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1 | AN ACT concerning finance.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the Living | ||||||||||||||||||||||||
5 | Wage Act. | ||||||||||||||||||||||||
6 | Section 5. Policy. It is the policy of the State of | ||||||||||||||||||||||||
7 | Illinois that in order to increase efficiency and cost savings | ||||||||||||||||||||||||
8 | in the work performed by parties who contract with the State of | ||||||||||||||||||||||||
9 | Illinois or any of its political subdivisions the hourly | ||||||||||||||||||||||||
10 | minimum wage to be paid by those contractors shall be $16.36, | ||||||||||||||||||||||||
11 | and shall be increased annually thereafter by an amount | ||||||||||||||||||||||||
12 | specified herein. It is further the policy of the State of | ||||||||||||||||||||||||
13 | Illinois that raising the pay of low-wage workers increases the | ||||||||||||||||||||||||
14 | productivity and quality of their work, lowers turnover, and | ||||||||||||||||||||||||
15 | reduces supervisory costs. These savings and quality | ||||||||||||||||||||||||
16 | improvements will lead to an improved economy in Illinois and | ||||||||||||||||||||||||
17 | more efficient State procurement. | ||||||||||||||||||||||||
18 | Section 10. Definitions. As used in this Act: | ||||||||||||||||||||||||
19 | "Concessions contract" means a contract under which the | ||||||||||||||||||||||||
20 | State of Illinois, or any political subdivision thereof, grants | ||||||||||||||||||||||||
21 | a right to use State property, including land or facilities, | ||||||||||||||||||||||||
22 | for furnishing services. "Concessions contract" includes, but |
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1 | is not limited to, a contract the principal purpose of which is | ||||||
2 | to furnish food, lodging, automobile fuel, souvenirs, | ||||||
3 | newspaper stands, or recreational equipment, or any | ||||||
4 | combination thereof, regardless of whether the services are of | ||||||
5 | direct benefit to the State, its personnel, or the general | ||||||
6 | public. | ||||||
7 | "Contractor" means any individual or other legal entity | ||||||
8 | that is awarded a contract or subcontract by the State of | ||||||
9 | Illinois, its executive department, its agencies, its | ||||||
10 | political subdivisions, and the like. "Contractor" refers to | ||||||
11 | both a prime contractor and all of its subcontractors of any | ||||||
12 | tier on a contract with the State of Illinois, its executive | ||||||
13 | department, its agencies, its political subdivisions, and the | ||||||
14 | like. | ||||||
15 | "Contract" means all types of State agreements, regardless | ||||||
16 | of what they may be called, for the procurement, use, or | ||||||
17 | disposal of supplies, services, professional or artistic | ||||||
18 | services; construction or for leases of real property where the | ||||||
19 | State is the lessee; and capital improvements, including | ||||||
20 | renewals, and includes master contracts; contracts for | ||||||
21 | financing through use of installment or lease-purchase | ||||||
22 | arrangements; renegotiated contracts; amendments to contracts; | ||||||
23 | and change orders, as defined in Section 1-15.30 of the | ||||||
24 | Illinois Procurement Code. "Contract" includes all contracts | ||||||
25 | and any subcontracts of any tier thereunder, whether negotiated | ||||||
26 | or advertised, including any procurement actions, lease |
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1 | agreements, cooperative agreements, provider agreements, | ||||||
2 | intergovernmental service agreements, service agreements, | ||||||
3 | licenses, permits, or any other type of agreement, regardless | ||||||
4 | of nomenclature, type, or particular form, and whether entered | ||||||
5 | into verbally or in writing. The term "contract" shall be | ||||||
6 | interpreted broadly as to include, but not be limited to, any | ||||||
7 | contract that may be consistent with the definition provided in | ||||||
8 | the Illinois Procurement Code or any other applicable Illinois | ||||||
9 | law. Contracts may be the result of competitive bidding or | ||||||
10 | awarded to a single source under applicable authority to do so. | ||||||
11 | In addition to bilateral instruments, "contract" includes, but | ||||||
12 | is not limited to, awards and notices of awards; job orders or | ||||||
13 | task letters issued under basic ordering agreements; letter | ||||||
14 | contracts; orders, such as purchase orders, under which the | ||||||
15 | contract becomes effective by written acceptance or | ||||||
16 | performance; bilateral contract modifications; and concessions | ||||||
17 | contracts. | ||||||
18 | "Minimum wage" means, for purposes of this Act, a wage that | ||||||
19 | is at least: | ||||||
20 | (1) $16.36 per hour beginning January 1, 2018; and | ||||||
21 | (2) Beginning January 1, 2019, and annually | ||||||
22 | thereafter, an amount determined by the Department of Labor | ||||||
23 | pursuant to Section 15 of this Act. | ||||||
24 | "New contract" means a contract that results from a | ||||||
