Governor Quinn has signed legislation into law that will effectively expand the Illinois Prevailing Wage Act (IPWA). The law takes effect on January 1, 2010. There is little doubt that after this law becomes effective, the Illinois Department of Labor (IDOL) will rely on these amendments to cast a wider enforcement net as to what it considers "prevailing wage" projects. Employers are advised to act now to become familiar with the Act's requirements and learn how to avoid violations.

Specifically, the amendment broadens the definition of "public works" to include all projects financed in whole or in part with bonds, grants, loans, or other funds made available by or through the State or any of its political subdivisions. On the surface, this change appears innocuous, seemingly adding very little to the Act as it exists today. However, when considering this amendment in light of other (failed) efforts to amend the IPWA it becomes evident that the underlying intent of this amendment is to apply prevailing wage requirements to privately funded projects that receive indirect public financial assistance, such as tax incentives.

Earlier in the term, the General Assembly introduced legislation that specifically included in the definition of "public works" projects located in enterprise zones, or tax increment financing (TIF) districts. The business community voiced strong opposition to this union-backed legislation and it ultimately died in the House. Unfortunately, the general language incorporated in the amendment that was signed into law might be enough to produce the same result (i.e. application of IPWA to private projects located in enterprise zones or indirectly assisted through tax increment financing).

In a separate amendment expanding the IPWA, the General Assembly made it clear that all demolition work is covered under the Act - even if the demolition does not lead to new construction.

Inasmuch as the General Assembly continues to respond to the interests of labor by expanding the IPWA, it is imperative that employers obtain a firm understanding of the Act's requirements before becoming subject to an IDOL investigation. Gaining an understanding of the IPWA will also help employers compete for public works projects, which, according to many of our clients, is helpful in this down economy.