(820 ILCS 185/1)
Sec. 1. Short title. This Act may be cited as the Employee Classification Act.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/3)
Sec. 3. Purpose. This Act is intended to address the practice of misclassifying employees as independent contractors.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/5)
Sec. 5. Definitions. As used in this Act: "Construction" means 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.
"Contractor" means any individual, sole proprietor, partnership, firm, corporation, limited liability company, association or other legal entity permitted by law to do business within the State of Illinois who engages in construction as defined in this Act. "Contractor" includes a general contractor and a subcontractor.
"Department" means the Department of Labor.
"Director" means the Director of the Department of Labor.
"Employer" means any contractor that employs individuals deemed employees under Section 10 of this Act; however, "employer" does not include (i) the State of Illinois or its officers, agencies, or political subdivisions or (ii) the federal government.
"Entity" means any contractor for which an individual is performing services and is not classified as an employee under Section 10 of this Act; however, "entity" does not include (i) the State of Illinois or its officers, agencies, or political subdivisions or (ii) the federal government.
"Interested party" means a person with an interest in compliance with this Act. "Performing services" means the performance of 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.
(Source: P.A. 98-106, eff. 1-1-14.) |
(820 ILCS 185/10)
Sec. 10. Applicability; status of individuals performing service. (a) For the purposes of this Act, an individual performing services for a contractor is deemed to be an employee of the employer except as provided in subsections (b) and (c) of this Section. (b) An individual performing services for a contractor is deemed to be an employee of the contractor unless it is shown that: (1) the individual has been and will continue to be | ||
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(2) the service performed by the individual is | ||
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(3) the individual is engaged in an independently | ||
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(4) the individual is deemed a legitimate sole | ||
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(c) The sole proprietor or partnership performing services for a contractor as a subcontractor is deemed legitimate if it is shown that: (1) the sole proprietor or partnership is performing | ||
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(2) the sole proprietor or partnership is not subject | ||
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(3) the sole proprietor or partnership has a | ||
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(4) the sole proprietor or partnership owns the | ||
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(5) the sole proprietor or partnership makes its | ||
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(6) the sole proprietor or partnership includes | ||
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(7) the sole proprietor or partnership performs | ||
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(8) when the services being provided require a | ||
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(9) the sole proprietor or partnership furnishes the | ||
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(10) if necessary, the sole proprietor or | ||
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(11) the contractor does not represent the sole | ||
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(12) the sole proprietor or partnership has the | ||
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(d) Where a sole proprietor or partnership performing services for a contractor as a subcontractor is deemed not legitimate under subsection (c) of this Section, the sole proprietorship or partnership shall be deemed an individual for purposes of this Act.
(e) Subcontractors or lower tiered contractors are subject to all provisions of this Act.
(f) A contractor shall not be liable under this Act for any subcontractor's failure to properly classify persons performing services as employees, nor shall a subcontractor be liable for any lower tiered subcontractor's failure to properly classify persons performing services as employees.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/15)
Sec. 15. Notice. (a) The Department shall post a summary of the requirements of this Act in English, Spanish, and Polish on its official web site and on bulletin boards in each of its offices. (b) An entity for whom one or more individuals perform services who are not classified as employees under Section 10 of this Act shall post and keep posted, in a conspicuous place on each job site where those individuals perform services and in each of its offices, a notice in English, Spanish, and Polish, prepared by the Department, summarizing the requirements of this Act. The Department shall furnish copies of summaries without charge to entities upon request.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/20)
Sec. 20. Failure to properly designate or classify individuals performing services as employees. It is a violation of this Act for an employer or entity not to designate an individual as an employee under Section 10 of this Act unless the employer or entity satisfies the provisions of Section 10 of this Act.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/25)
Sec. 25. Enforcement. (a) Any interested party may file a complaint with the Department against an entity or employer covered under this Act if there is a reasonable belief that the entity or employer is in violation of this Act. It shall be the duty of the Department to enforce the provisions of this Act. The Department shall have the power to conduct investigations in connection with the administration and enforcement of this Act and any investigator with the Department shall be authorized to visit and inspect, at all reasonable times, any places covered by this Act and shall be authorized to inspect, at all reasonable times, documents related to the determination of whether an individual is an employee under Section 10 of this Act. The Director of Labor or his or her representative may compel, by subpoena, the attendance and testimony of witnesses and the production of books, payrolls, records, papers, and other evidence in any investigation and may administer oaths to witnesses. Within 120 days of the filing of a complaint, the Department shall notify the employer in writing of the filing of a complaint and provide the employer the location and approximate date of the project or projects, affected contractors, and the nature of the allegations being investigated.
