Rep. Dan Reitz
Filed: 5/4/2004
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1 | AMENDMENT TO HOUSE BILL 4883
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2 | AMENDMENT NO. ______. Amend House Bill 4883, AS AMENDED, by | ||||||
3 | replacing everything after the enacting clause with the | ||||||
4 | following:
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5 | "Section 1. Short title. This Act may be cited as the | ||||||
6 | Truth in Employment
Act.
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7 | Section 3. Purpose. This Act is intended to address the | ||||||
8 | practice of misclassifying employees as independent | ||||||
9 | contractors. | ||||||
10 | Section 5. Definition. As used in this Act: | ||||||
11 | "Contractor" means any person
who, in any capacity other | ||||||
12 | than as the employee of another for wages as the
sole
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13 | compensation, undertakes to construct, alter, repair, move, | ||||||
14 | wreck, or demolish
any fixture or structure. "Contractor" | ||||||
15 | includes a general contractor and a subcontractor, but does not
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16 | include a person who furnishes only materials or supplies.
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17 | "Department" means the Department of Revenue.
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18 | Section 10. Filing by contractors. | ||||||
19 | (a) A contractor for whom a person is performing work on a | ||||||
20 | construction project and is classified as an independent | ||||||
21 | contractor with respect to that work must file with the | ||||||
22 | Department a statement regarding that person. The Department |
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1 | shall adopt rules concerning the form, contents, and filing of | ||||||
2 | the statement. The statement shall be available in English and | ||||||
3 | Spanish and shall include: the name and address of the | ||||||
4 | contractor and the person performing the work; the name and | ||||||
5 | address of the general contractor (if the general contractor is | ||||||
6 | not the contractor for whom the person is performing the work); | ||||||
7 | and any other information required by the Department. A | ||||||
8 | separate statement shall be filed by the contractor for each | ||||||
9 | calendar year during which the worker performs work for the | ||||||
10 | contractor. The statement shall be filed no later than the | ||||||
11 | first date of the calendar year on which the worker performs | ||||||
12 | work for the contractor. The information obtained by the | ||||||
13 | Department through the statement is confidential and shall be | ||||||
14 | used solely for the purposes of this Act. | ||||||
15 | (b) A contractor that is required to file a statement under | ||||||
16 | subsection (a) and does not timely file that statement shall | ||||||
17 | pay, when it files the statement, a $10 late-filing penalty to | ||||||
18 | the Department. | ||||||
19 | Section 15. Notice. | ||||||
20 | (a) The Department shall post a summary of the requirements | ||||||
21 | of this Act in English and Spanish on its web site and on | ||||||
22 | bulletin boards in each of its offices. | ||||||
23 | (b) A contractor for whom one or more persons classified as | ||||||
24 | independent contractors are performing work shall post and keep | ||||||
25 | posted, in conspicuous places on each job site where those | ||||||
26 | persons work and in each of its offices, a notice in English | ||||||
27 | and Spanish, prepared by the Department, summarizing the | ||||||
28 | requirements of this Act. The Department shall furnish copies | ||||||
29 | of summaries to contractors upon request without charge. | ||||||
30 | Section 20. Investigations. | ||||||
31 | (a) The Department shall commence an investigation if a | ||||||
32 | report is not timely filed under subsection (a) of Section 10 |
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1 | or if the Department finds, based on statements filed under | ||||||
2 | this Act or other information supplied to the Department or | ||||||
3 | otherwise obtained by the Department, that there is reason to | ||||||
4 | suspect that a contractor has misclassified one or more | ||||||
5 | employees as independent contractors. | ||||||
6 | (b) A final determination by the United States Internal | ||||||
7 | Revenue Service or a federal court that a person is an employee | ||||||
8 | is deemed correct for all purposes under this Act. | ||||||
9 | (c) The Department shall hire as many investigators as may | ||||||
10 | be necessary to carry out the purposes of this Act. | ||||||
11 | Section 25. Misclassification of employees as independent | ||||||
12 | contractors. | ||||||
13 | (a) If, upon completion of an investigation commenced | ||||||
14 | pursuant to subsection (a) of Section 20 of this Act,
the | ||||||
15 | Department determines that a contractor has misclassified one | ||||||
16 | or more employees as independent contractors on a construction
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17 | project, that contractor is subject to penalties and interest | ||||||
18 | as provided in
subsections (c) and (d) of Section 1002 of the | ||||||
19 | Illinois Income Tax Act.
