Lots of people
Public Act 095-0026, the Illinois Employee Classification Act (formerly House Bill 1795) will become effective on January 1, 2008. It carries severe penalties that could affect you and your construction or trucking business. Please read this letter carefully.
There are many important steps for you to take prior to January 1, 2008 in order to protect yourself, your business, and your independent contractor relationships.
As you know, Wessels Sherman Bailey Joerg Liszka Laverty Risch P.C. does not often send out emergency mailings such as this. Rather, we announce important developments in our monthly Client Alert newsletter. However, because we are extremely concerned about how this bizarre and aggressive new law (the Illinois Employee Classification Act; HB 1795) will impact our Illinois clients (who are in construction and construction-related fields including trucking, and also use independent contractors), we have decided this emergency mailing is a must.
January 1, 2008 is the day that this harsh new law (which was hotly contested by many Illinois business groups) comes into effect. This new law brings with it severe penalties (civil and criminal!) for companies who are deemed to be misclassifying their workers as independent contractors. The Illinois Department of Labor is the Agency overseeing the enforcement of this new law.
Under the Illinois Employee Classification Act, unions or any other interested parties - hostile competitors, disgruntled employees, and literally anyone - can "turn in" a construction or construction-related company using independent contractors. There is even a finder's fee of 10?f all monies collected (because of the supposed misclassification of the independent contractors) which will go to the interested party who turned in the construction or construction-related company! Not surprisingly, the AFL-CIO and Teamsters strongly supported the passage of this terrible new law. Unions will undoubtedly use this law to their greatest advantage when targeting non-union companies for organizing.
Additionally, the Illinois Department of Labor will be responsible for investigating this law on behalf of the State. It is believed that the IDOL's prevailing wage unit will be assigned the task of investigating contractors under this new law on both public and private worksites. The new law also requires that the Illinois Department of Labor, the Illinois Department of Employment Security, the Illinois Department of Revenue, the Office of the State Comptroller, and the Illinois Workers' Compensation Commission cooperate with one another by sharing information concerning the suspected misclassification of workers as independent contractors.
To give you an idea of the broad scope of this new law, "Section 5 - Definitions" defines "construction" as follows, in order to catch many different kinds of businesses, including trucking, in a big net!:
Any constructing, altering, reconstructing, repairing, rehabilitating, refinishing, refurbishing, remodeling, remediating, renovating, custom fabricating, maintenance, landscaping, improving, wrecking, painting, decorating, demolishing, and adding to or subtracting from any building, structure, highway, roadway, street, bridge, alley, sewer, ditch, sewage disposal plant, water works, parking facility, railroad, excavation or other structure, project, development, real property or improvement, or to do any part thereof, whether or not the performance of the work herein described involves the addition to, or fabrication into, any structure, project, development, real property or improvement herein described of any material or article of merchandise. Construction shall also include moving construction related materials on the job site to or from the job site.
Many construction and construction-related companies, including trucking, who use independent contractors will be under incredible attack. The severe civil and criminal penalties are likely to put many construction and construction-related companies out of business.
Any Illinois construction and/or construction-related business (including many trucking companies) should immediately call me, Nancy Joerg (phone: 630-377-1554 - email: firstname.lastname@example.org) or Wessels Sherman Bailey Joerg Liszka Laverty Risch P.C. Attorney Jeff Risch (phone: 630-377-1554 - email: email@example.com) to schedule a phone conference or an in-person meeting to carefully review your written independent contractor agreement and your independent contractor relationships. One of the key issues we need to check is whether you have a non-compete provision in your independent contractor agreement (if you do, it must be deleted immediately per this new law!!!).
Frightening and dangerous times are ahead for Illinois construction and construction-related companies (including trucking companies)