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Merit Update Capitol News: May Edition

by Shattuck & Associates Consulting, Inc. 

Legislation Introduced to Fix Intimidation/Vandalism Loophole

In mid April ABCIL member, Drake Excavating & Construction, Inc., experienced serious damage to their heavy equipment including politically motivated vandalism at a jobsite in Bethalto, Illinois. Damages are estimated to be over $20,000. Illinois law has a loophole that may allow for property damage and harassment or intimidation of employees or employers when related to a labor dispute. ABCIL is working with Illinois legislators to clarify the law.

Amendment 1 to SB 995: Sen. Kyle McCarter (R-Lebanon) is sponsoring an amendment that clarifies Illinois law regarding exemptions of labor disputes from criminal stalking and workplace restraining orders. SB 995 specifically allows first amendment rights for lawful activities connected to a labor dispute but clarifies that harassment, intimidation, and property vandalism during a labor dispute are not lawful activities.

 

Illinois Jobs Climate Struggles and

General Assembly Action Looks to Dig a Deeper Hole 

 

While recent data and reports indicate that Illinoisans are fleeing our state (Internal Revenue Service migration data) and our economic performance and economic outlook is dismal (ALEC 2017 Rich States Poor States) this week the majority party in the Illinois House and Senate ignored these important trends and sent several new regulations and changes that will increase the cost of doing business in the State. Interestingly, several bills that passed the House actually are being held in that chamber due to the use of a parliamentary procedure. Below is a rundown of the legislation that passed this past week:

 

HB 2462 (Rep. Moeller-D-Elgin) 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. This measure passed on a 91-24 vote. Twenty-four House Republicans joined all 67 House Democrats to send this measure to the Senate. Rep. Norine Hammond (R-Macomb) offered an alternative proposal, HB 2094, that was supported by several business groups. The amendment was held by a tie vote in the House Economic Opportunity Committee.

 

Rep. Laura Fine (D-Glenview), sponsor of HB 2622, argued that a non-profit, taxpayer-capitalized, mutual insurance company will bring more competition to the over 300 carriers already providing WC coverage in our State. On a purely partisan vote (67-51), the bill passed the House. This legislation had a motion to reconsider the vote filed by Majority Leader Barbara Currie (D-Chicago). The bill remains in the House until the motion is removed or defeated.

 

Also advanced was HB 2525 sponsored by Rep. Jay Hoffman (D-Swansea). This is the same legislation that House Democrats passed during the previous General Assembly's lame duck session in January. We view the changes as a fake workers' compensation proposal. It 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. Like HB 2622, this measure also was approved on a partisan 66-50 roll call and a motion to reconsider the vote is pending preventing the bill from moving to the Senate.  

 

Regulated Health Insurance Premiums: HB 2624, sponsored by Rep. Fine, creates an independent quasi-judicial Health Insurance Rate Review Board to review and approve health insurance rates. The bill was approved on a partisan 65-49 vote. A motion to reconsider was filed on this bill.

 

HB 2771 (Rep. C. Mitchell-D-Chicago) Mandated Paid Leave: As amended, HB 2771 requires employers to provide 5 paid leave days to employees. An employee may earn the benefit 180 days after beginning employment at the accrual rate of one hour of sick leave for every 40 hours worked. School districts, park districts, certain City of Chicago sister agencies and unionized construction workers 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. The measure passed 66 to 51. Only Rep. Jerry Costello (D-Belleville) joined 50 republicans in voting against the bill.

 

HB 2802 (Rep. Theresa Mah-D-Chicago) Transportation Benefit: requires employers of 25 or more employees located in Regional Transit Area to provide  a program consistent with federal law that allows employees to elect to exclude from taxable wages and compensation the employee's commuting costs incurred for the purchase of a transit pass to use public transit or for the purchase of qualified parking, or a program under which the employer supplies a transit pass for the particular qualifying public transit requested by the covered employee or reimburses the covered employee for payments made for the use of qualified parking. This measure was approved 62-54. Rep. Costello, Rep. Hoffman, Rep. Davis Phelps (D-Eldorado) and Rep. Carol Sente (D-Vernon Hills) joined 50 Republicans in voting against the bill.