25 | solicitation issued on or after January 1, 2018, or a contract | ||||||
26 | that is awarded outside the solicitation process on or after |
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1 | January 1, 2018. "New contract" includes both new contracts and | ||||||
2 | replacements for expiring contracts. For purposes of this Act, | ||||||
3 | a contract that is entered into prior to January 1, 2018 will | ||||||
4 | constitute a new contract if, through bilateral negotiation, on | ||||||
5 | or after January 1, 2018: | ||||||
6 | (1) the contract is renewed; | ||||||
7 | (2) the contract is extended, unless the extension is | ||||||
8 | made pursuant to a term in the contract as of December 31, | ||||||
9 | 2016 providing for a short-term limited extension; or | ||||||
10 | (3) the contract is amended pursuant to a modification | ||||||
11 | that is outside the scope of the contract. | ||||||
12 | "Worker" means any person engaged in performing work on or | ||||||
13 | in connection with a contract covered by this Act, other than | ||||||
14 | individuals employed in a bona fide executive, administrative, | ||||||
15 | or professional capacity, regardless of the contractual | ||||||
16 | relationship alleged to exist between the individual and the | ||||||
17 | employer. | ||||||
18 | Section 15. Establishing a minimum wage for State | ||||||
19 | contractors and subcontractors. | ||||||
20 | (a) The State, its executive departments, agencies, and | ||||||
21 | political subdivisions shall ensure that new contracts include | ||||||
22 | a provision, which the contractor and any subcontractors shall | ||||||
23 | incorporate directly into lower-tier subcontracts, specifying | ||||||
24 | that, as a condition of payment of the contract, the minimum | ||||||
25 | wage to be paid to workers in the performance of the contract |
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1 | or subcontract shall be at least: | ||||||
2 | (1) $16.36 per hour; and | ||||||
3 | (2) beginning January 1, 2019, and annually | ||||||
4 | thereafter, the amount of the hourly minimum wage required | ||||||
5 | by new contracts shall be published by the Department of | ||||||
6 | Labor. | ||||||
7 | The minimum wage after adjustment under this | ||||||
8 | subsection (a) shall be: | ||||||
9 | (A) no less than the amount published as the | ||||||
10 | minimum wage effective at the date of determination; | ||||||
11 | (B) increased from the existing amount by the | ||||||
12 | annual percentage increase in the Consumer Price Index | ||||||
13 | for Urban Wage Earners and Clerical Workers (Midwest | ||||||
14 | Region, all items); | ||||||
15 | (C) and rounded to the nearest multiple of 10 | ||||||
16 | cents. | ||||||
17 | (3) The minimum wage rates shall be calculated on an | ||||||
18 | annual basis, as described herein, and take effect January | ||||||
19 | 1 of each year. The Department of Labor shall publish the | ||||||
20 | minimum wage rates for the upcoming year at least 90 days | ||||||
21 | before the new rates take effect. | ||||||
22 | (b) When calculating the annual percentage increase in the | ||||||
23 | Consumer Price Index for purposes of item (B) of paragraph (2) | ||||||
24 | of subsection (a) of this Section, the Director of Labor shall | ||||||
25 | compare the Consumer Price Index for the most recent month | ||||||
26 | available with the Consumer Price Index for the same month in |
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1 | the preceding year. | ||||||
2 | (c) Each worker engaged in the performance of a covered | ||||||
3 | contract by the prime contractor or any subcontractor, | ||||||
4 | regardless of any contractual relationship which may be alleged | ||||||
5 | to exist between the contractor and worker, shall be paid not | ||||||
6 | less than the applicable minimum wage under this Act. | ||||||
7 | (d) The contractor may not discharge any part of its | ||||||
8 | minimum wage obligation under this Act by furnishing fringe | ||||||
9 | benefits or the cash equivalent thereof. | ||||||
10 | (e) The contractor shall pay unconditionally to each worker | ||||||
11 | all wages due free and clear and without subsequent deduction | ||||||
12 | rebate, or kickback on any account, except that the provisions | ||||||
13 | of this Act shall not apply as to any deduction made by | ||||||
14 | employers under any title of the federal Social Security Act or | ||||||
15 | the federal Unemployment Insurance Tax Act, or as to any | ||||||
16 | deductions made for union dues pursuant to any bona fide | ||||||
17 | collective bargaining agreement. The payments shall be made no | ||||||
18 | later than one pay period following the end of the regular pay | ||||||
19 | period in which such wages were earned or accrued. A pay period | ||||||
20 | under this Act may not be of any duration longer than | ||||||
21 | semi-monthly. | ||||||
22 | (f) Nothing in this Act shall be construed as relieving a | ||||||
23 | contractor of any other obligation under federal, State or | ||||||
24 | local law, or under contract or collective bargaining | ||||||
25 | agreement, for the payment of a higher wage to any worker, nor | ||||||
