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Six Questions and Answers Under the Illinois Employee Classification Act

Six Questions and Answers
Under the Illinois Employee Classification Act
(Formerly H.B. 1795 - Now Public Act Public Act 95-0026)

By
Nancy E. Joerg, Esq.
Senior Attorney and Shareholder
Wessels Sherman Joerg Liszka Laverty Seneczko P.C.
St. Charles, Illinois
(630) 377-1554
najoerg@wesselssherman.com
http://www.wesselssherman.com/

The Employee Classification Act (formerly House Bill 1795) is a frightening and radical Illinois law which went into effect January 1, 2008. It affects construction and construction-related companies (including trucking companies) who use independent contractors in construction and construction related jobs.

Under the Employee Classification Act, Illinois construction and construction related companies (including trucking companies which haul gravel or road building materials, landscape companies, etc.) can be severely penalized by the Illinois Department of Labor (IDOL) and other "interested parties" for misclassifying workers as independent contractors on construction related projects. The term "construction" is very liberally defined by the Act and includes all aspects of construction.

The following are some of the most common questions that I have received from construction-related companies including trucking on almost a daily basis:

  • 1) Question:We are a trucking company. How do I know if we are the kind of company that would be covered under the Illinois Employee Classification Act?

Answer: If the kind of hauling you do is construction-related, then your company would be covered under the Act. If you haul construction materials to and from the construction site - for example, road building materials - the independent contractors you use would be at issue under the Illinois Employee Classification Act.

  • 2) Question:Who can turn us in to the Illinois Department of Labor under the Illinois Employee Classification Act?

Answer: Any interested party. It could be a jealous competitor, a disgruntled employee, a dissatisfied independent contractor, a hostile Union, etc.-and they may be rewarded with a "bounty."

  • 3) Question:How do I know whether or not my independent contractors would be considered misclassified employees under the Illinois Employee Classification Act?

Answer: You really won't know until you are legally challenged, but for a rough idea, look at the two independent contractor tests in Section 10 of the Act. Take protective steps now to strengthen independent contractor status.

  • 4) Question:I have passed an Illinois Department of Employment Security (IDES) audit on the issue of the independent contractor status of various kinds of workers who provide services for our company. Does this mean that I am "bullet-proof" in the face of an audit or investigation under the Illinois Employee Classification Act?

Answer: No. Unfortunately, each Agency is an independent entity. Just because you have passed other legal challenges and audits on the independent contractor status of your workers does not mean that you have any level of protection whatsoever under the Illinois Employee Classification Act.

  • 5) When did this Act go into effect?

Answer: January 1, 2008.

  • 6) Question:Is it true there are both criminal and civil penalties under this new law?

Answer: Yes, and they can be severe.

Dramatic and dangerous times are here for Illinois construction and construction-related companies (including trucking companies) who use independent contractors. Be assured that we are here to help you do an emergency "self audit."

If you wish a free copy of the Illinois Employee Classification Act including the 12-part test, contact Legal Assistant Tammy Nelson at 630-377-1554 or tanelson@wesselssherman.com.

If you have any questions about the Illinois Employee Classification Act, contact Senior Attorney and Shareholder Nancy Joerg at 630-377-1554 or najoerg@wesselssherman.com.