Employment Law Council - Budget Proposal Breakdown/Legislation of Interest

Aaron Harris | Executive Director, Employment Law Council | 312-596-5899

The mission of the Employment Law Council is to effectively represent Illinois employers on employment law issues such as workers compensation, unemployment insurance, employment discrimination, workplace mandates and other management/employee issues. We advocate public policy actions that advance the interests and viewpoints of employers, and to assist in creating a political climate conducive to improving Illinois' ability to create and retain jobs.

The Council accomplishes its mission with the involvement of hundreds of employers who participate in our three committees: Workers' Compensation; Employment Law & Litigation; and Unemployment Insurance. Through the efforts of these committees we develop policies and strategies that are implemented by the Council and Illinois Chamber staff.

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California Misclassification of Independent Contractors Legislation Brought to Illinois

The Attorney General’s Office is currently in discussions with several stakeholders on creating a presumption of employment that everyone is an employee unless the employer can show they are an independent contractor. The employer would have to prove all of the factors to establish “Independent contractor” status this would include:

1) An individual has been and will continue to be free from control and direction over services rendered both in contract or agreement of service and in fact:

Services rendered are outside the usual course of services performed by the individual hired.
Individual is engaged in an independently established trade, occupation, profession or business.

2) Individual is a sole proprietor, partnership, LLC, Corporation based on additional factors that includes:

Entity performs services free from the direction or control
Entity provides services directly to the hiring entity and not the customer
Entity requires a license, permit, business tax, etc.
Hiring entity does not represent the servicing entity as an employee to customers
Entity maintains clientele without restrictions from the hiring entity
Can negotiate its own rates
Customarily and regularly exercises discretion and independent judgement in the performance of the services
Owns the capital goods and gains the profits and bears the losses
Pays fees, taxes and contributions as required by law.

Employers are deemed to be in violation unless they can show exception to either (1) or (2).

Retaliation: It is a violation against any employer to retaliate against any “employee or independent contractor” exercising the aforementioned rights. This includes:

Threatening to discharge, suspend, penalize, demote, discriminate against.
Any adverse action that would impact former employee’s currently or future employment OR
Contacting Immigration

Notice of Reclassified Employees: Every employer must post a sign that can be obtained on IDOL’s website that describes the test to determine whether an individual is an employee or an independent contractor and penalties if the employer fails to classify an employee correctly.

Enforcement of Act: IDOL and Attorney General Office (“AG”) can do investigations, and inspect documents, along with having subpoena power.

Complaints with IDOL may be filed. IDOL may go into books, question witnesses, quasi administrative proceedings, and civil penalty.
AG can bring action in circuit court, and conduct investigation, conduct quasi administrative proceedings.
Private cause of action- individuals can go straight to circuit court and bypass quasi proceedings.

Penalties and Remedies:

A violation of $2500 for independent contractor misclassification
$25,000 for Retaliation; 50K for repeat offense of retaliation
$500 for not posting notice; $1,500 for repeat offenses

Bills of Interest

Below we’ve highlighted legislation we’re tracking that has been referred to standing committees in the House or Senate:

HB 1120 - Provides that any renewal of a certified charter must include a union neutrality clause. Requires a union neutrality clause to be included in a charter school proposal. Defines "union neutrality clause". The Chamber is opposed.

HB 1122 - Creates the Freelance Worker Protection Act, which requires that freelance workers be compensated by hiring parties for their services in a timely manner. Provides that whenever a hiring party retains the services of a freelance worker, the contract between the hiring party and the freelance worker shall be reduced to writing. Provides that no hiring party shall threaten, intimidate, discipline, harass, deny a work opportunity to, or discriminate against a freelance worker, or take any other action that penalizes a freelance worker for, or is reasonably likely to deter a freelance worker from, exercising or attempting to exercise any right guaranteed under the Act. The chamber is opposed.

HB 1530 - Creates the Family and Medical Leave Insurance Program Act. Requires the Department of Employment Security to establish and administer a Family and Medical Leave Insurance Program that provides family and medical leave insurance benefits to eligible employees. The Chamber and other business groups are strongly opposed.

HB 1363 - Amends the Gender Violence Act. Defines "employee", "employer", "work environment", and "workplace". Changes the definition of "gender-related violence" to include domestic violence. Provides that an employer shall be liable only for gender-related violence committed in the work environment by an employee or agent of the employer. Provides specific instances in which an employer is liable for gender-related violence. The chamber has reached an agreement with the sponsor to make changes. Once the bill is amended to reflect this, the Chamber will be neutral.

