Bill Text: IL SB1347 | 2017-2018 | 100th General Assembly | Introduced


Bill Title: Creates the Living Wage Act. Provides that the State, its agencies, and political subdivisions shall ensure that new contracts and subcontracts include a provision specifying that, as a condition of payment of the contract, the minimum wage to be paid to workers in performance of the contract or subcontract shall be at least $16.36 per hour for new contracts created after January 1, 2018. Provides that for every year thereafter, the Department of Labor shall adjust the amount of the hourly minimum wage by the annual percentage increase in the consumer price index. Sets forth provisions concerning enforcement and penalties. Creates a private right of action to enforce the provisions of the Act. Provides for debarment of certain contractors or subcontractors for violation of the Act. Contains severability provisions. Effective January 1, 2018.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced) 2017-05-04 - Placed on Calendar - Consideration Postponed May 5, 2017 [SB1347 Detail]

Download: Illinois-2017-SB1347-Introduced.html


100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB1347

Introduced 2/9/2017, by Sen. Daniel Biss

SYNOPSIS AS INTRODUCED:
New Act

Creates the Living Wage Act. Provides that the State, its agencies, and political subdivisions shall ensure that new contracts and subcontracts include a provision specifying that, as a condition of payment of the contract, the minimum wage to be paid to workers in performance of the contract or subcontract shall be at least $16.36 per hour for new contracts created after January 1, 2018. Provides that for every year thereafter, the Department of Labor shall adjust the amount of the hourly minimum wage by the annual percentage increase in the consumer price index. Sets forth provisions concerning enforcement and penalties. Creates a private right of action to enforce the provisions of the Act. Provides for debarment of certain contractors or subcontractors for violation of the Act. Contains severability provisions. Effective January 1, 2018.
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CORRECTIONAL BUDGET AND IMPACT NOTE ACT MAY APPLY
FISCAL NOTE ACT MAY APPLY

A BILL FOR

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1 AN ACT concerning finance.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the Living
5Wage Act.
6 Section 5. Policy. It is the policy of the State of
7Illinois that in order to increase efficiency and cost savings
8in the work performed by parties who contract with the State of
9Illinois or any of its political subdivisions the hourly
10minimum wage to be paid by those contractors shall be $16.36,
11and shall be increased annually thereafter by an amount
12specified herein. It is further the policy of the State of
13Illinois that raising the pay of low-wage workers increases the
14productivity and quality of their work, lowers turnover, and
15reduces supervisory costs. These savings and quality
16improvements will lead to an improved economy in Illinois and
17more efficient State procurement.
18 Section 10. Definitions. As used in this Act:
19 "Concessions contract" means a contract under which the
20State of Illinois, or any political subdivision thereof, grants
21a right to use State property, including land or facilities,
22for furnishing services. "Concessions contract" includes, but

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1is not limited to, a contract the principal purpose of which is
2to furnish food, lodging, automobile fuel, souvenirs,
3newspaper stands, or recreational equipment, or any
4combination thereof, regardless of whether the services are of
5direct benefit to the State, its personnel, or the general
6public.
7 "Contractor" means any individual or other legal entity
8that is awarded a contract or subcontract by the State of
9Illinois, its executive department, its agencies, its
10political subdivisions, and the like. "Contractor" refers to
11both a prime contractor and all of its subcontractors of any
12tier on a contract with the State of Illinois, its executive
13department, its agencies, its political subdivisions, and the
14like.
15 "Contract" means all types of State agreements, regardless
16of what they may be called, for the procurement, use, or
17disposal of supplies, services, professional or artistic
18services; construction or for leases of real property where the
19State is the lessee; and capital improvements, including
20renewals, and includes master contracts; contracts for
21financing through use of installment or lease-purchase
22arrangements; renegotiated contracts; amendments to contracts;
23and change orders, as defined in Section 1-15.30 of the
24Illinois Procurement Code. "Contract" includes all contracts
25and any subcontracts of any tier thereunder, whether negotiated
26or advertised, including any procurement actions, lease

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1agreements, cooperative agreements, provider agreements,
2intergovernmental service agreements, service agreements,
3licenses, permits, or any other type of agreement, regardless
4of nomenclature, type, or particular form, and whether entered
5into verbally or in writing. The term "contract" shall be
6interpreted broadly as to include, but not be limited to, any
7contract that may be consistent with the definition provided in
8the Illinois Procurement Code or any other applicable Illinois
9law. Contracts may be the result of competitive bidding or
10awarded to a single source under applicable authority to do so.
11In addition to bilateral instruments, "contract" includes, but
12is not limited to, awards and notices of awards; job orders or
13task letters issued under basic ordering agreements; letter
14contracts; orders, such as purchase orders, under which the
15contract becomes effective by written acceptance or
16performance; bilateral contract modifications; and concessions
17contracts.
18 "Minimum wage" means, for purposes of this Act, a wage that
19is at least:
20 (1) $16.36 per hour beginning January 1, 2018; and
21 (2) Beginning January 1, 2019, and annually
22 thereafter, an amount determined by the Department of Labor
23 pursuant to Section 15 of this Act.
24 "New contract" means a contract that results from a
25solicitation issued on or after January 1, 2018, or a contract
26that is awarded outside the solicitation process on or after

