Illinois Employee Classification Act of 2008
Misclassifying Employees As Independent Contractors by Employers in Construction, Trucking, Landscaping and Related Trades
Illinois Employee Classification Act - In General
As of January 01, 2008, the way an individual is classified in the construction industry in Illinois will have significant consequences for employer/contractors. The purpose of the Illinois Employee Classification Act is "to address the practice of misclassifying employees as independent contractors." 820 ILCS 185/3. The misclassification of an individual as an independent contractor in the construction industry could result in civil and criminal penalties being levied against the hiring employer/contractor.
Illinois Employee Classification Act - Who and What is Covered
Entities that are covered under the new law include sole proprietors, partnerships, firms, corporations, limited liability companies, associations, and other legal entities recognized to engage in business in Illinois. The Act does not limit the definition of "construction" to building residential and commercial property. The expansive definition of "construction" includes constructing, altering, reconstructing, repairing, rehabilitating, refinishing, refurbishing, remodeling, remediating, renovating, custom fabricating, maintenance, landscaping, improving, wrecking, painting, decorating, demolishing, and adding to or subtracting of any building, structure, roadway, railroad, street, bridge, alley, sewer, ditch, sewage disposal plant, water works, parking facility, railroad or excavation.
Illinois Employee Classification Act - Posted Notice Requirement for Employers
If the contractor classifies individuals as independent contractors, it must keep posted a notice in English, Spanish and Polish prepared by the Illinois Department of Labor which summarizes the requirements of the Illinois Employee Classification Act. The notices most be posted at the locations where the individuals are performing their services. The notices my be placed in conspicuous locations. The employer/contractor must also keep records for its job contracts (regardless if the individuals are classified as employees, independent contractors, sole proprietors, or partnerships) for a period of five years.
Illinois Employee Classification Act - Illinois Department of Labor Complaints
An Individual who has a reasonable belief that he has been misclassified as an independent contractor may file a complaint with the Illinois Department of Labor. "Interested Persons" (an individual not necessarily misclassified) may also file a complaint if they are aware of misclassification. The complaint must be filed within 180 days from the date of the alleged violation.
Illinois Employee Classification Act - Illinois Department of Labor Investigation
The investigator for the Illinois Department of Labor may visit and inspect, during any reasonable time, any location covered by the Illinois Employee Classification Act. During the visit and inspection, the investigator all documents that would lead to a determination of whether the Illinois Employee Classification Act has been violated. The Department of Labor will also hold a fact-finding conference to obtain additional information from the parties.
Illinois Employee Classification Act-Penalties and Criminal Charges For Violations
If the Illinois Department of Labor determines that a violation has occurred, it can order the contractor to cease and desist from further violations of Illinois Employee Classification Act, take action to eliminate the effect of the violation, collect any salary, wage, or other employment benefit denied or lost by the individual, and assess civil penalties. The Illinois Department of Labor may also refer the matter to the Illinois Attorney General and the State's Attorney who may pursue criminal penalties. An employer/contractor commits a Class C misdemeanor if it willfully violates the Illinois Employee Classification Act. Multiple violations would also prohibit the contractor from holding contracts with the State of Illinois. If the subsequent violation is within the five years of the first violation, the employer/contract has committed a Class 4 felony.
Illinois Employee Classification Act - Non Retaliation Clause
The Illinois Employee Classification Act also prohibits retaliation by the contractor for complaints to the contractor, a co-worker, a community organization, or a state or federal agency, for initiating proceedings of any kind under this Act, or for testifying in an investigation or proceeding under this Act.
Illinois Employee Classification Act - Independent Contractor Suit For Damages
An individual who has been misclassified may also bring a cause of action in the Illinois Circuit Court even if they do not exhaust their administrative remedies. In those situations, the individual may recover any salary, wage, or other employment benefit denied or lost, compensatory damages, legal and equitable relief in cases of retaliation, and attorney's fees and costs.
Illinois Employee Classification Act - Attorney Representation
At our experienced labor and employment lawyers represent both individuals and employers/contractors in litigation or investigation under the Illinois Employee Classification Act in Chicago and other parts of Illinois. We would also gladly meet with both individuals and employers/contractors to provide legal advise on how to avoid litigation as a result of this new law.