Practice Areas

Strict Posting And Record Keeping Requirements Under The Illinois Employee Classification Act

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
www.wesselssherman.com

In January 2008, the Illinois Department of Labor published its "Proposed Rules" for the Illinois Employee Classification Act. Under this law, a company such as a construction company, a trucking company which hauls gravel or road building materials, a landscape company, and a wide variety of other construction related companies, can be challenged by the Illinois Department of Labor (IDOL) and "interested parties" on how the company classifies workers as either employees or independent contractors.

There was a "public comment" period which gave "the public" a chance to be heard on how it feels regarding the Proposed Rules for the Illinois Employee Classification Act. The public comment period expired on February 25, 2008.

This article will discuss two key issues: 1) record keeping requirements, and 2) the posting requirements.

RECORD KEEPING REQUIREMENTS:

There are strict record keeping requirements in the Proposed Rules to the Illinois Employee Classification Act. You must keep the documents specified in the Rules, on each construction-related independent contractor, for a period of FIVE years.

For example, if your were audited by the Illinois Department of Labor in 2015, the IDOL would require you to have records [as described below] on each construction-related independent contractor that you used for the past five years.

Records that must be maintained for each construction-related independent contractor include, but are not limited to:

1) their names, addresses, phone numbers, Social Security numbers, Individual Tax Identification Numbers and Federal Employer Identification Numbers;

2) the type of work performed and the total number of days and hours worked;

3) the method, frequency and basis on which wages were paid or payments were made;

4) all invoices, billing statements or other payment records, including the dates of payments, and any miscellaneous income paid or deductions made;

5) copies of all contracts, agreements, applications and policy or employment manuals; AND

6) any federal and State tax documents or other information the Illinois Department of Labor deems relevant or necessary.

Beware: If you violate the record keeping requirements, you violate the Illinois Employee Classification Act!

POSTING REQUIREMENTS:

The Illinois Employee Classification Act requires you to post the IDOL's Notice about the Illinois Employee Classification Act (in English, Spanish, and Polish) in your workplace and at every worksite. Where it is not practicable to post a notice on the job site, you must give a copy of the Notice to each construction-related independent contractor.

TIP: Give each of your independent contractors who are construction-related a copy of the Notice for them to keep, and have them sign and date another copy for you to keep in each independent contractor's file to prove that the independent contractor received the Notice. Do this on a yearly basis.

Beware: If you violate the posting requirements, you violate the Illinois Employee Classification Act!

When a construction related company who uses independent contractors is found in violation of the Employee Classification Act, the company could be hit with substantial financial penalties, possible shut down of its business or job sites, and, most worrying to many, misdemeanor or felony criminal charges.

FREE INFORMATION: Readers can contact Legal Assistant Tammy Nelson at 630-377-1554 or tanelson@wesselssherman.com for a free copy of the Illinois Employee Classification Act, the Proposed Rules, and the required Poster. Please also visit our website at  www.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.