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1January 1, 2018. "New contract" includes both new contracts and
2replacements for expiring contracts. For purposes of this Act,
3a contract that is entered into prior to January 1, 2018 will
4constitute a new contract if, through bilateral negotiation, on
5or after January 1, 2018:
6 (1) the contract is renewed;
7 (2) the contract is extended, unless the extension is
8 made pursuant to a term in the contract as of December 31,
9 2016 providing for a short-term limited extension; or
10 (3) the contract is amended pursuant to a modification
11 that is outside the scope of the contract.
12 "Worker" means any person engaged in performing work on or
13in connection with a contract covered by this Act, other than
14individuals employed in a bona fide executive, administrative,
15or professional capacity, regardless of the contractual
16relationship alleged to exist between the individual and the
17employer.
18 Section 15. Establishing a minimum wage for State
19contractors and subcontractors.
20 (a) The State, its executive departments, agencies, and
21political subdivisions shall ensure that new contracts include
22a provision, which the contractor and any subcontractors shall
23incorporate directly into lower-tier subcontracts, specifying
24that, as a condition of payment of the contract, the minimum
25wage to be paid to workers in the performance of the contract

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1or subcontract shall be at least:
2 (1) $16.36 per hour; and
3 (2) beginning January 1, 2019, and annually
4 thereafter, the amount of the hourly minimum wage required
5 by new contracts shall be published by the Department of
6 Labor.
7 The minimum wage after adjustment under this
8 subsection (a) shall be:
9 (A) no less than the amount published as the
10 minimum wage effective at the date of determination;
11 (B) increased from the existing amount by the
12 annual percentage increase in the Consumer Price Index
13 for Urban Wage Earners and Clerical Workers (Midwest
14 Region, all items);
15 (C) and rounded to the nearest multiple of 10
16 cents.
17 (3) The minimum wage rates shall be calculated on an
18 annual basis, as described herein, and take effect January
19 1 of each year. The Department of Labor shall publish the
20 minimum wage rates for the upcoming year at least 90 days
21 before the new rates take effect.
22 (b) When calculating the annual percentage increase in the
23Consumer Price Index for purposes of item (B) of paragraph (2)
24of subsection (a) of this Section, the Director of Labor shall
25compare the Consumer Price Index for the most recent month
26available with the Consumer Price Index for the same month in

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1the preceding year.
2 (c) Each worker engaged in the performance of a covered
3contract by the prime contractor or any subcontractor,
4regardless of any contractual relationship which may be alleged
5to exist between the contractor and worker, shall be paid not
6less than the applicable minimum wage under this Act.
7 (d) The contractor may not discharge any part of its
8minimum wage obligation under this Act by furnishing fringe
9benefits or the cash equivalent thereof.
10 (e) The contractor shall pay unconditionally to each worker
11all wages due free and clear and without subsequent deduction
12rebate, or kickback on any account, except that the provisions
13of this Act shall not apply as to any deduction made by
14employers under any title of the federal Social Security Act or
15the federal Unemployment Insurance Tax Act, or as to any
16deductions made for union dues pursuant to any bona fide
17collective bargaining agreement. The payments shall be made no
18later than one pay period following the end of the regular pay
19period in which such wages were earned or accrued. A pay period
20under this Act may not be of any duration longer than
21semi-monthly.
22 (f) Nothing in this Act shall be construed as relieving a
23contractor of any other obligation under federal, State or
24local law, or under contract or collective bargaining
25agreement, for the payment of a higher wage to any worker, nor
26shall a lower prevailing wage under any federal, State, or

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1local law, or under contract, entitle a contractor to pay any
2worker less than the minimum wage established annually under
3this Act.
4 Section 20. Application of wage standards to collective
5bargaining agreements. Nothing in this Act shall be construed
6as to interfere with, impede, or in any way diminish the right
7of employees to bargain collectively with their employers
8through representatives of their own choosing in order to
9establish wages or other conditions of employment in excess of
10the applicable minimum wage standards in this Act.
11 Section 25. Enforcement, penalties, and private right of
12action.
13 (a) Any officer, agent, or representative of any public
14body who willfully violates, or willfully fails to comply with,
15any of the provisions of this Act, and any contractor or
16subcontractor, and any officer, employee, or agent thereof, who
17as such officer, employee, who willfully violates, or willfully
18fails to comply with, any of the provisions of this Act, is
19guilty of a Class A misdemeanor.
20 (b) The Department of Labor shall inquire diligently as to
21any violation of this Act, shall institute actions for
22penalties herein prescribed, and shall enforce generally the
23provisions of this Act. The Attorney General shall prosecute
24such violations upon complaint by the Department or any

