By: Jon D. Hoag, Esq.
The Illinois Prevailing Wage Act has long required public bodies to give notice to potential contractors that a particular project requires the contractor to pay the prevailing wage. In turn, contractors have been required to inform sub-contractors that the project for which they are bidding work is a "public works" project and requires payment at the prevailing wage.
So what happens when the public body or contractor fails to give proper notice of the prevailing wage requirement? The Illinois Department of Labor's enforcement stance has long been that lack of notice is no defense to the prevailing wage violations. While the Department entertains requests to remove the interest, penalties and fines associated with the assessment, the Department generally advises the contractors to recover directly from the entity that failed to provide proper notice. Remarkably, the Department has maintained this position notwithstanding that the Court in Brandt Const. Co. v. Ludwig specifically ruled that penalties and interest should not be assessed against a party that did not receive notice of the Act's requirements. Moreover, the Department's position places contractors in the unpleasant position of seeking damages from the contractor or public body that awarded the work.
The recent passage of HB 163 will finally force the Department to follow the directives in the Brandt case. That is, the public body or contractor that fails to provide notice of prevailing wage requirements will bear the financial responsibility for the fines and penalties set forth in the Act. Therefore, contractors of public works projects must be certain to include the prevailing wage requirements in bid specifications or provide separate written notice of the requirement to pay prevailing wage. Failure to follow this simple administrative step could prove costly!
Do you need sample notice language related to the Illinois Prevailing Wage Act? Please contact Attorney Jon D. Hoag in our St. Charles office at (630) 377-1554, or johoag@wesselssherman.com.
