Practice Areas

Effective Independent Contractor Agreements

Effective Independent Contractor Agreements Under the Illinois Employee Classification Act

By Nancy E. Joerg

Illinois construction companies; construction-related businesses such as landscaping, painting, welding, etc., and trucking companies that pick up and deliver to construction sites, haul road building materials, etc. are all very nervous about the harsh new law, the Illinois Employee Classification Act (ECA) which went into effect January 1, 2008.

Now is the time in which Illinois construction companies and construction-related companies should be reviewing their independent contractor relationships, agreements and practices. Independent contractor agreements must be carefully drafted to be consistent with this very tough new law and any other independent contractor laws from other Agencies.

Section 10 of the ECA defines when a worker in a construction or construction-related field, or a truck driver who has a connection to construction, is an independent contractor and when he or she is an employee. If a construction worker or truck driver is found to be misclassified as an independent contractor under this new law, severe penalties can be leviedagainst the employer that has misclassified the worker. Therefore, it is important to do everything possible to comply with the ECA's strict, rigid, and punitive provisions.

Employers: if there is anything in your independent contractor agreement that conflicts with any of the factors of Section 10 of the Illinois Employee Classification Act, consider changing your independent contractor agreement and, if necessary, the way you interact with your independent contractors on an ongoing basis.

For example, Section 10 states that the alleged independent contractor must obtain and pay for all licenses and permits. The words of your independent contractor agreement should be consistent with that factor. Additionally, the way you actually operate with the independent contractor should be consistent with that factor.

This is the period in Illinois history when it is particularly important for construction and construction-related companies to carefully evaluate all independent contractor relationships, contracts, and practices.

Questions? If you have any questions about the Illinois Employee Classification Act or you if you would like to have an independent contractor agreement drafted or reviewed, contact Senior Attorney and Shareholder Nancy Joerg at (630) 377-1554 or najoerg@wesselssherman.com.