Springfield – A coalition of female and minority owned, as well as union and non-union construction organizations, have banded together in opposition to HB 5412, which would have a crippling impact on their businesses, by requiring general contractors to pay the wages of a subcontractors’ employees, even if the prime contractor has already paid the subcontractor in full.
HB 5412 is being pushed by the powerful Mid-America Carpenters Regional Council and opponents feel it would do nothing to prevent Wage Theft, but only encourage it by allowing rogue subcontractors to get off the hook by not paying their workers, and instead push the responsibility onto the prime contractor, while allowing these bad apples to onto the next job and underbid legitimate contractors, since they have no payroll costs. Also under HB 5412, in situations where the prime and subcontractor are insolvent, the worker never gets paid.
Opponents are asking the bill’s sponsor House Leader Marcus Evans (D-Chicago) to consider a better solution which they have put together and they believe would get to the root of the problem, aimed at helping to prevent wage theft to begin with and hold the bad apples in the construction industry accountable.
The amendment to HB 5412 the opponents put together the following provisions: (here is a link to the language in the amendment)
- Creation of a new Wage Theft Act under the Criminal Code and increase penalties for 1st offense followed by a Felony and requires officers of a company found guilty of wage theft to pay restitution to unpaid worker
- Requires the Dept of Labor to post the employer and officers names of companies guilty of Wage theft on DOL website to 1. Act as deterrent for companies to stay off it and 2. Act as clearing house for legitimate companies to vet bad contractors
- The Creation of the Wage Theft Reimbursement Fund which will allow an employee of a company that is insolvent, and a victim of Wage Theft, to recover their wages. The Wage Theft Reimbursement Fund would be funded with the addition of fines that companies who are not insolvent and have been ordered to pay back wages by the Department of Labor.
Jaemie Neely, Executive Director of Federation of Women Contractors, an advocacy organization that protects the interests of woman-owned construction firms explained that HB5412, if passed, would be damaging to her members and result in some of them going out of business. “For our members who are small businesses, any increase in cost has a catastrophic impact on the financial health of their companies and their ability to compete in the marketplace. We oppose HB5412 because it would not prevent or deter unethical subcontractors from stealing wages from their employees but rather the bill would expose general contractors to a risk of having to pay twice for wages and we think our alternative amendment is a much better solution.”
“Making construction more expensive for everyone locks out future entrepreneurs from the construction industry. Punishing good companies for a few bad apples is a bad idea.” said Jacqueline Gomez, Executive Director of Hispanic American Construction Industry Association.
HB 5412 passed the House Labor Committee on February 16th but Committee members asked the sponsor for more revisions to be made before a final house vote occurs.HBAGC seeks better solution to wage theft issue
- Associated Builders & Contractors
- Black Contractors Owners & Executives
- Chicago Chamber of Commerce
- Chicago & Downstate Roofing Contractors Association
- Chicago Area General Contractors
- Hispanic American Construction Industry Assn
- Home Builders Association of IL
- IL Asphalt & Pavement Assn
- IL Chamber of Commerce
- IL Chemical Industry Council
- IL Construction Industry Committee
- IL Manufacturers Assn
- Il Mechanical & Specialty Contractors Assn
- IL Road & Transportation Builders Association
- Women’s Construction Owners & Executives
Contact: Dan Johnson, Black Contractors Owners & Executives/Hispanic American Construction Industry Assn 312-933-4890
