Prevailing Wage in Illinois: The Basics, Obligations, and Violations

32 states have prevailing wage laws on the books, and Illinois is one of them. Prevailing wages in Illinois are regulated by the Illinois Prevailing Wages Act. Prevailing wage laws are laws that apply to public projects that, when present, set a minimum wage a majority of workers must be paid.

 Let's take a look at how this is accomplished in the state of Illinois.

Prevailing wage basics in Illinois

In Illinois, like other states, prevailing wage laws won't come into play unless a project is considered a public work. The Illinois Prevailing Wage Act defines a public work as “all projects financed in whole or in part, through bonds, grants, loans or other funds made available by or through the state or any of its political subdivisions.”

This means prevailing wages in Illinois apply to a large number of projects.

The Illinois Department of Labor is responsible for both:

• Setting the prevailing wage rate
• Enforcing prevailing wage claims

Prevailing wage rates

Prevailing wage rates in Illinois must follow schedules that are issued every month. Recall that, when discussing prevailing wages, these wages change county by county too. That can seem like a lot to keep up with, but the Illinois Department of Labor does a great job helping contractors. Here's a county breakdown of prevailing wage rates.

Making an Illinois prevailing wage claim

If you believe you have gone unpaid, endured illegal deductions, or if your benefits haven't come through, the Illinois Department of Labor can help. For questions on how to make a claim, here's a helpful list of frequently asked questions. Plus, there's another FAQ for claimants once their claim has been filed.

If you want to go straight to the necessary forms, the Illinois Department of Labor has links to all of them.

Prevailing wage obligations in Illinois

Let's look at the different obligations of public entities and contractors.

For public entities

The party soliciting bids must obtain the appropriate wage rates and categorize all workers appropriately. Once the contract is awarded, the awarding authority must include terms in their contract(s) requiring that all workers will be paid at least the prevailing wage.

If there is no public bid, the public entity must send written notice to their contractor indicating that all laborers will be paid no less than the prevailing wage. If the entity fails to provide such notice, they might become liable for interest, penalties, or fines that would have been owed by the contractor if the correct notice was sent.

For contractors

For contractors, it's mandatory to insert into each subcontract a stipulation stating that all laborers will not be paid less than the prevailing wage. Subs are also required to include that language in all of their contracts. Further, contractors are required to post the prevailing wage rates in a reasonably accessible spot on the project site. If that isn't possible, then they must be posted at the contractor’s business location. Otherwise, you must send written notice to every worker on the project.

In addition to notice, there are other tasks a contractor is obligated to perform. Certified payrolls must be prepared and submitted to the public entity every month. Contractors are also required to retain all records on the project for up to three years. Timesheets, laborer info, worker classification, and more - they should all be kept.

Enforcing prevailing wage violations

For a first prevailing wage violation in Illinois, the contractor will have to pay the unpaid balance to the worker, plus an additional 20% in penalties to the Department of Labor. If the balance remains unpaid, the worker is owed an additional  2% of the unpaid amount each month until paid.

A second violation ups the ante. The contractor still owes that unpaid amount, but the penalty increases to 50%. The monthly late fee is increased to 5%. However, if you incur two violations within a five-year period you are added to the disbarment list. This effectively blocks you from working on public projects for the next four years.

Finally, a quick note on violating the notice requirement. Notice violations attach to the party who failed to give notice, even if they are not the party underpaying. For example, if a contractor does not provide the notice to the sub, and the sub fails to pay prevailing wages, the sub is on the hook for the remaining balance, and the contractor is on the hook for the penalty percentage that goes to the Department of Labor.

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