Illinois Prevailing Wage Information
Illinois Prevailing Wage Act
The Prevailing Wage Act (PWA) requires contractors and subcontractors to pay laborers, workers and mechanics employed on public works construction projects no less than the general prevailing rate of wages (consisting of hourly cash wages plus fringe benefits) for work of a similar character in the county where the work is performed.
The prevailing wage rate is dependent upon the county/locality in which the work is being performed as well as the classification in which the work falls. The rate of pay is determined by the prevailing wage as ascertained under the PWA paid to laborers, workers and mechanics employed on public works projects and is not determined based upon the rates paid on non-public works. It is not an average or median of rates paid.
The Illinois Prevailing Wage Act (PWA) for Additional Information
Illinois Procurement Code
The “Illinois Procurement Code” requires prevailing wage payments to service employees performing work on state contracts. Currently, calendar year rates for service employees include:
1) Janitorial Cleaning Services
2) Window Cleaning Services
3) Food Service
4) Security Services
5) Printing Services
The Illinois PWA does not require a minimum threshold amount for application of prevailing wages on public works projects.
Wage determinations are published on a monthly basis. Under Section 5 of the PWA, a public body OR the Illinois DOL (on behalf of the public body’s default), must ascertain the prevailing wage rates during June of each calendar year, and thereafter post changes to the July rates.
Prevailing wage rates should be checked monthly. When there is a change in the prevailing wage, the revised rate applies to projects and the public works project. The public body also has the responsibility for notifying the contractor of the revised rate.
Overtime is required for working any hour in excess of eight hours per day, Monday through Friday. Moreover, overtime is required for every hour worked on Saturday, Sunday and Holidays. Overtime compensation is calculated as time and a half of the regular base rate for work on Saturdays and double time for work on Sunday and the weekend.
WORKING ON WEEKENDS
Overtime is required for every hour worked on Saturday and Sunday at the rate of time and a half of the base rate for work on Saturday and double time for work on Sunday.
WORKING ON LEGAL HOLIDAYS
Overtime is required for working on a legal holiday at a rate of time and one half.
In Illinois, workers do not receive payment of prevailing wage shift differential rates per classification.
The PWA establishes a total hourly wage determination that must be paid on public works. The PWA allows for certain fringe benefits (Health and Welfare, Pension/Annuity, Training, and Vacation in some localities) to be considered in determining the prevailing rate and be taken into account as part of the component by being an offset to the total in determining compliance with the prevailing rate. Contractors/subcontractors may choose to pay the entire prevailing wage determination in cash or they may choose to pay some in cash and some in allowable fringe benefits.
If a contractor/subcontractor does not pay any allowable fringe benefits, the total PW hourly determination must be made up in the base hourly wage rate to comply with PWA.
To establish the proper hourly calculation for allowable fringe benefits, contractors/subcontractors must divide the total amount they contribute to a bona fide fringe benefit plan by the total of all hours worked. This is typically done over a yearly basis. A contractor/subcontractor cannot simply take the hours worked and contributions made on public works/prevailing wage jobs to make the hourly calculation. The contractor/subcontractor who wishes to take credit must maintain records to verify any plans for which the contractor/subcontractor participates. The records required for substantiation include but are not limited to records that document all hours worked by all employees on public as well as private works, contributions made, employee co-pays and deductions from employees if any, the total contribution requirements, policies including eligibility requirements, vesting provisions, and calculation of fringe benefit credit taken, if any. It is the burden on the contractor/subcontractor to justify any credit taken.
Illinois does not currently have any state statues that establish specific prevailing wage requirements. However, any jurisdiction in Maine that receives federal funding for construction projects within the state -- such as those funded by the American Recovery & Reinvestment Act -- is required to ensure those projects are managed to the requirements outlined in the federal prevailing wage laws. (Davis-Bacon)
Example 1: If a contractor contributes $520 per month for single insurance coverage and the employee works 2080 hours (40 x 52 weeks) then the effective annual contribution rate is determined by dividing $6240 ($520 x 12) by 2080 which equals $3.00 per hour. If the health and welfare portion of the prevailing wage is $5.05 per hour, the contractor/subcontractor can take a credit of $3.00 per hour and must pay $2.05 ($5.05-$3.00) additional on the hourly base wage.
Example 2: If a contractor contributes $520 per months for single insurance coverage and the employee works 2000 hours and the contributions are only made for three months, which happen to coincide to work on public works, then the effective annual contribution is determined by dividing $1560 ($520 x 3) by 2000 which equals 78 cents per hour. If the health and welfare portion of the prevailing wage is $5.05 per hour, the contractor/subcontractor can take a credit of 78 cents per hour and must pay $4.27 ($5.05 - 78 cents) additional on the hourly base wage. The contractor/subcontractor cannot take a credit for the amount contributed divided by the hours worked on public works only.
Example 3: If a contractor contributed to a bona fide fund $5.05 for every hour worked, the effective annual rate of contribution is $5.05. If the health and welfare portion of the prevailing wage is $5.05 per hour, the contractor/subcontractor can take a credit of $5.05 per hour and does not have to pay any additional amount on the hourly base wage.
Example 4: If a contractor contributed to a bona fide health and welfare fund $6.05 for every hour an employee works, the effective annual rate of contribution is $6.05. If the allowable health and welfare portion of the prevailing wage is $5.05 per hour, the contractor/subcontractor can take a credit of $5.05 per hour. The contractor/subcontractor cannot receive an additional credit of $1.00 ($5.05 - $6.00), which can apply to reducing the hourly base wage that must be paid.
