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Prevailing Wage

Illinois Prevailing Wage Act – Extended Coverage???

Illinois Prevailing Wage Act – Extended Coverage???

By Walter J. Liszka of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Prevailing Wage on Friday, October 10, 2014.

With the recent amendments of the Illinois Prevailing Wage Act (IPWA) and the decision of the Third District of the Illinois Appellate Court in the case of Department of Labor v. Sackville Construction Inc., 402 Ill.App.3d 195 (3 rd District 2010), all companies who are receiving public funds, and not just those in the construction industry, need to be cognizant of how the Illinois Department of Labor (IDOL) is proceeding to enforce the IPWA.

The IPWA was initially enacted more than seventy (70) years ago and has mainly been applied in the construction trades to establish that no one working in the construction trades is paid less than the “general prevailing rate of wages” (including hourly cash wages and fringe benefits) for construction work in a designated county where that construction work is being performed for public bodies on public projects. In point of fact, the IPWA pay provisions are established by the IDOL on a county-by-county basis and on a monthly basis. The IDOL provides the “rates to be paid” that are primarily set based on “union contracts” in that county for similar work. This law has again primarily been applied for construction work done directly for public bodies on public projects. However, as a result of the various amendments to the IPWA and recent court decisions, the IDOL is significantly extending the reach of the IPWA in a way that can affect private companies working on private projects.

As previously stated, the IPWA requires that “public bodies” (such as the State of Illinois, city governments, school districts, county governments, etc.) pay the prevailing wage rate to all laborers, workers, and mechanics who are engaged in “public works.” The term “public body” is defined to include “any institution supported in whole or in part by public funds,” and the term “public works” is defined as “all projects financed in whole or in part through bonds, grants, loans, or other funds that may be made available by or through the state or any of its political subdivisions.” While many companies assume that the term “public bodies” and “public works” only applies to projects that are for the benefit of the public and performed only on behalf of a government entity, this is an incorrect assumption.

In the case of Department of Labor v. Sackville Construction Inc., 402 Ill.App.3d 195 (3 rd District 2010), the Appellate Court reversed a trial court decision in favor of the construction company, Sackville Construction Inc., and held that, when looking at the language of the statute, the phrase “an institution supported in whole or in part by public funds” was broad enough to cover a private developer as a “public body” under the statute. In that case, a private developer (Rock Island Industrial Partners) entered into a contract with a general contractor (Hy-Brand Contractors) to construct a 45,000 square foot industrial complex on a vacant lot in Rock Island, IL. After entering into the contract, the developer (Rock Island Industrial Partners) entered into an agreement with the City of Rock Island to construct the building. As part of that agreement, the developer (Rock Island Industrial Partners) agreed to invest $1.5 million into the project and the City of Rock Island conveyed the property via title to the developer for $1.00 and also agreed to contribute $150,000 for “use in the project” and also agreed to pay up to $57,000 for “site clearance and demolition.” The general contractor (Hy-Brand Contractors) entered into a contract with Sackville Construction Inc. to provide laborers on the project and the laborers were not paid the prevailing wage.

Also, Hy-Brand Contractors did not inform Sackville Construction Inc. that the City of Rock Island had contributed funds to the project or that the project was covered by the IWPA. After receiving a complaint, the IDOL filed suit against Sackville Construction Inc. for violations of the IPWA. Rock Island Industrial Partners was found to be a “public body” and the private development project was found to be a “public works” because the developer had, in fact, received public funds for the development from the City of Rock Island. Remember, the $150,000 contributed by the City of Rock Island for the site construction and the $57,000 for “site work”!

While the general contractor (Hy-Brand Contractors) was not sued by the IDOL for violations of the IPWA in the Sackville case, this does not mean that the general contractor would not potentially be liable as well. Under the IPWA, any contract that is issued on a public works project must state and inform the subcontractor that the provisions of the IPWA apply to the construction at hand. If this notice is not given, it is possible under the IPWA that the general contractor or, in fact, the public body issuing a contract, would be liable for any interest, penalties, or fines but not wage differential, that might be owed by the subcontractor to the employees if the notice that the project is subject to the IPWA was not in the contract. Simply stated, the subcontractor could “sue the general contractor” and potentially collect the “interest, fines, and penalties” but the subcontractor must pay the “wage differential.” How this would affect the “subcontractor” getting future work from the “general contractor” would be the subject of another article – probably a very short one!

