelly Burke (D-Evergreen Park), prohibits a municipality from entering into any new contracts, but may extend or renew a contract, with any other unit of local government, by intergovernmental agreement or otherwise, or with any business or person relating to the collecting and final disposition of general construction or demolition debris. Exempts municipalities with populations of 1 million or more.


ABC Issues that were Defeated


HB 366//HB 582(AM1), sponsored by Reps. Margo McDermed (R-Mokena) and Jay Hoffman, to increase penalties under the Employee Classification Act from $1,000 to $1,500 for the first violation and from $2,000 to $2,500 for each repeat violation within a 5-year period. A person who willfully violates any provision of the Act is liable for penalties up to triple the statutory amount and be debarred from being awarded a State contract.


HB 2493, sponsored by Rep. Hoffman, required public bodies to specify in bids that each bidder be a responsible bidder and requires reporting of hours worked by minorities and females.


HB 2495, sponsored by Rep. Hoffman, requires the prevailing wage to be the rate determined under collective bargaining agreements in the locality provided that the agreements cover at least 30% of the workers.


HB 3744, sponsored by Rep. Melissa Conyears-Ervin (D-Chicago), requires all construction contracts to have at least 10% of man-hours be performed by individuals who reside in areas of poverty.


SB 995, sponsored by Sen. Kyle McCarter (R-Lebanon), clarifies the definition of aggravated stalking under the Criminal Code of 2012 and adds to the definition of aggravated stalking: (1) causes damage to the property of the victim; (2) engages in harassment or intimidation of the victim; or (3) violates a workplace protection restraining order. Provides that the exemption from an aggravated stalking violation for picketing occurring at the workplace that is otherwise lawful and arises out of a bona fide labor dispute does not apply if the individual or organization has engaged in acts of violence or there is a credible threat of violence. Expands the Workplace Violence Prevention Act to all employers. Provides that the exemption from the Act for picketing, patrolling, using a banner, or otherwise protesting at the workplace in relation to a bona fide labor dispute does not apply if the individual or organization has engaged in unlawful violence against the employer seeking the workplace protection restraining order or the property of the employer or there is a credible threat of violence against the employee, the employer, or the property of the employee or the employer.


SB 1347, sponsored by Sen. Daniel Biss (D-Evanston), creates a “minimum wage” of $16.36/hr for new contracts and subcontracts to be paid to workers in performance of the contract or subcontract created after January 1, 2018. Requires IDOL to adjust the set wage by the annual percentage increase in the consumer price index. Creates a private right of action to enforce the Act and penalty of debarment for violation .


SB1513, sponsored by Sen. Kimberly Lightford (D-Maywood), creates the Apprenticeship Utilization Act, provides that on projects covered under the Prevailing Wage Act where the estimated cost is in excess of $250,000, all specifications shall require that no less than 15% of the labor hours within each trade be performed by apprentices of that trade. We continue to meet with Sen. Lightford to help bring more women and minorities into the construction industry.


ABC Issues Still Pending

(After May 31st will require a 3/5 majority for an immediate effective date. Otherwise it will have a July 1, 2018 effective date.)


HB 2482, sponsored by Rep. Norine Hammond (R-Macomb)/Sen. Jil Tracy (R-Quincy), changes the name the Illinois Workforce Investment Board Act to the Illinois Workforce Innovation Board Act and the State Workforce Investment Board to the State Workforce Innovation Board. Appointments made to the Board must be in accordance with the federal Workforce Innovation and Opportunity Act.


HB 2953, sponsored by Rep. Marcus Evans (D-Chicago)/Sen. Martin Sandoval (D-Cicero), requires the Chicago Transit Board, the Board of Trustees of a local Mass Transit District, and the Board of Directors of the Regional Transportation Authority to adopt regulations to insure that specified acquisitions involving a cost of more than the small purchase threshold set by the Federal Transit Administration and the disposition of all property of the Authority to be after public notice and with public bidding. They must also adopt regulations to ensure that specified construction, demolition, rehabilitation, renovation, and building maintenance projects involving a cost of more than $40,000 to be after public notice and public bidding.


SB 263, sponsored by Sen. James Clayborne (D-Belleville)/Rep. Barbara Flynn Currie (D-Chicago), requires IDOT and CDB to hold 2 public hearings to determine if a more effective, efficient, and less burdensome method exists to prequalify an architect, engineer, or contractor and to find ways to obtain greater participation in the bidding process of small contractors and minority, female, disabled, and veteran architects, engineers, and contractors. Provides that a person who knowingly manipulates a work rating factor for a contractor or subcontractor that results in a rating disqualifying or qualifying a contractor or subcontractor who would have been otherwise qualified or disqualified commits manipulation of work ratings. Provides that manipulation of work ratings is a Class 4 felony. Effective immediately.