HB 1065 - Amends the Workers' Compensation Act. Provides that the rebuttable presumption concerning specified conditions or impairments of health of an employee employed as a firefighter, emergency medical technician, emergency medical technician-intermediate, advanced emergency medical technician, or paramedic is intended to shift the burden of proof to the employing entity and any party attacking the presumption must establish by clear and convincing evidence an independent and non-work related cause for the condition or disability and prove that no aspect of the employment contributed to the condition. The Chamber opposes this bill and will work with legislators to make changes through the agreed bill process that is required for workers’ compensation legislation.

SB 1234 – This is the Senate version of HB 1530. Creates the Family and Medical Leave Insurance Program Act. Requires the Department of Employment Security to establish and administer a Family and Medical Leave Insurance Program that provides family and medical leave insurance benefits to eligible employees. The Chamber and other business groups are strongly opposed.

SB 1303 - Amends the Workers' Compensation Act. Provides that an accidental injury that results from repetitive or cumulative trauma and occurs within 6 months after the employee begins employment shall not be considered by a workers' compensation insurer in setting rates. Provides for contribution by prior employers with respect to awards for repetitive or cumulative injuries. The Chamber opposes this bill and will work with legislators to make changes through the agreed bill process that is required for workers’ compensation legislation.

SB 1592 - Amends the Prevailing Wage Act. Provides that regardless of location, all laborers, workers, and mechanics who produce aggregate material that is incorporated, directly or indirectly, into public works or who process aggregate material into concrete, cement, or asphalt that is incorporated, directly or indirectly, into public works shall be deemed to be employed upon public works. "Aggregate materials" would be defined as rock, gravel, sand, pebbles, dirt, soil, clay, bitumen, cultured polymer, cement, concrete, asphalt, and like materials or any other material over which the State or its agencies or political subdivisions exercise engineering specification authority. The chamber is opposed.

SB 1594 - Amends the Prevailing Wage Act. Provides that specified provisions of the Act apply to any survey work performed for construction control, layout, or grade checking. The chamber is opposed.

SB 249 – States that the prevailing wage act shall apply to the construction or demolition of public works performed by an employee of a public body engaged in the construction or demolition of public works on behalf of another public body. The chamber is in support.

SB 1505 - Amends the “definition of “employee” under Illinois Wage Payment and Collection Act to state that it does not include an employer or any individual who has an ownership interest in the partnership, association, corporation (other than ownership of shares of a publicly traded corporation), limited liability company, business trust, or employment placement agency. The chamber is neutral.

SB 1515 - Amends the Right to Privacy in the Workplace Act. Provides that unless otherwise required by State or federal law, an employer shall not voluntarily enroll in the E-Verify program or a similar Electronic Employment Verification System. The bill states if an employer is required to participate in the E-Verify program or a similar Electronic Employment Verification System and receives notification from the Social Security Administration of a discrepancy between an employee's name or social security number and the Social Security Administration's records, an employer must provide the employee with specified information or grant the employee no less than 30 days of unpaid leave to correct any verification discrepancy. The chamber is opposed.

SB 281 - Amends the Day and Temporary Labor Services Act to require that a day and temporary labor service agency must provide an application receipt to applicants who seek a work assignment. The bill gives a day and temporary laborers the right to refuse an assignment to a place where a strike, a lockout, or other labor trouble exists. Requires that a day or temporary laborer who is assigned to work at a third-party client for more than one week shall be paid not less than the average rate of pay and equivalent benefits as directly hired employees of the third party client performing the same or substantially similar work. Allows for a right of action by interested parties for civil penalties against day and temporary labor services. The chamber is opposed.

SB 283 - Amends the Minimum Wage Law. Under the bill, from July 1, 2024 through December 31, 2024, the allowance for gratuities to which an employer is entitled for an employee engaged in an occupation in which gratuities have been recognized as part of the remuneration shall not exceed 20% of the applicable minimum wage rate. From January 1, 2025 through December 31, 2025, the allowance for gratuities shall not exceed 20% of the applicable minimum wage rate. On and after January 1, 2026, an employer shall not be entitled to an allowance for gratuities and shall pay each employee no less than the applicable minimum wage rate. The chamber is opposed.

SB 1493 - Amends the Project Labor Agreements Act to require project labor agreements on public works projects totaling $15,000,000 or more in costs. The chamber is in support.