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20 | (b) If, upon completion of an investigation commenced | ||||||
21 | pursuant to subsection (a) of Section 20 of this Act,
the | ||||||
22 | Department determines that a contractor has knowingly or | ||||||
23 | intentionally
misclassified one or more employees as | ||||||
24 | independent contractors on a construction
project, the | ||||||
25 | Department may: (i) direct the employer to cease its operations | ||||||
26 | on that project;
(ii) direct the employer to pay $200 to the | ||||||
27 | Department for each day during which the violation
continues; | ||||||
28 | (iii) direct the employer to pay $400 to the Department for | ||||||
29 | each day during which a second or subsequent violation
occurs | ||||||
30 | that involves different employees than those involved in an | ||||||
31 | earlier violation by that employer; and (iv) require the | ||||||
32 | employer to continue to pay, for 5 days, employees affected
by | ||||||
33 | the determination.
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1 | (c) A contractor that
knowingly or intentionally | ||||||
2 | misclassifies one or more of its employees as independent | ||||||
3 | contractors on a construction
project commits a Class C | ||||||
4 | misdemeanor. A contractor that
commits a second or subsequent | ||||||
5 | violation commits a Class 4 felony if the second or subsequent | ||||||
6 | violation involves different employees than those involved in | ||||||
7 | an earlier violation.
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8 | Section 30. Attorney General; State's Attorneys. Criminal | ||||||
9 | violations of this Act shall be prosecuted by the Attorney | ||||||
10 | General or the appropriate State's Attorney. The Department | ||||||
11 | shall refer matters to the Attorney General and the appropriate | ||||||
12 | State's Attorney upon determining that a criminal violation may | ||||||
13 | have occurred. | ||||||
14 | Section 35. Truth in Employment Fund. The Truth in | ||||||
15 | Employment Fund is created as a special fund in the State | ||||||
16 | treasury. All moneys received by the Department under this Act | ||||||
17 | shall be deposited into the Fund. Moneys in the Fund shall be | ||||||
18 | used, subject to appropriation by the General Assembly, by the | ||||||
19 | Department for administration, investigation, and other | ||||||
20 | expenses incurred in carrying out its powers and duties under | ||||||
21 | this Act. Any moneys in the Fund at the end of a fiscal year in | ||||||
22 | excess of a $1,000,000 reserve shall be transferred to the | ||||||
23 | General Revenue Fund. | ||||||
24 | Section 40. Rulemaking. In addition to any rulemaking | ||||||
25 | required by any other provision of this Act, the Department may | ||||||
26 | adopt reasonable rules to implement and administer this Act. | ||||||
27 | Section 45. Judicial review. A final administrative | ||||||
28 | decision
of the Department under this Act is subject to | ||||||
29 | judicial review under the Administrative Review Law.
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1 | Section 50. No waivers. | ||||||
2 | (a) There shall be no waiver of any provision of this Act. | ||||||
3 | (b) It is a Class C misdemeanor for a contractor to attempt | ||||||
4 | to induce any individual to waive any provision of this Act. | ||||||
5 | Section 85. The Department of Employment Security Law of | ||||||
6 | the
Civil Administrative Code of Illinois is amended by adding | ||||||
7 | Section 1005-160 as follows: | ||||||
8 | (20 ILCS 1005/1005-160 new)
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9 | Sec. 1005-160. Misclassification of employees as | ||||||
10 | independent contractors. The Department shall cooperate with | ||||||
11 | the Department of Revenue under the Truth in Employment
Act by | ||||||
12 | providing information to the Department of Revenue concerning | ||||||
13 | any
suspected misclassification by a contractor of one or more | ||||||
14 | of its employees as independent contractors.
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15 | Section 90. The State Finance Act is amended by adding | ||||||
16 | Section
5.625 as follows:
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17 | (30 ILCS 105/5.625 new)
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18 | Sec. 5.625. The Truth in Employment Fund.
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19 | Section 92. The Illinois Income Tax Act is amended by | ||||||
20 | changing Section 917 as follows:
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21 | (35 ILCS 5/917) (from Ch. 120, par. 9-917)
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22 | Sec. 917. Confidentiality and information sharing.
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23 | (a) Confidentiality.
