Laws Fight Questionable Practices that Misclassify Workers or Seek to Avoid Paying State Employment Taxes or Premiums
The Illinois Governor’s Office reported on Tuesday that Governor Pat Quinn signed new laws that day that will help protect Illinois workers’ pay by fighting questionable business practices, particularly in the construction industry. The laws deal with the misclassification of workers and the attempts of employers to avoid paying state employment taxes and premiums. This week’s action is part of Governor Quinn’s commitment to ensuring that all Illinois workers are treated fairly and receive the compensation they deserve.
“Workers shouldn’t have to worry about whether their employers are following the rules and paying everything they owe,” Governor Quinn said. “These new laws will also help the state collect the money it’s owed and help those out of work find employment.”
House Bill 2649, sponsored by State Representative Luis Arroyo (D-Chicago) and State Senator Bill Cunningham (D-Chicago), addresses a common construction industry practice of misclassifying workers as independent contractors. This is done to avoid paying payroll taxes, unemployment insurance, worker’s compensation premiums and overtime payments, which places an unfair tax burden on workers and costs the state of Illinois up to $700 million a year in lost taxes and payments. The new law clarifies the Employee Classification Act to make it more difficult to continue this practice and easier to pursue violators. The law takes effect January 1, 2014.
“Dishonest practices such as purposefully misclassifying construction workers as contractors unfairly prevent hard-working families from receiving the wages and benefits they deserve,” Representative Arroyo said. “We need strong laws to crack down on those who leave employees without pay and crucial protections, especially at a time when workers are struggling to make ends meet.”
“In these difficult times, we must stand strong for our workers and not allow big business to skirt state tax laws,” State Senator Cunningham said. “This legislation will support working families by removing additional burdens they can face even after they have found a job.”
House Bill 923, sponsored by State Representative Jay Hoffman (D-Belleville) and State Senator Michael Noland (D-Elgin), also amends the Employee Classification Act. It requires that all contractors report to the Illinois Department of Labor all payments to people who are not classified as employees of the company. The law prevents tax evasion and eases the tax liability for these types of workers. The law also takes effect Jan 1, 2014.
House Bill 3125, sponsored by State Representative Frank Mautino (D-Spring Valley) and State Senator Gary Forby (D-Benton), helps link unemployed workers with jobs for which their skills qualify them. It establishes a job opportunities website within the Illinois Department of Employment Security (IDES), and requires those with state contracts to consult the website postings when searching for employees with certain skills. The bill also requires IDES to have a veteran’s employment representative at each of its full employment services offices. The law takes effect immediately.
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