 

Also, sponsored by Rep. Fine, HB 2959 provides that no policy of individual or group accident and health insurance issued, amended, delivered, or renewed on or after the effective date of this amendatory Act may impose any preexisting condition exclusion with respect to that plan or coverage. Unfortunately, the legislation has no mechanism to spread the risk of pre-existing conditions and will drive premiums for health insurance in Illinois significantly higher. Also, the legislation does not require mandatory purchase of insurance thus allowing an individual to wait until they have an illness to purchase a policy. This measure was approved on a bipartisan vote of 75-33. A motion to reconsider the vote was filed on this measure. 

 

SB 1720 (Sen. Biss-D Evanston) increases criminal penalties for violation of the Wage Payment & Collection Act. 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. The measure passed on a partisan 30-22 vote. Sen. Steve Landek (D-Bridgeview) joined 21 Senate GOP members in voting against the bill.

 

SB 1905 (Silverstein) Creates the Collective Bargaining Freedom Act to prevent local government units to independently determine whether they have control over private collective bargaining. The hypocracy is that home rule local governments may affect minimum wage, sick leave benefits, etc. but will not be able to waive collective bargaining in their jurisdiction. Six Senate Republicans voted with 30 Senate Democrats sending the measure to the House, 36-15.

 

The House will be in session next returning to Springfield on May 9th. The Senate returns May 2nd.

 

Industry Issues:

HB 2664 (Rep. W. Davis) 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. Passed the House.

 

HB 3044 (Rep. Hoffman) Amends the Prevailing Wage Act, with Amendment 1, requires the Department of Labor to publish on its website the prevailing wage schedule for each county in the State, no later than August 15 of each year. Passed the House.

 

HB 3539 (Rep. Halpin) 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. Passed the House.

 

HB 3744 (Rep. Conyears/Sen. Hunters) 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. Passed the House Senate Assignments.

 

SB 263 (Sen. Clayborne/Rep. Currie) Amends the Department of Transportation Law of the Civil Administrative Code of Illinois, in conjunction with the Capital Development Board, requires the Department to hold 2 public hearings to determine if a more efficient, effective, and less burdensome method exists to prequalify an architect, engineer, or contractor. Requires the Department and other State Agencies, at the close of each construction season, to evaluate each contractor who performed work as a prime contractor or subcontractor and notify the contractor of the performance evaluation within 14 days of completion of the evaluation including a detailed explanation of any substandard items, if any. Amends the Criminal Code of 2012 to state 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. Passed the Senate. Arrived in House.

 

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 Third Reading.

 

SB 1513 (Sen. Lightford) 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. Postponed in Senate Commerce and Economic Development Committee.

 

SB 1682  (Sen. Sandoval) Creates the Fire Alarm Service Professional Licensing Act. Provides for the licensure of fire alarm contractors, installers, and technicians under the Department of Financial and Professional Regulation. Includes provisions concerning the powers and duties of the Department, licensing requirements, designated certified person requirements, and requirements for the installation, repair, inspection, and testing of fire alarm systems. Authorizes the Department to establish fees and continuing education requirements. Sets forth provisions for grounds for disciplinary action, criminal and civil penalties for violations of the Act, and administrative procedure. Provides that fines and fees collected under the Act shall be deposited into the Fire Prevention Fund. Preempts home rule powers. Amends the Criminal Code of 2012 and the Consumer Fraud and Deceptive Business Practices Act to make conforming changes. Postponed in Senate Licensed Activities and Pensions Committee

 

SB 1832 (Sen. Mulroe) 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.

 

Key Bills that Appear Dead for this Session:

 

Overtime Calculation: HB 2749 (Guzzardi) increases OT threshold to $47,476

 

Prevailing Wage held to CBA: HB 2495 (Hoffman) locked the prevailing wage to collective bargaining agreements in the area

 

Responsible Bidder Law: HB 2493 (Hoffman) required local governments to use the state responsible bidder provisions for Prevailing Wage projects

 

 

Governor Rauner’s Team at IDOL to Conduct Prevailing Wage Survey

 

In the near future, the Illinois Department of Labor will be mailing to all contractors a survey to calculate local prevailing wage rates. Under Governor Rauner’s efforts to bring greater competition to state and local prevailing wage projects, IDOL needs merit shop responses to bring a more accurate reflection of the prevailing wage. Your response to the survey are critical to leveling the playing field for merit shop contractors.

 

The responses will be used to calculate prevailing wage rates later this summer. IDOL is expected to report new wage rates by August 15th. The last rate change was made in July 2015.

 



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