Except as provided in this Section, | ||||||
24 | all information received by the Department
from returns filed | ||||||
25 | under this Act, or from any investigation conducted under
the | ||||||
26 | provisions of this Act, shall be confidential, except for | ||||||
27 | official purposes
within the Department or pursuant to official | ||||||
28 | procedures for collection
of any State tax or pursuant to an |
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1 | investigation or audit by the Illinois
State Scholarship | ||||||
2 | Commission of a delinquent student loan or monetary award
or | ||||||
3 | enforcement of any civil or criminal penalty or sanction
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4 | imposed by this Act or by another statute imposing a State tax, | ||||||
5 | and any
person who divulges any such information in any manner, | ||||||
6 | except for such
purposes and pursuant to order of the Director | ||||||
7 | or in accordance with a proper
judicial order, shall be guilty | ||||||
8 | of a Class A misdemeanor. However, the
provisions of this | ||||||
9 | paragraph are not applicable to information furnished
to a | ||||||
10 | licensed attorney representing the taxpayer where an appeal or | ||||||
11 | a protest
has been filed on behalf of the taxpayer.
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12 | (b) Public information. Nothing contained in this Act shall | ||||||
13 | prevent
the Director from publishing or making available to the | ||||||
14 | public the names
and addresses of persons filing returns under | ||||||
15 | this Act, or from publishing
or making available reasonable | ||||||
16 | statistics concerning the operation of the
tax wherein the | ||||||
17 | contents of returns are grouped into aggregates in such a
way | ||||||
18 | that the information contained in any individual return shall | ||||||
19 | not be
disclosed.
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20 | (c) Governmental agencies. The Director may make available | ||||||
21 | to the
Secretary of the Treasury of the United States or his | ||||||
22 | delegate, or the
proper officer or his delegate of any other | ||||||
23 | state imposing a tax upon or
measured by income, for | ||||||
24 | exclusively official purposes, information received
by the | ||||||
25 | Department in the administration of this Act, but such | ||||||
26 | permission
shall be granted only if the United States or such | ||||||
27 | other state, as the case
may be, grants the Department | ||||||
28 | substantially similar privileges. The Director
may exchange | ||||||
29 | information with the Illinois Department of Public Aid and the
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30 | Department of Human Services (acting as successor to the | ||||||
31 | Department of Public
Aid under the Department of Human Services | ||||||
32 | Act) for
the purpose of verifying sources and amounts of income | ||||||
33 | and for other purposes
directly connected with the | ||||||
34 | administration of this Act and the Illinois
Public Aid Code. |
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1 | The Director may exchange information with the Director of
the | ||||||
2 | Department of Employment Security for the purpose of verifying | ||||||
3 | sources
and amounts of income and for other purposes directly | ||||||
4 | connected with the
administration of this Act and Acts | ||||||
5 | administered by the Department of
Employment
Security.
The | ||||||
6 | Director may make available to the Illinois Industrial | ||||||
7 | Commission
information regarding employers for the purpose of | ||||||
8 | verifying the insurance
coverage required under the Workers' | ||||||
9 | Compensation Act and Workers'
Occupational Diseases Act.
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10 | The Director may make available to any State agency, | ||||||
11 | including the
Illinois Supreme Court, which licenses persons to | ||||||
12 | engage in any occupation,
information that a person licensed by | ||||||
13 | such agency has failed to file
returns under this Act or pay | ||||||
14 | the tax, penalty and interest shown therein,
or has failed to | ||||||
15 | pay any final assessment of tax, penalty or interest due
under | ||||||
16 | this Act.
The Director may make available to any State agency, | ||||||
17 | including the Illinois
Supreme
Court, information regarding | ||||||
18 | whether a bidder, contractor, or an affiliate of a
bidder or
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19 | contractor has failed to file returns under this Act or pay the | ||||||
20 | tax, penalty,
and interest
shown therein, or has failed to pay | ||||||
21 | any final assessment of tax, penalty, or
interest due
under | ||||||
22 | this Act, for the limited purpose of enforcing bidder and | ||||||
23 | contractor
certifications.
For purposes of this Section, the | ||||||
24 | term "affiliate" means any entity that (1)
directly,
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25 | indirectly, or constructively controls another entity, (2) is | ||||||
26 | directly,
indirectly, or
constructively controlled by another | ||||||
27 | entity, or (3) is subject to the control
of
a common
entity. | ||||||
28 | For purposes of this subsection (a), an entity controls another | ||||||
29 | entity
if
it owns,
directly or individually, more than 10% of | ||||||
30 | the voting securities of that
entity.
As used in
this | ||||||
31 | subsection (a), the term "voting security" means a security | ||||||
32 | that (1)
confers upon the
holder the right to vote for the | ||||||
33 | election of members of the board of directors
or similar
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34 | governing body of the business or (2) is convertible into, or |
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1 | entitles the
holder to receive
upon its exercise, a security | ||||||
2 | that confers such a right to vote. A general
partnership
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3 | interest is a voting security.