This same formula applies to Pension, Annuity, 401k plans, Training, and Vacation in some localities that are funded by the contractor/subcontractor.
Illinois prevailing wage law does include training contribution. Please See "Fringe Benefits" section.
Only persons who are enrolled in a U.S. Department of Labor certified apprenticeship program may be paid an apprenticeship rate of pay. The rate of pay is determined by the U.S. Department of Labor apprenticeship program, but a contractor must pay the same fringe benefits as required for a tradesman. The apprentice must also receive an amount equal to the fringe benefits amount that prevails for the applicable classification. There are no rates for persons who may be called "pre-apprentice." The only exception to the prevailing rate is for USDOL Certified Apprentices.
TRAVEL & SUBSISTENCE
Where a worker transports materials or equipment to or from a Public Works job site, the time involved is covered by the PWA. The transportation of such materials or equipment by the sellers or suppliers would not be covered. Where the equipment is driven rather than transported that time involved is still considered hours worked under the PWA. This time is not considered commuting time, which is not covered. The manufacturing/processing of materials is not covered. Illinois does not compensate workers for subsistence pay.
Most construction contractors don't need to be licensed in Illinois. Roofing contractors are the exception. To check if a roofing contractor is licensed, call (217) 782-045. To verify that a contractor is licensed, click here for more detailed information:
Illinois Contractor Licensing Policy
CONTRACTOR/SUBCONTRACTOR DUTY OF RECORD-KEEPING
Contractors and subcontractors are required to make and keep the following for not less than three years from date of last payment on a project: 1) records of all laborers, mechanics and other workers employed by them on the project, which records must include each worker's name, address, telephone number when available, social security number, 2) classification or classifications, 3) the hourly wage paid (including itemized hourly cash and fringe benefits paid in each pay period, 4) the number of hours worked each day, and 5) the starting and ending times of work each day.
In addition contractors and subcontractors are required to submit on a monthly basis (by the 10th of the following month in which the work was performed) while working on public works, certified payroll records to the public in charge of the project. Public Bodies are required to keep these records for no less than three years.
A contractor or subcontractor that does not maintain the required records and/or fails to produce the records violates the PWA and is subject to a Notice of Violation. Two Notices of Violation within a five-year period can lead to debarment from working on public works projects.
While participating on public works, contractors and subcontractors are required to submit at monthly intervals certified payroll records to the public body in charge of the project. If a contractor/subcontractor fails to submit a certified payroll, the Contractor violates the PWA and is subject to a Notice of Violation. If a contractor or officer or employee or agent of a contractor fails to file a certified payroll before the due date or who willfully files a false certified payroll as to a material fact is guilty of class A misdemeanor and who is found guilty is subject to immediate debarment for four years without a hearing.
Violators must pay workers the difference between the wage paid and the prevailing wage, and are subject to penalties and punitive damages. A contractor or subcontractor found to have violated the PWA on two occasions in a five year period may be disbarred from public works projects for four years.
Failure of a public body to notify a contractor does not relieve a contractor from the responsibilities to pay the prevailing wage and if the contractor fails to do so, the contractor is liable for the difference in the amount paid and the prevailing wage rate. However, because a public body has an obligation of notification, the public body and not the contractor will be liable for any interest, penalties and fines the Department might assess.
Contractor fails to notify subcontractors
Similarly, where a contractor fails to notify subcontractors that a project is subject to the prevailing wage, the subcontractor is nevertheless responsible to comply with the PWA's requirements regarding paying the prevailing wage for all hours worked, but the General Contractor will be liable for any interest, penalties or fines that might be assessed by the Department.
Monetary penalties for violating the PWA
If the Department finds that a contractor or subcontractor has violated the PWA, the contractor or subcontractor is liable too for the difference between what was paid to the employees and the prevailing wage for all hours worked and owes the Department of Labor a 20% penalty of the underpayment. In addition, the worker(s) is owed 2% of the amount of any such penalty for each month during which underpayments remain unpaid. For a second or subsequent violation, the 20% penalty is increased to 50%, and the 2% penalty is increased to 5%.
Discriminating against an employee that files a complaint
Section 11 of the PWA prohibits a contractor from discriminating against an employee who files a complaint and remedies for the employee include but are not limited to reinstatement and compensation for lost earnings. An employer who violates the PWA by discriminating against an employee is subject to a $5000 penalty for each violation.
The Director of the Department of labor publishes (in the Illinois Register) "no less often than once each calendar quarter, a list of contractors or subcontractors found to have disregarded their obligations to employees" under the PWA.
Section 11 of the PWA provides in part that "no contract shall be awarded to a contractor or subcontractor or to any firm, corporation, partnership or association in which such contractor or subcontractor has an interest until four years have elapsed from the date of publication of the list containing the name of such contractor or subcontractor." The contractor or subcontractor does not have a right to a hearing.
Please See below for list of debarred contractors.
Illinois Department of Labor website
Prevailing wage hearing procedures (Title 56, Chapter 1, Subchapter a, Part 100)
Illinois Prevailing Wage Act
Illinois prevailing wage and/or citizens preference complaint form
Current Prevailing Wage Rates
Certified Transcript of Payroll
Debarred Contractors List
Public Body Samples
Prevailing wage certification form
Prevailing Wage Information: (217) 782-1710
Prevailing Wage Certification: (618) 993-7271