Because of these developments and the new approach by the IDOL in aggressively pursuing matters arising under the IPWA, every contractor and/or subcontractor on a project must clearly ask the question, “Is this project funded in whole or in part by ‘public funds’? And if it is funded in part by ‘public funds,’ is it subject to the IPWA?”

Questions? Contact Walter J. Liszka in the Chicago office at waliszka@wesselssherman.com or by phone at (312) 629-9300. 

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Other

Employers’ Next Problem – Ebola?

Employers’ Next Problem – Ebola?

By Walter J. Liszka of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Other on Wednesday, October 1, 2014.

With the recent problems that have arisen because of the Ebola virus’s extension to the United States and Spain (the death of Thomas Eric Duncan in Dallas and Madrid hospital issues), all employers may face a serious crisis in the future. With the first cases of Ebola transmitted outside the Western African countries of Liberia, Guinea, Sierra Leone, and Nigeria, where a month-long outbreak has killed more than 3,400 people, questions are arising as to how well-prepared other countries and employers are with the fear and potential disastrous consequences of an Ebola outbreak. According to the World Health Organization (WHO), Ebola is a virus characterized by a hemorrhagic fever (a fever accompanied by an escape of blood from a blood vessel) and is frequently fatal. As stated above, in the last month, over 3,400 people have lost their lives and the average fatality rate for Ebola exceed 50% of those affected. While the current outbreak is primarily affecting the Western African countries of Liberia, Guinea, Sierra Leone, and Nigeria, Ebola cases have been reported in the United States and in Spain.

While Ebola is considered as less contagious than some other diseases because it is not transmitted through casual contact or through the air – the Ebola virus transmittal generally occurs through direct contact of human-to-human transmission involving the infected person’s blood, secretions, organs, or other bodily fluids. It is also believed that it can be transmitted through contact with surfaces and materials that have been contaminated by the infected person’s blood or other bodily fluids. It is, at least at this time, believed that the Ebola virus has an incubation period of approximately one (1) month and that an infected person will not show signs of Ebola infection until after fourteen (14) days of exposure. The initial symptoms of Ebola can be a fever, fatigue, muscle pain, headache, and sore throat, and as the disease progresses, additional symptoms include vomiting, diarrhea, rashes, potentially impaired kidney and liver function, and internal/external bleeding.

While employers have a general duty to protect employees from recognized hazards in the workplace, the Occupational Safety and Health Act (OSHA) requires employers to provide a place of employment which is “free from recognized hazards that are causing or are likely to cause death or serious harm.” (29 U.S.C. § 654). It is probable that, at this time, Ebola would not be a consideration or concern for employers in protecting their employees. Unfortunately, if the number of reported cases rose and an employer’s workforce may be at risk due to exposure to an employee who is diagnosed with Ebola, employers may want to consider some of the following steps:

  • Educate employees about how Ebola is spread and best practices to avoid transmission (this should be done by qualified medical personnel).
  • Encourage employees to self-report any potential symptoms and to immediately put those employees on leave of absence if the symptoms develop.
  • Establish a plan for employee notification and continuing work functions if Ebola is discovered. This may involve other work locations.
  • Contact qualified medical personnel and establish a procedure for transporting employees to the hospital and disposing of and cleaning any potentially infected materials.
  • Establish a plan that if an infected individual is identified in the workplace, for identifying those employees with whom the individual has come in contact, so that they can be monitored for symptoms. Also develop a plan to “sanitize/clean” the work location.

Clearly, Ebola would qualify as a serious health condition under the Family Medical Leave Act (FMLA) and any employee who may have come in contact with an infected individual would be eligible for FMLA Leave. As a practical solution, it may be in the employer’s best interest to put on leave any individuals who have been in contact with an infected person to alleviate fear, morale problems, and forestall the expanse of the disease. While at this time, Ebola may not be a major concern for most employers in the United States, the old adage of an “ounce of prevention is worth a pound of cure” could (would) certainly apply.

Questions? Contact Walter J. Liszka in the Chicago office at waliszka@wesselssherman.com or by phone at (312) 639-9300. 

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