SB 676, sponsored by Sen. Hastings, to allow CMS to annually conduct energy efficiency audits of State-owned real property; annually rank State-owned real properties according to their energy efficiency; and encourage energy efficiency audits of State-owned real properties based on those rankings. Whenever a State agency or the Board enters into a contract with a vendor for the purpose of fulfilling the provisions of the amendatory Act, the contract shall meet the requirements of the Illinois Procurement Code and the Architectural, Engineering, and Land Surveying Qualifications Based Selection Act. No person or business who contracts with a State agency to write specifications, or otherwise provides specifications, for a procurement need related to energy efficiency audits conducted shall submit a bid or proposal or receive a contract for that procurement need.


SB 1355, sponsored by Sen. Hastings, requires the Pollution Control Board to adopt rules proposed by the Illinois EPA allowing for the subdivision of areas within a permitted clean construction or demolition debris site for specified purposes. The EPA may grant permit modifications for closure of a subdivided area within permitted clean construction and demolition debris fill operation upon application by the operator. Provides that the Agency shall consult with members of the mining, construction, and real estate development industry during the development of any rules to promote the purpose of specified provisions.


SB 1401, sponsored by Sen. McGuire, makes changes to requirements for competitive sealed bidding and competitive sealed proposals. Increases the small purchase threshold and certain other thresholds to $100,000. Requires contractors to be authorized to conduct business in Illinois at the time of contract execution, rather than at time of proposal or bid. Sets forth requirements for best value procurement. Includes public institutions of higher education in provisions concerning design-build contracts. In provisions concerning design-bid-build construction procurement, provides that contracts entered into with the successful bidder shall provide that no identified subcontractor may be terminated without the written consent of the public institution of higher education. Removes certain provisions concerning awards by State agencies and multi-step sealed proposals.


SB 1430, sponsored by Sen. Sandoval, provides that it is unlawful for the Department of Transportation, its employees and its agents to knowingly misrepresent any facts in relation to the submission of plans, maps, specifications, costs of construction, bids, or contracts for any Department project.


SB 1753, sponsored by Sen. Martinez, amends the Private Detective, Private Alarm, Private Security, Fingerprint Vendor, and Locksmith Act of 2004. Provides that reasonable attorney's fees and costs may be awarded to a licensee, interested party, or person injured if he or she successfully obtains injunctive relief, whether by consent or otherwise. Effective immediately.


SB 1832, sponsored by Sen. John Mulroe (D-Chicago), provides that all moneys withheld as retainage from payments made to any contractor or subcontractor under any construction contract, except those contracts that provide for retainage of 5% or less, shall be held in trust for the benefit of the contractors and subcontractors from whom the retainage has been withheld. Provides that separate records of account shall be kept for each person for whom trust funds are held, and trust funds are not required to be deposited into a separate bank account solely for that purpose as long as trust funds are not expended in a prohibited manner. Provides that any person who knowingly retains or uses the moneys held in trust for any purpose other than to pay those for whom the moneys are held is liable for all damages sustained, including interest at 10% per annum and reasonable attorney's fees.


SB 1904, sponsored by Sen. Biss/Rep. Hoffman, provides that the prevailing wage shall not be less than the rate under collective bargaining agreements between employer associations and bona fide labor organizations relating to each craft or type of worker or mechanic needed to execute the contract. If bargaining agreements do not exist in the locality or were not available to the Department of Labor, the Department of Labor shall ascertain the prevailing wage for work in the nearest and most similar neighboring locality. Applies to public works performed without a written contract.


SR 323, sponsored by Sen. Clayborne, urges the Auditor General to conduct an audit of IDOT compliance with 44 Ill. Adm. Part 650.240 of the Illinois Administrative Code, which is the Performance Factor numerical value given to a contractor’s performance evaluation in a work category during the previous year, over the past two years in the cities of Chicago, East St. Louis, and Peoria.


Governor’s Commitment to Protect Business

Challenged by Democrat Legislative Majorities


Here is the list of key bills impacting ABC members that were passed by both chambers thus far:


SB 81, sponsored by Sen. Kimberly Lightford (D-Chicago)/Rep. Will Guzzardi (D-Chicago), increases the minimum wage for an employee who is 18 years of age or older or if under 18 has worked more than 650 hours during any calendar year: to $9 per hour from January 1, 2018 to December 31, 2018; to $10 per hour from January 1, 2019 to December 31, 2019; to $11.25 from January 1, 2020 to December 31, 2020; to $13 per hour from January 1, 2021 to December 31, 2021; and to $15 per hour on and after January 1, 2022. For an employee who is under 18 years of age that has not worked more than 650 hours for an employer during any calendar year, the minimum wage shall be: (1) $8 per hour from January 1, 2018 to December 31, 2018; (2) $8.50 per hour from January 1, 2019 to December 31, 2019; (3) $9.25 per hour from January 1, 2020 to December 31, 2020; (4) $10.50 per hour from January 1, 2021 to December 31, 2021; and (5) $12 per hour on and after January 1, 2022. The legislation creates a convoluted credit against the withholding tax liability of employers with 50 or fewer employees, calculated based on the increase in the minimum wage. The Senate approved the measure on a 30-23-2 vote. Earlier in the week, the House vote was 61-53-2.


