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Merit Update Capitol News: April Edition

by Shattuck & Associates Consulting, Inc. 

A Wave of Anti-Business Measures Advancing in General Assembly

According to the Bureau of Labor Statistics, ten years ago Illinois had 350,000 more people working than in Indiana and Wisconsin combined, but today Indiana and Wisconsin combined are putting more people to work. Illinois’ workforce has been slow to recover from the Great Recession. There are still 170,000 less people working in Illinois now compared to before the Great Recession.

Anyone looking at these numbers would wonder why, in the same geographical area, two states have grown while the other hasn’t even reached its previous job numbers before the recession. Recently, Indiana has reformed government unions, frozen property taxes, stabled workers’ compensation costs, enacted Right-to-Work, managed pension costs, and lowered taxes. Similarly, Wisconsin has reformed government unions, cut income and property taxes, enacted Right-to-Work, managed pension costs, and created a pathway for balanced budgets and lower taxes in the future. One would think Illinois would look to its successful neighbors to find ways to put its citizens back to work.  However, some legislators have a different vision of Illinois and believe there is even a problem. In Springfield, many still believe the main reason people leave the State is for retirement to warmer weather even though the largest demographic leaving are in their prime work years, ages 25 to 54. Furthermore, the denial of a problem is in the details of the legislation being advanced. The following proposals will further hurt job growth in Illinois. All are democrat sponsors.


HB 2493 (Rep. Hoffman-D-Swansea) Prevailing Wage Responsible Bidder: requires all local governments to adhere to the state’s responsible bidder requirements, including participation in a USDOL certified apprenticeship program for each trade engaged on a prevailing wage project. Requires contractors and subcontractors to report the hours worked by minorities and females. House Second Reading. ABC OPPOSES


HB 2495 (Rep. Hoffman) Prevailing Wage Must Use CBAs: provides that the prevailing wage shall not be less than the rate that prevails for similar work performed under collective bargaining agreements in the locality provided that the agreements cover at least 30% of the workers. Provides that, if bargaining agreements do not exist in the locality, the Department of Labor shall ascertain the prevailing wage to be paid under the Act. Applies to public works performed without a written contract. Requires that the Department publish prevailing wages schedules on its website. This is identical to legislation vetoed last year by Gov. Rauner. House Second Reading. ABC OPPOSES


HB 198 House Floor Amendment 1 (Rep. Guzzardi-D-Chicago) Minimum Wage Increase: As amended, increases the minimum wage 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 employers with 50 or fewer employees, it creates a credit against the withholding tax liability, calculated based on the increase in the minimum wage. Scheduled hearing for House Floor Amendment 1: House Labor & Commerce Committee, Wed. April 5 10AM. ABC OPPOSES


HB 2771 (Rep. C. Mitchell-D-Chicago) and SB 1296 (Sen. Hutchinson-D-Olympia Fields) Mandated Paid Leave: As amended, both bills require employers to provide 5 sick days 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. This bill does not apply if the employer already provides 5 or more days of paid leave. HB 2771 is on House Second Reading. SB 1296 is on Senate Third Reading. ABC OPPOSES

HB 2525 (Rep. Hoffman) Fake Workers’ Compensation Proposal: Same legislation from the 99th General Assembly…  codifies bad case law for the definitions of “in the course of employment” and “arising out of the employment” maintaining the “any” cause standard and factors for determining traveling employee status; requires prior approval workers’ compensation rates by DOI; more reporting to IWCC and DOI for self-insurers; creates the WC Premium Rates Task Force; adds a new electronic billing penalty and new penalties for delay of authorization of medical care; returns the shoulder to part of the arm and the hip as part of the leg; and allows AMA guideline submission for impairment rating for PPD benefits. House Second Reading. ABC OPPOSES


HB 2749 (Rep. Guzzardi) Overtime Exemption Threshold: Amends the Minimum Wage Law to increase the overtime requirement threshold to $47,476 and annually increases it by the US CPI, meaning any employees earning salaries less than this amount will have to document their overtime hours and be compensated for their overtime hours. House Second Reading. ABC OPPOSES

HB 2462 (Rep. Moeller-D-Elgin) and SB 981 (Sen. Biss-D-Evanston) 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. Limits defenses. Provides for civil penalties, including punitive damages and injunctive relief. HB 2462 is on House Third Reading. SB 981 is on Senate Second Reading. ABC OPPOSES


Industry Issues:


HB 2664 (Rep. W. Davis-D-Hazel Crest) Amends the State Prompt Payment Act. Provides that if a contractor is assessed liquidated damages by the State, the contractor is still responsible to each subcontractor under the subcontracts. For contracts with the Department of Transportation, provides that if a contractor is assessed a liquidated damages penalty equal to or exceeding the total amount of the contract and the contractor is unable to pay its subcontractors, the Department of Transportation shall verify completion of the work performed by the subcontractor and, upon successful verification, pay the subcontractor the amount owed on the subcontract with the contractor. House Second Reading.