26 | shall a lower prevailing wage under any federal, State, or |
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1 | local law, or under contract, entitle a contractor to pay any | ||||||
2 | worker less than the minimum wage established annually under | ||||||
3 | this Act. | ||||||
4 | Section 20. Application of wage standards to collective | ||||||
5 | bargaining agreements. Nothing in this Act shall be construed | ||||||
6 | as to interfere with, impede, or in any way diminish the right | ||||||
7 | of employees to bargain collectively with their employers | ||||||
8 | through representatives of their own choosing in order to | ||||||
9 | establish wages or other conditions of employment in excess of | ||||||
10 | the applicable minimum wage standards in this Act. | ||||||
11 | Section 25. Enforcement, penalties, and private right of | ||||||
12 | action. | ||||||
13 | (a) Any officer, agent, or representative of any public | ||||||
14 | body who willfully violates, or willfully fails to comply with, | ||||||
15 | any of the provisions of this Act, and any contractor or | ||||||
16 | subcontractor, and any officer, employee, or agent thereof, who | ||||||
17 | as such officer, employee, who willfully violates, or willfully | ||||||
18 | fails to comply with, any of the provisions of this Act, is | ||||||
19 | guilty of a Class A misdemeanor. | ||||||
20 | (b) The Department of Labor shall inquire diligently as to | ||||||
21 | any violation of this Act, shall institute actions for | ||||||
22 | penalties herein prescribed, and shall enforce generally the | ||||||
23 | provisions of this Act. The Attorney General shall prosecute | ||||||
24 | such violations upon complaint by the Department or any |
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1 | interested person. | ||||||
2 | (c) Failure to comply with the minimum wage requirement as | ||||||
3 | stated in this Act shall be considered evidence bearing on a | ||||||
4 | contractor's qualification for award of future contracts. | ||||||
5 | (d) The prime contractor and any upper-tier subcontractor | ||||||
6 | shall be responsible for the compliance by any subcontractor or | ||||||
7 | lower-tier subcontractor with the minimum wage requirements | ||||||
8 | set forth in this Act. In the event of any violation of the | ||||||
9 | minimum wage obligation of this subsection (d), the contractor | ||||||
10 | and subcontractor, if any, responsible for the violation shall | ||||||
11 | be liable for the unpaid wages. | ||||||
12 | (e) Under this Act, any worker engaged in the performance | ||||||
13 | of a covered contract by the prime contractor or any | ||||||
14 | subcontractor under it who is paid for his services in a sum | ||||||
15 | less than the stipulated rates for work done under the contract | ||||||
16 | shall have a right of action for whatever difference there may | ||||||
17 | be between the amount so paid and the rates provided by the | ||||||
18 | contract, together with costs and any reasonable attorney's | ||||||
19 | fees as shall be allowed by the court. The contractor or | ||||||
20 | subcontractor shall also be liable to the Department of Labor | ||||||
21 | for 20% of the underpayments and shall be additionally liable | ||||||
22 | to the individual employed by the contractor or subcontractor | ||||||
23 | for punitive damages in the amount of 2% of the amount of any | ||||||
24 | penalty to the State for underpayments for each month following | ||||||
25 | the date of payment during which the underpayments remain | ||||||
26 | unpaid. |
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1 | Where a second or subsequent action to recover | ||||||
2 | underpayments is brought against a contractor or subcontractor | ||||||
3 | and the contractor or subcontractor is found liable for | ||||||
4 | underpayments to any individual working for the contractor or | ||||||
5 | subcontractor, the contractor or subcontractor shall also be | ||||||
6 | liable to the Department of Labor for 50% of the underpayments | ||||||
7 | payable as a result of the second or subsequent action and | ||||||
8 | shall be additionally liable for 5% of the amount of any | ||||||
9 | penalty to the State for underpayments for each month following | ||||||
10 | the date of payment during which the underpayments remain | ||||||
11 | unpaid. | ||||||
12 | The Department shall also have a right of action on behalf | ||||||
13 | of any worker who has a right of action under this Section. An | ||||||
14 | action brought to recover under this Act shall be deemed to be | ||||||
15 | a suit for wages, and any and all judgments entered therein | ||||||
16 | shall have the same force and effect as other judgments for | ||||||
17 | wages. At the request of any worker engaged in the performance | ||||||
18 | of a covered contract by the prime contractor or by any | ||||||
19 | subcontractor under it who is paid less than the minimum wage | ||||||
20 | rate required by this Act, the Department of Labor may take an | ||||||
21 | assignment of the wage claim in trust for the assigning worker | ||||||