Governor Pritzker unveils FY24 budget proposal

Last Wednesday Governor JB Pritzker proposed a $49.6 billion budget in his fifth "State of the State" and budget address. His plan focuses on investing in state agencies, public safety, workforce development, early childhood education and care, and capital investments. As part of this, he launched the "Smart Start" Illinois plan aimed at providing preschool access for every child in the state, raising funding for childcare providers, and investing in early childhood facilities. Highlights from the proposal are below.

Smart Start Illinois and other Early Childhood Investments

Will begin with a $250 million investment into early childhood education, care, and salary increases for providers.
$130 million and additional federal dollars to begin funding for Childcare Workforce Compensation Contracts
$40 million for Early Intervention programs to provide funds for the expected increase in participants and a 10 percent rate increase for providers
$70 million to cover expected increasing participation in childcare assistance program and annualize rate increases in FY23.
$20 million to begin upgrading the childcare payment management system

K-12 Education and Higher Education Funding

$70 million per year to launch a teacher pipeline pilot program
$350 million investment into K-12 evidence based funding
$100 million for MAP Grants
$10 million for a Clean Energy and Technical Education Pilot Program
$80 million increase for public universities

Healthcare and Human Services

$26 million for homelessness prevention services
$155 million to support unhoused populations seeking shelter and services
$30 million for street outreach, medical respite, access to counsel, shelter diversion support systems, and re-entry services
$5 million for a new workforce development program
$50 million increase to Temporary Assistance for Needy Families (TANF)
$20 million in new funding for the Illinois Grocery Initiative to address food insecurity faced by millions of Illinoisans living in urban and rural food deserts by incentivizing the opening of grocery stores by independent grocers or local governments, in affected communities across the State.
$450 million for healthcare workforce
$22.8 million for the Children’s Behavioral Health Transformation Initiatives and Recommendations
$2 billion for services for people with developmental disabilities
$37.2 billion for Department of Healthcare and Family Services. This is a $709 million increase from last year.
$45 million to the Department of Public Health for IT replacement for Illinois’ National Electronic Disease Surveillance System and Long-Term Care systems.
$18 million to support reproductive health initiatives
$10.6 million to the Department of Veterans Affairs for staffing and onboarding for the new Chicago Veterans’ Home.

Energy and Environment

The recommended fiscal year 2024 budget fully funds ICC’s implementation of the Energy Transition Act and administration of the Consumer Intervenor Compensation Fund and maintains the commission’s operations.
Funding for new case management and Citation systems to make agency enforcement work more efficient.
Funding to update agency data on public rail crossings.
The recommended budget allows IEPA to meet federal and state enforcement responsibilities to protect the State’s air, water, land, and energy resources.
$32.4 million in appropriation authority to allow IEPA to pursue awards from the federal Infrastructure Investment and Jobs Act (IIJA) for energy efficiency programs and for a “Gulf Hypoxia” initiative to reduce the size of the low-oxygen, hypoxic zone in the northern Gulf of Mexico.
The Inflation Reduction Act will provide IEPA with $263.8 million in federal funding for cost-saving energy efficiency improvements.
New appropriations to allow IEPA to provide rebates for households with this funding.
The recommended budget includes $20.5 million for EV rebates, encouraging the use of EVs to improve air quality in the State.
The proposed budget continues funding for enforcement of the Clean Air Act and the Energy Transition Act, including a $2.0 million increase for expenses of air permitting and inspection activities.
Increase of $1.0 million for costs associated with establishing a dedicated database as part of implementation of PA 101-171 to regulate coal ash.
New funding for the implementation and administration of the Drug Take-Back Act pursuant to PA 102-1055.

Economic and Business Growth

$400 million to the “Invest in Illinois Act” closing fund initiative
An additional $25 million for the Illinois Works Pre-Apprenticeship Program
$2.5 million for a new Office of Outdoor Recreation to promote tourism at destinations around the State and grow the outdoor recreation economy of Illinois.
$10 million for a multi-year initiative to develop and implement a one-stop business portal to assist individuals wishing to create new businesses or relocate businesses to Illinois.
$10 million for a Clean Energy Career and Technical Education pilot initiative to assist high schools with developing curriculum and programming that supports electric vehicle manufacturing technical education.
$2 million for rural economic development, intended to connect communities and improve access to state and federal aid through outreach or technical assistance from rural navigators.
$40 million to support a Social Equity Cannabis Loan program to provide forgivable, direct loans to craft growers experiencing significant barriers to accessing capital.
$10 million for minority-owned business retention by providing funding to entrepreneurs that are currently in Illinois that plan to expand or relocate to another state.
$20 million for a Fast-Track Workforce program to provide employee screening, recruitment, and job training development to employers
$10 million to assist communities with major investments to attract job creators.