8/14/07
On August 6, 2007, Governor Blagojevich signed House Bill 1795, better known as the Employee Classification Act. This Act, which applies only to the construction industry, is aimed at contractors who misclassify their employees as independent contractors to reduce labor costs. To remedy this problem, the Act creates a presumption that an individual performing services for a contractor is an employee of that contractor. Contractors may rebut this presumption only by demonstrating that the worker in question truly works independently. The Act, which goes into effect on January 1, 2008, establishes civil and criminal penalties and gives misclassified workers the right to sue to recover lost wages and benefits, liquidated damages, compensatory damages and attorneys' fees.
Although the Employee Classification Act applies only to the construction industry, several other state and federal laws currently impose substantial penalties for the misclassification of workers. Therefore, Illinois employers who utilize independent contractors should take care to ensure they have not misclassified any employee as an independent contractor.