(b) Whenever the Department believes upon investigation that there has been a violation of any of the provisions of this Act or any rules or regulations promulgated under this Act, the Department may: (i) issue and cause to be served on any party an order to cease and desist from further violation of the Act, (ii) take affirmative or other action as deemed reasonable to eliminate the effect of the violation, (iii) collect the amount of any wages, salary, employment benefits, or other compensation denied or lost to the individual, and (iv) assess any civil penalty allowed by this Act.
(c) If, upon investigation, the Department finds cause to believe that Section 20 or Section 55 of this Act has been violated, the Department shall notify the employer, in writing, of its finding and any proposed relief due and penalties assessed and that the matter will be referred to an Administrative Law Judge to schedule a formal hearing in accordance with the Illinois Administrative Procedure Act. (d) The employer has 28 calendar days from the date of the Department's findings to answer the allegations contained in the Department's findings. If an employer fails to answer all allegations contained in the Department's findings, any unanswered allegations or findings shall be deemed admitted to be true and shall be found true in the final decision issued by the Administrative Law Judge. If, within 30 calendar days of the final decision issued by the Administrative Law Judge, the employer files a motion to vacate the Administrative Law Judge's final decision and demonstrates good cause for failing to answer the Department's allegations, and the Administrative Law Judge grants the motion, the employer shall be afforded an opportunity to answer and the matter shall proceed as if an original answer to the Department's findings had been filed. (e) A final decision of an Administrative Law Judge issued pursuant to this Section is subject to the provisions of the Administrative Review Law and shall be enforceable in an action brought in the name of the people of the State of Illinois by the Attorney General. (Source: P.A. 98-106, eff. 1-1-14.) |
(820 ILCS 185/30)
Sec. 30. Attorney General; State's Attorneys. Criminal violations of this Act shall be prosecuted by the Attorney General or the appropriate State's Attorney. The Department shall refer matters to the Attorney General and the appropriate State's Attorney upon determining that a criminal violation may have occurred.
(Source: P.A. 98-106, eff. 1-1-14.) |
(820 ILCS 185/35)
Sec. 35. Contempt. Whenever it appears that any employer or entity has violated a valid order of the Department issued under this Act, the Director of Labor may commence an action and obtain from the court an order commanding the employer or entity to obey the order of the Department or be adjudged guilty of contempt of court and punished accordingly.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/40)
Sec. 40. Penalties. (a) An employer or entity that violates any of the provisions of this Act or any rule adopted under this Act shall be subject to a civil penalty not to exceed $1,000 for each violation found in the first audit by the Department. Following a first audit, an employer or entity shall be subject to a civil penalty not to exceed $2,000 for each repeat violation found by the Department within a 5 year period. For purposes of this Section, each violation of this Act for each person and for each day the violation continues shall constitute a separate and distinct violation. In determining the amount of a penalty, the Director shall consider the appropriateness of the penalty to the employer or entity charged, upon the determination of the gravity of the violations. (b) The amount of the penalty, when finally determined, may be recovered in any administrative proceeding or a civil action filed in any circuit court by the Director of Labor, or a person aggrieved by a violation of this Act or any rule adopted under this Act. (1) The Department shall distribute to all affected | ||
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(2) In any civil action brought by an interested | ||
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(c) Any uncollected amount shall be subject to the provisions of the Illinois State Collection Act of 1986.