22 | and may bring any legal action necessary to collect the claim, | ||||||
23 | and the contractor or subcontractor shall be required to pay | ||||||
24 | the costs incurred in collecting such claim. | ||||||
25 | (f) In the event of a failure to pay any worker all or part | ||||||
26 | of the wages due under this Act, the contracting agency may on |
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1 | its own action or after authorization or by direction of the | ||||||
2 | Department of Labor or the Attorney General acting on behalf | ||||||
3 | the Department of Labor and written notification to the | ||||||
4 | contractor, take action to cause suspension of any further | ||||||
5 | payment, advance, or guarantee of funds until the violations | ||||||
6 | have ceased. Additionally, any failure to comply with the | ||||||
7 | requirements of this Act may be grounds for termination of the | ||||||
8 | right to proceed with the contract work. In that event, the | ||||||
9 | State of Illinois, agency, or any political subdivision | ||||||
10 | thereof, may enter into other contracts or arrangements for | ||||||
11 | completion of the work, charging the contractor in default with | ||||||
12 | any additional cost. A breach of the contract clause may be | ||||||
13 | grounds for debarment as a contractor and subcontractor as | ||||||
14 | provided in Section 30 of this Act. | ||||||
15 | Section 30. Debarment. The Director of the Department of | ||||||
16 | Labor shall publish in the Illinois Register no less often than | ||||||
17 | once each calendar quarter a list of contractors or | ||||||
18 | subcontractors found to have disregarded their obligations to | ||||||
19 | workers under this Act. The Department of Labor shall determine | ||||||
20 | the contractors or subcontractors who, on 2 separate occasions | ||||||
21 | within 5 years, have been determined to have violated the | ||||||
22 | provisions of this Act. Upon that determination, the Department | ||||||
23 | shall notify the violating contractor or subcontractor. The | ||||||
24 | contractor or subcontractor shall then have 10 working days to | ||||||
25 | request a hearing by the Department on the alleged violations. |
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1 | Failure to respond within the 10 working day period shall | ||||||
2 | result in automatic and immediate placement and publication on | ||||||
3 | the list. If the contractor or subcontractor requests a hearing | ||||||
4 | within the 10 working day period, the Director shall set a | ||||||
5 | hearing on the alleged violations. The hearing shall take place | ||||||
6 | no later than 45 calendar days after the receipt by the | ||||||
7 | Department of Labor of the request for a hearing. The | ||||||
8 | Department of Labor is empowered to adopt rules to govern the | ||||||
9 | hearing procedure. No contract shall be awarded to a contractor | ||||||
10 | or subcontractor appearing on the list, or to any firm, | ||||||
11 | corporation, partnership or association in which such | ||||||
12 | contractor or subcontractor has an interest until 4 years have | ||||||
13 | elapsed from the date of publication of the list containing the | ||||||
14 | name of such contractor or subcontractor. | ||||||
15 | A contractor or subcontractor convicted or found guilty | ||||||
16 | under Section 25 of this Act shall be subject to an automatic | ||||||
17 | and immediate debarment, thereafter prohibited from | ||||||
18 | participating in any public works project for 4 years, with no | ||||||
19 | right to a hearing. | ||||||
20 | Section 35. Notice requirement. The contractor or | ||||||
21 | subcontractor must notify all workers performing work on or in | ||||||
22 | connection with a covered contract of the applicable minimum | ||||||
23 | wage rate under this Act. With respect workers performing work | ||||||
24 | under contracts subject to prevailing wage requirements where | ||||||
25 | the prevailing wage rate is in excess of the minimum wage rate |
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1 | established under this Act, the contractor may meet this | ||||||
2 | requirement by posting, in a prominent and accessible place at | ||||||
3 | the worksite, the applicable wage determination under those | ||||||
4 | laws. With respect to workers performing work under contracts | ||||||
5 | whose wages are not subject to prevailing wage requirements, or | ||||||
6 | workers performing work under contracts whose wages are subject | ||||||
7 | to prevailing wage requirements where the prevailing rate is | ||||||
8 | less than the minimum wage established under this Act, the | ||||||
9 | contractor must post a notice provided by the Department of | ||||||
10 | Labor in a prominent and accessible place at the worksite so it | ||||||
11 | may be readily seen by workers. | ||||||
12 | Section 97. Severability. The provisions of this Act are | ||||||
13 | severable under Section 1.31 of the Statute on Statutes.
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14 | Section 99. Effective date. This Act takes effect January | ||||||
15 | 1, 2018.
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