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1interested person.
2 (c) Failure to comply with the minimum wage requirement as
3stated in this Act shall be considered evidence bearing on a
4contractor's qualification for award of future contracts.
5 (d) The prime contractor and any upper-tier subcontractor
6shall be responsible for the compliance by any subcontractor or
7lower-tier subcontractor with the minimum wage requirements
8set forth in this Act. In the event of any violation of the
9minimum wage obligation of this subsection (d), the contractor
10and subcontractor, if any, responsible for the violation shall
11be liable for the unpaid wages.
12 (e) Under this Act, any worker engaged in the performance
13of a covered contract by the prime contractor or any
14subcontractor under it who is paid for his services in a sum
15less than the stipulated rates for work done under the contract
16shall have a right of action for whatever difference there may
17be between the amount so paid and the rates provided by the
18contract, together with costs and any reasonable attorney's
19fees as shall be allowed by the court. The contractor or
20subcontractor shall also be liable to the Department of Labor
21for 20% of the underpayments and shall be additionally liable
22to the individual employed by the contractor or subcontractor
23for punitive damages in the amount of 2% of the amount of any
24penalty to the State for underpayments for each month following
25the date of payment during which the underpayments remain
26unpaid.

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1 Where a second or subsequent action to recover
2underpayments is brought against a contractor or subcontractor
3and the contractor or subcontractor is found liable for
4underpayments to any individual working for the contractor or
5subcontractor, the contractor or subcontractor shall also be
6liable to the Department of Labor for 50% of the underpayments
7payable as a result of the second or subsequent action and
8shall be additionally liable for 5% of the amount of any
9penalty to the State for underpayments for each month following
10the date of payment during which the underpayments remain
11unpaid.
12 The Department shall also have a right of action on behalf
13of any worker who has a right of action under this Section. An
14action brought to recover under this Act shall be deemed to be
15a suit for wages, and any and all judgments entered therein
16shall have the same force and effect as other judgments for
17wages. At the request of any worker engaged in the performance
18of a covered contract by the prime contractor or by any
19subcontractor under it who is paid less than the minimum wage
20rate required by this Act, the Department of Labor may take an
21assignment of the wage claim in trust for the assigning worker
22and may bring any legal action necessary to collect the claim,
23and the contractor or subcontractor shall be required to pay
24the costs incurred in collecting such claim.
25 (f) In the event of a failure to pay any worker all or part
26of the wages due under this Act, the contracting agency may on

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1its own action or after authorization or by direction of the
2Department of Labor or the Attorney General acting on behalf
3the Department of Labor and written notification to the
4contractor, take action to cause suspension of any further
5payment, advance, or guarantee of funds until the violations
6have ceased. Additionally, any failure to comply with the
7requirements of this Act may be grounds for termination of the
8right to proceed with the contract work. In that event, the
9State of Illinois, agency, or any political subdivision
10thereof, may enter into other contracts or arrangements for
11completion of the work, charging the contractor in default with
12any additional cost. A breach of the contract clause may be
13grounds for debarment as a contractor and subcontractor as
14provided in Section 30 of this Act.
15 Section 30. Debarment. The Director of the Department of
16Labor shall publish in the Illinois Register no less often than
17once each calendar quarter a list of contractors or
18subcontractors found to have disregarded their obligations to
19workers under this Act. The Department of Labor shall determine
20the contractors or subcontractors who, on 2 separate occasions
21within 5 years, have been determined to have violated the
22provisions of this Act. Upon that determination, the Department
23shall notify the violating contractor or subcontractor. The
24contractor or subcontractor shall then have 10 working days to
25request a hearing by the Department on the alleged violations.

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1Failure to respond within the 10 working day period shall
2result in automatic and immediate placement and publication on
3the list. If the contractor or subcontractor requests a hearing
4within the 10 working day period, the Director shall set a
5hearing on the alleged violations. The hearing shall take place
6no later than 45 calendar days after the receipt by the
7Department of Labor of the request for a hearing. The
8Department of Labor is empowered to adopt rules to govern the
9hearing procedure. No contract shall be awarded to a contractor
10or subcontractor appearing on the list, or to any firm,
11corporation, partnership or association in which such
12contractor or subcontractor has an interest until 4 years have
13elapsed from the date of publication of the list containing the
14name of such contractor or subcontractor.
15 A contractor or subcontractor convicted or found guilty
16under Section 25 of this Act shall be subject to an automatic
17and immediate debarment, thereafter prohibited from
18participating in any public works project for 4 years, with no
19right to a hearing.
20 Section 35. Notice requirement. The contractor or
21subcontractor must notify all workers performing work on or in
22connection with a covered contract of the applicable minimum
23wage rate under this Act. With respect workers performing work
24under contracts subject to prevailing wage requirements where
25the prevailing wage rate is in excess of the minimum wage rate

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1established under this Act, the contractor may meet this
2requirement by posting, in a prominent and accessible place at
3the worksite, the applicable wage determination under those
4laws. With respect to workers performing work under contracts
5whose wages are not subject to prevailing wage requirements, or
6workers performing work under contracts whose wages are subject
7to prevailing wage requirements where the prevailing rate is
8less than the minimum wage established under this Act, the
9contractor must post a notice provided by the Department of
10Labor in a prominent and accessible place at the worksite so it
11may be readily seen by workers.
12 Section 97. Severability. The provisions of this Act are
13severable under Section 1.31 of the Statute on Statutes.
14 Section 99. Effective date. This Act takes effect January
151, 2018.
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