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4 | The Director may make available to any State agency, | ||||||
5 | including the
Illinois
Supreme Court, units of local | ||||||
6 | government, and school districts, information
regarding
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7 | whether a bidder or contractor is an affiliate of a person who | ||||||
8 | is not
collecting
and
remitting Illinois Use taxes, for the | ||||||
9 | limited purpose of enforcing bidder and
contractor
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10 | certifications.
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11 | The Director may make any information concerning a criminal | ||||||
12 | violation that may have occurred under the Truth in Employment
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13 | Act available to the Attorney General or the appropriate | ||||||
14 | State's Attorney
when the Department refers a matter under | ||||||
15 | Section 30 of the Truth in Employment
Act.
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16 | The Director may also make available to the Secretary of | ||||||
17 | State
information that a corporation which has been issued a | ||||||
18 | certificate of
incorporation by the Secretary of State has | ||||||
19 | failed to file returns under
this Act or pay the tax, penalty | ||||||
20 | and interest shown therein, or has failed
to pay any final | ||||||
21 | assessment of tax, penalty or interest due under this Act.
An | ||||||
22 | assessment is final when all proceedings in court for
review of | ||||||
23 | such assessment have terminated or the time for the taking
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24 | thereof has expired without such proceedings being instituted. | ||||||
25 | For
taxable years ending on or after December 31, 1987, the | ||||||
26 | Director may make
available to the Director or principal | ||||||
27 | officer of any Department of the
State of Illinois, information | ||||||
28 | that a person employed by such Department
has failed to file | ||||||
29 | returns under this Act or pay the tax, penalty and
interest | ||||||
30 | shown therein. For purposes of this paragraph, the word
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31 | "Department" shall have the same meaning as provided in Section | ||||||
32 | 3 of the
State Employees Group Insurance Act of 1971.
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33 | (d) The Director shall make available for public
inspection | ||||||
34 | in the Department's principal office and for publication, at |
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1 | cost,
administrative decisions issued on or after January
1, | ||||||
2 | 1995. These decisions are to be made available in a manner so | ||||||
3 | that the
following
taxpayer information is not disclosed:
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4 | (1) The names, addresses, and identification numbers | ||||||
5 | of the taxpayer,
related entities, and employees.
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6 | (2) At the sole discretion of the Director, trade | ||||||
7 | secrets
or other confidential information identified as | ||||||
8 | such by the taxpayer, no later
than 30 days after receipt | ||||||
9 | of an administrative decision, by such means as the
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10 | Department shall provide by rule.
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11 | The Director shall determine the
appropriate extent of the
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12 | deletions allowed in paragraph (2). In the event the taxpayer | ||||||
13 | does not submit
deletions,
the Director shall make only the | ||||||
14 | deletions specified in paragraph (1).
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15 | The Director shall make available for public inspection and | ||||||
16 | publication an
administrative decision within 180 days after | ||||||
17 | the issuance of the
administrative
decision. The term | ||||||
18 | "administrative decision" has the same meaning as defined in
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19 | Section 3-101 of Article III of the Code of Civil Procedure. | ||||||
20 | Costs collected
under this Section shall be paid into the Tax | ||||||
21 | Compliance and Administration
Fund.
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22 | (e) Nothing contained in this Act shall prevent the | ||||||
23 | Director from
divulging
information to any person pursuant to a | ||||||
24 | request or authorization made by the
taxpayer, by an authorized | ||||||
25 | representative of the taxpayer, or, in the case of
information | ||||||
26 | related to a joint return, by the spouse filing the joint | ||||||
27 | return
with the taxpayer.
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28 | (Source: P.A. 93-25, eff. 6-20-03.)
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29 | Section 95. The Workers' Compensation Act is amended by | ||||||
30 | adding Section
26.1 as follows:
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31 | (820 ILCS 305/26.1 new)
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32 | Sec. 26.1. Misclassification of employees as independent |
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1 | contractors. The Commission shall cooperate with the | ||||||
2 | Department of Revenue under the Truth in Employment
Act by | ||||||
3 | providing information to the Department of Revenue concerning | ||||||
4 | any
suspected misclassification by a contractor of one or more | ||||||
5 | of its employees as independent contractors.
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6 | Section 97. Severability. The provisions of this Act are | ||||||
7 | severable under Section 1.31 of the Statute on Statutes.".
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