HB 3044 (Rep. Hoffman) Amends the Prevailing Wage Act. Requires the Department of Labor to publish, by July 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. House Second Reading. ABC OPPOSES


HB 3539 (Rep. Halpin-D-Milan) Amends the Illinois Procurement Code. Requires bidders to obtain an equal pay certificate before a purchasing agency may issue a contract to the bidder. Provides for the Department of Employment Security to issue the certificates. Specifies information to be included in an application for an equal pay certificate. Requires bidders to comply with the Equal Pay Act of 2003, Equal Wage Act, Illinois Human Rights Act, and Title VII of the Civil Rights Act of 1964. Amends the State Finance Act to create the Equal Pay Certificate Fund. Provides for moneys in the Fund to be used to administer the equal pay certificate requirements. House Second Reading. ABC OPPOSES


HB 3744 (Rep. Conyears-D-Chicago) Amends the Illinois Procurement Code. Provides that for any project under a construction contract, the contract shall require that, to the extent practicable, at least 10% of man-hours performing construction services be performed by individuals who reside in areas of poverty. Requires the Department of Central Management Services to annually release a list of areas of poverty that meet the requirements. House Third Reading.


SB 1347 (Sen. Biss) Creates the Living Wage Act. Provides that the State, its agencies, and political subdivisions shall ensure that new contracts and subcontracts include a provision specifying that, as a condition of payment of the contract, the minimum wage to be paid to workers in performance of the contract or subcontract shall be at least $16.36 per hour for new contracts created after January 1, 2018. Provides that for every year thereafter, the Department of Labor shall adjust the amount of the hourly minimum wage by the annual percentage increase in the consumer price index. Sets forth provisions concerning enforcement and penalties. Creates a private right of action to enforce the provisions of the Act. Provides for debarment of certain contractors or subcontractors for violation of the Act. Contains severability provisions. Effective January 1, 2018. Senate Second Reading. ABC OPPOSES


SB 1513 (Sen. Lightford-D-Chicago) 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. Sets forth certain requirements. Sets forth enforcement provisions. Prohibits adverse action for following the requirements of the Act. Limits the concurrent exercise of home rule powers. Provides that the Act does not apply to written or oral contracts entered into, modified, renewed, or extended before the effective date of the Act. Effective immediately. Scheduled hearing: Senate Commerce and Economic Development Committee April 6th 9AM.


SB 1720 (Sen. Biss) Prohibits any person or business that violates the Illinois Wage Payment and Collection Act, the Minimum Wage Law, the Illinois Worker Adjustment and Retraining Notification Act, the Employee Classification Act, the Day and Temporary Labor Services Act, the Fair Labor Standards Act of 1938, or any comparable state statute or regulation of any state which governs the payment of wages to do business with the State or any State agency or enter into a subcontract that is subject to the Code for a period of 5 years. Amends the Illinois Wage Payment and Collection Act. Amends the Illinois Wage Payment and Collection Act. Provides that an employer that is able to pay wages and who refuses to pay is guilty of a Class 4 felony with respect to amounts of $5,000 or less (rather than a Class B misdemeanor) and of a Class 3 felony with respect to amounts greater than $5,000 (rather than a Class A misdemeanor). Provides that a subsequent failure to pay within 5 years (rather than 2 years) of a prior conviction is a Class 3 felony (rather than a Class 4 felony). Senate Second Reading. ABC OPPOSES


SB 1832 (Sen. Mulroe-D-Chicago) Amends the Mechanics Lien Act. 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. Senate Second Reading.


SB 1905 (Sen. Silverstein-D-Chicago) Creates the Collective Bargaining Freedom Act. Provides that it is the policy of the State that employers, employees, and their labor organizations are free to bargain collectively. Provides that the authority to enact laws or rules that restrict the use of union security agreements between an employer and a labor organization vests exclusively with the General Assembly. Prohibits local governments from enforcing any such law or rule. Defines terms. Effective immediately. Senate Second Reading. ABC OPPOSES

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