(Source: P.A. 98-106, eff. 1-1-14.) |
(820 ILCS 185/42)
Sec. 42. Debarments. For any second or subsequent violation determined by the Department which is within 5 years of an earlier violation, the Department shall add the employer or entity's name to a list to be posted on the Department's official website. Upon such notice, the Department shall notify the violating employer or entity. No state contract shall be awarded to an employer or entity appearing on the list until 4 years have elapsed from the date of the last violation.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/43) Sec. 43. Reporting requirements. (a) Any contractor for which either an individual, sole proprietor, or partnership is performing construction services shall report all payments made to that individual, sole proprietor, or partnership if the recipient of payment is not classified as an employee. The report shall be submitted electronically to the Illinois Department of Labor annually on or before April 30 following the taxable year in which the payment was made. The report must include: (1) the contractor name, address, and business | ||
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(2) the individual, sole proprietor, or partnership | ||
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(3) the total amount the contractor paid to the | ||
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(b) Reports filed under this Section are confidential and exempt from public disclosure other than to employees in performance of their official duties. However, the name of the reporting contractor and the name of the individual, sole proprietor, or partnership performing construction services shall be disclosed upon request by the general public under the Freedom of Information Act. (c) If the Department, upon investigation, finds that a contractor has failed to file a report or has filed an incomplete report in violation of this Section, the Department shall notify the contractor, in writing, of its finding and assess a civil penalty as provided in Section 40. The matter shall be referred to an Administrative Law Judge to schedule a formal hearing in accordance with the Illinois Administrative Procedure Act. (d) A final decision of an Administrative Law Judge issued pursuant to this Section is subject to the provisions of the Administrative Review Law and shall be enforceable in an action brought in the name of the people of the State of Illinois by the Attorney General. (e) The Department shall have the authority to adopt reasonable rules for implementation of this Section and the hearing process. The General Assembly finds that the adoption of rules to implement this Section is deemed an emergency and necessary for the public interest and welfare. (f) A violation of this Section shall subject the violator to debarment pursuant to Section 42. (g) Nothing in this Section shall apply to a business primarily engaged in the sale of tangible personal property or a contractor doing work for a business primarily engaged in the sale of tangible personal property. (h) Nothing in this Section shall apply to individuals or firms meeting the responsible bidder requirements of Section 30-22 of the Illinois Procurement Code.
(Source: P.A. 98-105, eff. 1-1-14; 99-303, eff. 8-6-15.) |
(820 ILCS 185/45)
Sec. 45. Willful violations. (a) Whoever willfully violates any of the provisions of this Act or any rule adopted under this Act or whoever obstructs the Director of Labor, or his or her representatives, or any other person authorized to inspect places of employment under this Act shall be liable for penalties up to double the statutory amount. (b) Whoever willfully violates any of the provisions of this Act or any rule adopted under this Act shall be liable to the employee for punitive damages in an amount equal to the penalties assessed in subsection (a) of this Section.
(c) The penalty shall be imposed in cases in which an employer or entity's conduct is proven by a preponderance of the evidence to be willful. The penalty may be recovered in a civil action brought by the Director of Labor in any circuit court. In any such action, the Director of Labor shall be represented by the Attorney General. Any uncollected amount shall be subject to the provisions of the Illinois State Collection Act of 1986.
(d) An entity or employer that willfully violates any provision of this Act or any rule adopted under this Act commits a Class C misdemeanor. An entity or employer that commits a second or subsequent violation within a 5 year period commits a Class 4 felony.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/50)
Sec. 50. Employee Classification Fund. All moneys received by the Department as fees and civil penalties under this Act shall be deposited into the Employee Classification Fund and shall be used, subject to appropriation by the General Assembly, by the Department for administration, investigation, and other expenses incurred in carrying out its powers and duties under this Act. The Department shall hire as many investigators and other personnel as may be necessary to carry out the purposes of this Act. Any moneys in the Fund at the end of a fiscal year in excess of those moneys necessary for the Department to carry out its powers and duties under this Act shall be available to the Department for the next fiscal year for any of the Department's duties.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/55)
Sec. 55. Retaliation. (a) It is a violation of this Act for an employer or entity, or any agent of an employer or entity, to retaliate through discharge or in any other manner against any person for exercising any rights granted under this Act. Such retaliation shall subject an employer or entity to civil penalties pursuant to this Act or a private cause of action, or both.
