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Thursday, January 24, 2019

Important Changes to the Prevailing Wage Act

Each June, Illinois local governments have routinely adopted prevailing wage ordinances "ascertaining" the applicable prevailing wages that the government must pay for public works projects. That requirement is contained in the Prevailing Wage Act, which also includes requirements for filing the ordinance with the state, publishing/posting the rates, and certain record-keeping requirements. This will all change with the enactment of P.A. 100-1177 last week, which becomes effective on June 1, 2019.

The new law did not eliminate the requirement that local governments pay prevailing wages. It did, however, eliminate certain obligations local governments have under the Act and modified others, including the following:
  • Local governments no longer need to approve an annual prevailing wage ordinance each June. Instead, the prevailing wage schedule published on the Illinois Department of Labor's website will automatically set the applicable wage rates for each local government.
  • Local governments no longer need to publish or file an ordinance since one is no longer required.
  • The IDOL will be required to maintain an electronic database of certified payrolls which must be in place by April 1, 2020. Once in place, contractors will submit certified payrolls directly online rather than filing them with the local government.
  • The law did not modify existing requirements that local governments include language in a call for bids, contract, or notice about prevailing wages where applicable.
In short, the new law will eliminate certain administrative and record-keeping obligations of local governments but does not change the underlying requirement of paying prevailing wages for projects subject to the Prevailing Wage Act.


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