HB4883eng 93RD GENERAL ASSEMBLY

HB4883 Engrossed LRB093 20882 WGH 46835 b

AN ACT concerning employment.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Truth in Employment Act.

Section 3. Purpose. This Act is intended to address the practice of misclassifying employees as independent contractors.

Section 5. Definition. As used in this Act, "contractor" means any person who, in any capacity other than as the employee of another for wages as the sole compensation, undertakes to construct, alter, repair, move, wreck, or demolish any fixture or structure. "Contractor" includes a subcontractor, but does not include a person who furnishes only materials or supplies.

Section 10. Filing by contractors.

(a) A contractor for whom a person is performing work and is classified as an independent contractor with respect to that work must file with the Department of Revenue a statement regarding that person, together with a $5 filing fee. The Department of Revenue shall adopt rules concerning the form, contents, and filing of the statement. The statement shall include: the name and address of the contractor and the person performing the work; the name and address of the general contractor (if the general contractor is not the contractor for whom the person is performing the work); and any other information required by the Department of Revenue. A separate statement shall be filed by the contractor for each calendar year during which the worker performs work for the contractor. The statement shall be filed no later than the first date of the calendar year on which the worker performs work for the contractor.

(b) A contractor that is required to file a statement under subsection (a) and does not file the statement as required under subsection (a) shall pay a $10 penalty in addition to the $5 filing fee.

Section 15. Notice.

(a) The Department of Revenue, the Department of Employment Security, and the Industrial Commission shall post a summary of the requirements of this Act on their web sites.

(b) The Department of Revenue shall post a summary of the requirements of this Act on bulletin boards in each office of the Department.

(c) A contractor for whom one or more persons classified as independent contractors are performing work shall post and keep posted, in conspicuous places on each job site where those persons work and in each of its offices, a notice, prepared by the Department of Revenue, summarizing the requirements of this Act. The Department of Revenue shall furnish copies of summaries to contractors upon request without charge.

Section 20. Investigations.

(a) The Department of Revenue shall commence an investigation if it finds, based on statements filed under this Act or other information supplied to the Department or otherwise obtained by the Department, that there is reason to suspect that a contractor has misclassified one or more employees as independent contractors.

(b) The Department of Revenue shall hire as many investigators as may be necessary to carry out the purposes of this Act.

Section 25. Misclassification of employees as independent contractors.

(a) If a contractor is a successful bidder for a construction project and knowingly or intentionally misclassifies one or more of its employees as independent contractors, the contractor is liable to an unsuccessful bidder, or an entity contracting with an unsuccessful bidder (including, but not limited to, a labor organization), for damages suffered by the unsuccessful bidder or entity as a result of the unsuccessful bidder's competitive bid for the construction project not being accepted due to the successful bidder's knowing or intentional misclassification of its employees as independent contractors.

(b) If, upon completion of an investigation commenced pursuant to subsection (a) of Section 20 of this Act, the Department of Revenue determines that a contractor has knowingly or intentionally misclassified one or more of its employees as independent contractors on a construction project:

(1) the Department may: (i) direct the employer to cease its operations; (ii) direct the employer to pay $250 for each day during which the violation continues; (iii) direct the employer to pay $500 for each day during which a second or subsequent violation occurs that involves different employees than those involved in an earlier violation by that employer; and (iv) require the employer to continue to pay, for 10 days, employees affected by the determination;

(2) no licenses or permits of any kind may be issued to the employer by any State agency or officer or any unit of local government nor may any such licenses or permits be renewed by any State agency or officer or any unit of local government until the Department determines that an employer has cured the misclassification; and

(3) no State agency or officer may enter into any contracts with the employer until 2 years have elapsed since the Department has determined that an employer has cured the misclassification.

(c) A contractor that knowingly or intentionally misclassifies one or more of its employees as independent contractors on a construction project commits a Class C misdemeanor. A contractor that commits a second or subsequent violation commits a Class 4 felony if the second or subsequent violation involves different employees than those involved in an earlier violation.

Section 30. Attorney General; State's Attorneys. Criminal violations of this Act shall be prosecuted by the Attorney General or the appropriate State's Attorney. The Department of Revenue shall refer matters to the Attorney General and the appropriate State's Attorney upon determining that a criminal violation may have occurred.

Section 35. Truth in Employment Fund. The Truth in Employment Fund is created as a special fund in the State treasury. All fees and penalties received by the Department of Revenue under this Act shall be deposited into the Fund. Moneys in the Fund shall be used, subject to appropriation by the General Assembly, by the Department of Revenue for administration, investigation, and other expenses incurred in carrying out its powers and duties under this Act. Any moneys in the Fund at the end of a fiscal year in excess of a $1,000,000 reserve shall be transferred to the General Revenue Fund.

Section 40. Rulemaking. In addition to any rulemaking required by any other provision of this Act, the Department of Revenue may adopt reasonable rules to implement and administer this Act.

Section 45. Judicial review. A final administrative decision of the Department of Revenue under this Act is subject to judicial review under the Administrative Review Law.

Section 50. No waivers.

(a) There shall be no waiver of any provision of this Act.

(b) It is a Class C misdemeanor for a contractor to attempt to induce any individual to waive any provision of this Act.

Section 85. The Department of Employment Security Law of the Civil Administrative Code of Illinois is amended by adding Section 1005-160 as follows:

(20 ILCS 1005/1005-160 new)

Sec. 1005-160. Misclassification of employees as independent contractors. The Department shall cooperate with the Department of Revenue under the Truth in Employment Act by providing information to the Department of Revenue concerning any suspected misclassification by a contractor of one or more of its employees as independent contractors.

Section 90. The State Finance Act is amended by adding Section 5.625 as follows:

(30 ILCS 105/5.625 new)

Sec. 5.625. The Truth in Employment Fund.

Section 95. The Workers' Compensation Act is amended by adding Section 26.1 as follows:

(820 ILCS 305/26.1 new)

Sec. 26.1. Misclassification of employees as independent contractors. The Commission shall cooperate with the Department of Revenue under the Truth in Employment Act by providing information to the Department of Revenue concerning any suspected misclassification by a contractor of one or more of its employees as independent contractors.

Section 97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.