(b) It is a violation of this Act for an employer or entity to retaliate against a person for:
(1) making a complaint to an employer or entity, to a | ||
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(2) causing to be instituted any proceeding under or | ||
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(3) testifying or preparing to testify in an | ||
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(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/60)
Sec. 60. Private right of action. (a) An interested party or person aggrieved by a violation of this Act or any rule adopted under this Act by an employer or entity may file suit in circuit court, in the county where the alleged offense occurred or where any person who is party to the action resides, without regard to exhaustion of any alternative administrative remedies provided in this Act. Actions may be brought by one or more persons for and on behalf of themselves and other persons similarly situated. A person whose rights have been violated under this Act by an employer or entity is entitled to collect:
(1) the amount of any wages, salary, employment | ||
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(2) compensatory damages and an amount up to $500 for | ||
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(3) in the case of unlawful retaliation, all legal or | ||
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(4) attorney's fees and costs.
(b) The right of an interested party or aggrieved person to bring an action under this Section terminates upon the passing of 3 years from the final date of performing services to the employer or entity. This limitations period is tolled if an employer or entity has deterred a person's exercise of rights under this Act.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/63) Sec. 63. Individual liability. In addition to an individual who is an employer pursuant to Section 5 of this Act, any officer of a corporation or agent of a corporation who knowingly permits such employer to violate the provisions of this Act may be held individually liable for all violations and penalties assessed under this Act. This Section shall not apply to an individual who is an officer or agent of a corporation which on the project under investigation satisfies the responsible bidder requirements set forth in the Illinois Procurement Code.
(Source: P.A. 98-106, eff. 1-1-14.) |
(820 ILCS 185/65)
Sec. 65. Rulemaking. The Department may adopt reasonable rules to implement and administer this Act. For purposes of this Act, the General Assembly finds that the adoption of rules to implement this Act is deemed an emergency and necessary for the public interest and welfare.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/70)
Sec. 70. No waivers. (a) There shall be no waiver of any provision of this Act.
(b) It is a Class C misdemeanor for an employer to attempt to induce any individual to waive any provision of this Act.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/75)
Sec. 75. Cooperation. The Department of Labor, the Department of Employment Security, the Department of Revenue, and the Illinois Workers' Compensation Commission shall cooperate under this Act by sharing information concerning any suspected misclassification by an employer or entity of one or more of its employees as independent contractors. Upon determining that an employer or entity has misclassified employees as independent contractors in violation of this Act, the Department shall notify the Department of Employment Security, the Department of Revenue, the Office of the State Comptroller, and the Illinois Workers' Compensation Commission who shall be obliged to check such employer or entity's compliance with their laws, utilizing their own definitions, standards, and procedures.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/80)
Sec. 80. Effect of Final Order. Any finding made pursuant to this Act is for the purpose of enforcing this Act and may not be admissible or binding against a party in any other proceeding.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/900)
Sec. 900. (Amendatory provisions; text omitted).
(Source: P.A. 95-26, eff. 1-1-08; text omitted.) |
(820 ILCS 185/901)
Sec. 901. (Amendatory provisions; text omitted).
(Source: P.A. 95-26, eff. 1-1-08; text omitted.) |
(820 ILCS 185/905)
Sec. 905. (Amendatory provisions; text omitted).
(Source: P.A. 95-26, eff. 1-1-08; text omitted.) |
(820 ILCS 185/910)
Sec. 910. (Amendatory provisions; text omitted).
(Source: P.A. 95-26, eff. 1-1-08; text omitted.) |
(820 ILCS 185/915)
Sec. 915. (Amendatory provisions; text omitted).
(Source: P.A. 95-26, eff. 1-1-08; text omitted.) |
(820 ILCS 185/920)
Sec. 920. (Amendatory provisions; text omitted).
(Source: P.A. 95-26, eff. 1-1-08; text omitted.) |
(820 ILCS 185/925)
Sec. 925. (Amendatory provisions; text omitted).
(Source: P.A. 95-26, eff. 1-1-08; text omitted.) |
(820 ILCS 185/990)
Sec. 990. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.
(Source: P.A. 95-26, eff. 1-1-08.) |
(820 ILCS 185/999)
Sec. 999. Effective date. This Act takes effect January 1, 2008.
(Source: P.A. 95-26, eff. 1-1-08.) |