Senate approves Castro measure to combat wage theft in the construction industry

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castro 040822SPRINGFIELD – To help ensure construction workers are properly compensated, State Senator Cristina Castro (D-Elgin) spearheaded a measure to allow construction workers employed by a subcontractor who fails to pay them to seek remedy from the primary contractor.

“Construction sites can involve a complicated network of multiple subcontractors and dozens of workers,” Castro said. “When subcontractors fail to pay their workers, we have a duty to ensure there is a mechanism in place for workers to receive their hard-earned wages.”

In a typical construction project, commercial property owners or developers will hire a primary, also called a general, contractor to oversee a project. The general contractor will hire and coordinate with subcontractors, such as ones specializing in painting, window installation, electrical and more. Subcontractors employ their own workers to carry out their part of the project.

Under House Bill 5412, if a subcontractor fails to pay an employee, goes bankrupt or cannot pay their employee for any other reason, that employee can file a legal claim with the general contractor for any unpaid wages and benefits. Additionally, it requires the subcontractor to compensate the general contractor if this happens.

“Unfortunately, people experience the very real burdens of wage theft when companies cheat their way out of paying out a paycheck,” Castro said. “This measure will not only ensure hardworking men and women are paid for their labor but also incentivize general contractors to be better business partners with their subcontractors and have a vested interest in their success.”

The legislation includes exemptions for residential rehab and small commercial projects and does not include projects where a homeowner acts as their own general contractor.  Additionally, it adds a statute of limitations for when complaints can be filed and creates a task force to consider innovative ways to bring bond reform to the construction industry.

HB 5412 passed the Senate Friday.

via ISDC

April 9, 2022 at 07:41AM

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