HB 2525, sponsored by Rep. Jay Hoffman (D-Swansea)/Sen. Kwame Raoul (D-Chicago), is being promoted by the House & Senate Democrats as workers’ compensation reform. It is far from it. Codification of current bad case law for “causation” and “traveling employee” merely locks employers into the court-expanded liability. In addition, it prevents employers from being able to achieve a change in the case law from future courts. Senate amendment 2 offers some relief but is far outweighed by increased regulation and litigation that are contained in the measure. The Senate approved the bill on a 35-19-1vote. The House for concurrence vote on the Senate amendment was 64-51. Also approved by the Senate was HB 2622 (Fine/Biss). This measure uses employer and insurer tax dollars to capitalize the creation of a state established, mutual insurance company to compete with the over 300 insurers that already provide workers’ compensation coverage. The $10 million of startup money are tax dollars that currently go to run the operations of the Workers’ Compensation Commission. The legislation provides that the funds are a “loan” to be paid back with interest. Given the track record regarding finances of Illinois state government, it is difficult to believe the loan would be paid in a timely fashion. Furthermore, removing resources meant to support the operations of the Commission jeopardizes the entire adjudication of workers’ compensation for injured workers as well as employers. The Senate approval was 32-20-1 and sends the measure to the Governor. Sen. Sam McCann was the only Republican vote “yes”. Democrats Mike Hastings and Steve Landek voted “no”.


HB 2462 (Rep. Anna Moeller (D-Elgin)/Sen. Daniel Biss (D-Skokie) Equal Pay - Wage History: Prohibits an employer from: (i) screening job applicants based on their wage or salary history, (ii) requiring that an applicant's prior wages satisfy minimum or maximum criteria, and (iii) requesting or requiring as a condition of being interviewed or as a condition of continuing to be considered for an offer of employment that an applicant disclose prior wages or salary. Prohibits an employer from seeking the salary, including benefits or other compensation or salary history, of a job applicant from any current or former employer. 


In addition, the very concerning changes being made by HB 2462 are the undermining of employer defenses along with the expansion of civil penalties, including punitive damages and injunctive relief.  The question we ask is this legislation really about limiting what employers can ask of a job applicant or is the bill all about increasing litigation opportunities and judicial awards against employers? HB 2462 was approved by the Senate on a 35-18-1 vote.


SB1720 (Sen. Biss /Rep. Lisa Hernandez (D-Chicago) increases criminal penalties for violation of the Wage Payment & Collection Act. It also bars contractors for 5 years from bidding on any state procurement by a business violating certain Illinois employment laws, any comparable laws in other states or the federal FLSA. 


Measures Pending that the General Assembly Likely Will Take Up Later this Month:


SB1905 sponsored by Sen. Ira Silverstein (D-Chicago)/ Rep Creates the Collective Bargaining Freedom Act restricting local government units from addressing ways to regulate collective bargaining agreements


HB3539 sponsored by Rep. Mike Halpin (D-Milan/ Sen. Biss) requires state bidders to obtain an equal pay certificate before a purchasing agency may issue a contract to the bidder. The Department of Employment Security to issue the certificates, specifying information to be included in an application for an equal pay certificate. The CEO of the bidding organization must certify that the organization is in compliance with the Equal Pay Act of 2003, Equal Wage Act, Illinois Human Rights Act, and Title VII of the Civil Rights Act of 1964. 


HB2771 (Rep. C. Mitchell-D-Chicago/Sen. Hutchinson-D-Olympia Fields) Mandated Paid Leave: As amended, the bill will require employers to provide 40 hours of paid sick time to employees. An employee may earn sick days 120 days after beginning employment at the accrual rate of one hour of sick leave for every 40 hours worked. School districts, park districts, and certain City of Chicago sister agencies are exempt. The Department of Labor will administer the program. Individuals may file civil actions with respect to violations of the new Act. If an employer offers a personal time off (PTO) benefit the employer is not required to change its policy if the policy allows up to 40 hours of sick time. This provision however is not an exemption from the Act meaning that even with a PTO policy in place, an employer must comply with all other features of the Act.  The measure is on Concurrence in the House.


(ABC positions on legislation: Yellow-highlighted = neutral; red = opposed; green = support)

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