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PREVAILING WAGE ACT FREQUENTLY
ASKED QUESTIONS
The Frequently Asked Questions (FAQs) provided below highlight topics and specific questions that are often asked of the Illinois Department of Labor (IDOL).
The information provided in the FAQs is intended to enhance public access and understanding of IDOL laws, regulations and compliance information.
The FAQs are updated on a regular basis, but should not be considered a substitute for the appropriate official documents (i.e. statute and/or administrative rules) and individuals are urged to consult legal counsel of their choice. Court decisions may affect the interpretation and constitutionality of statutes. The Department cannot offer individuals legal advice or offer advisory opinions. If you need a legal opinion, we suggest you consult your own legal counsel. These FAQs are not to be considered complete and do not relieve employers from complying with applicable IDOL laws and regulations.
PREVAILING WAGE ACT
• What is the Prevailing Wage Act?
The Prevailing Wage Act requires contractors and subcontractors to pay all laborers, workers and mechanics employed on public works projects, no less than the general prevailing rate of wages (consisting of hourly cash wages plus fringe benefits) for work of a similar character in the locality where the work is performed.
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• When is the payment of prevailing wage required?
Prevailing wage is required to be paid whenever a “public works” project is undertaken. For more information, click here 820 ILCS 130/2.
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• What are “public works”?
Public works are all fixed works constructed by any public body or paid for in whole or in part with public funds, including all projects funded or financed in whole or in part with bonds, grants, loans, or other funds made available by or through the State or any of its political subdivisions. For more information, click here 820 ILCS 130/2.
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• What makes a project subject to the Act?
A fixed work construction project is subject to the Act, if the project is:
i) undertaken by a governmental body;
ii) funded in whole or in part with “public funds”; or
iii) undertaken by “an institution supported in whole or in part by public funds.”
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• If I undertake a construction project at my home would it be covered under the Act?
Projects undertaken by the owner at an owner-occupied single family residence or at an owner-occupied unit of a multi-family residence are not considered “public works.” For more information, click here 820 ILCS 130/2.
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• Are “TIF” projects subject to the Act?
In accordance with Public Act 96-0058, and the appellate court’s decision in Town of Normal v. Hafner, 395 Ill. App.3d 589, 918 N.E. 2d 1268 (4th Dist. 2009), the applicability of the PWA to “TIF projects” may be summarized as follows:
The mere fact that a construction project is located within a TIF district neither subjects the project to, nor exempts the project from, the Act. Instead, a project is covered when either: i) the project is “publicly funded,” or ii) the project is undertaken by a “public body.”
i) If a project is “publicly funded,” the project is subject to the Act. Neither actual TIF dollars nor TIF benefits constitute “public funding” for purposes of the Act. Keep in mind, however, that projects often have multiple sources of funding. If, in addition to TIF dollars or TIF benefits, a project receives other funding that qualifies as “public funding,” the project is subject to the Act (absent a “superseding” Davis-Bacon wage determination); or
ii) If a project is undertaken by a “public body,” be it a governmental body or “an institution supported in whole or in part with public funds,” the project is subject to the Act, without regard to the source(s) of the project’s funding. In other words, if a “public body” undertakes a construction project, and the project receives TIF dollars or TIF benefits, the project is subject to the Act because it is undertaken by a public body, not because it receives TIF dollars or TIF benefits.
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• What does the phrase "the locality in which the work is being performed" mean?
Generally, "locality" means the county in which the actual work is being performed. For more information, click here 820 ILCS 130/2.
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• Who determines prevailing wage rates?
Section 9 of the Act charges a public body (or IDOL upon the public body's default) to investigate and ascertain the prevailing rate of wages on a countywide basis during June of each calendar year. For more information, click here 820 ILCS 130/4 and 9.
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• Do contractors and subcontractors have to keep time and payroll records?
Yes. Contractors and subcontractors must keep accurate records for at least 3 years showing the name, address, telephone number, social security number, classification/occupation, hourly wages (including itemized hourly cash and fringe rates), hours worked each day, gross and net weekly wages (itemizing deductions) for each laborer, worker and mechanic employed on public works. The records shall be open at all reasonable hours to inspection by the public body awarding the contract, and the Department of Labor. The public body and the Department of Labor may also subpoena the production of all books, records, and other evidence related to an investigation or hearing. For more information, click here 820 ILCS 130/5 and 10.
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• Are contractors and subcontractors required to submit monthly certified payroll records to the public body?
Yes. While participating on public works, contractors and subcontractors are required to submit monthly certified payroll records to the public body in charge of the project. Furthermore, public bodies are required to keep these records for at least 3 years and these records are considered public records under the Freedom of Information Act.
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• What are the penalties for violations of the Act?
If a contractor is found to have violated the Act, they shall be liable to the Department for a 20% penalty of any underpayment owed and to the worker for 2% of the amount of any such penalty for each month during which underpayments remain unpaid. For a second or subsequent violation, a contractor shall be liable to the Department for 50% of the underpayment owed and to the worker for an additional 5% of such penalty for each month during which underpayments remain unpaid. In addition, if a contractor receives two Notices of Violation within a five-year period, the contractor may be barred from contracting for public works for a period of four years. For more information, click here 820 ILCS 130/11 and 11a.
Some examples of violations are: (1) records are not kept; (2) records are not provided or access is denied; (3) contractors are not notified that the project is subject to the prevailing wage; (4) the required prevailing wage rates (base + fringe benefits) are not paid.
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• What constitutes overtime and when must it be paid on public works projects
Overtime pay is required for any hours worked over eight per day Monday thru Friday, as well as any work performed on Saturdays, Sundays and holidays. Please refer to the applicable rate sheet for the overtime/holiday rate in your locality.
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• What is holiday pay and when must it be paid?
Work performed on a holiday or Sunday is payable at the appropriate overtime rate which is typically double time. The following is a list of days for which holiday rates of pay apply: Sundays, New Years Day, Memorial Day, Fourth of July, Labor Day, Veterans Day, Thanksgiving Day and Christmas Day. Generally, if a holiday falls on a Sunday it is recognized on the following Monday, which makes work performed on that Monday payable at the appropriate overtime rate for holiday pay. Please refer to the applicable rate sheet for the holiday rate in your locality.
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• Is the transportation, manufacturing or processing of materials or equipment covered?
The transportation of materials or equipment to or from a public works job site is covered work unless performed by the sellers or suppliers of such materials or equipment. The manufacture or processing of materials or equipment is not covered. For more information, click here 820 ILCS 130/3.
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• When do prevailing rates change?
The prevailing wage rates are ascertained during the month of June each year with revised rates published monthly. If the Department revises the prevailing wage rate, the revised rate applies to the public works project and the public body is responsible for notifying the contractor of the revised rate. For current prevailing wage rates, click here. For more information, click here 820 ILCS 130/4 and 9.
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• Is demolition work covered?
Demolition work that is either publicly funded or undertaken by a public body is subject to the Act, without regard to whether it is done in conjunction with construction. For more information, click here 820 ILCS 130/3.
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• Is commuting time to and from work covered by prevailing wage requirements?
No. Note: Commuting time does not include driving between job sites or transporting materials or equipment.
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• Does the State prevailing wage rate have to be paid on federal construction projects requiring compliance with the Davis-Bacon Act?
No. The Illinois Prevailing Wage Act does not apply to federal construction projects requiring a prevailing wage determination by the U.S. Secretary of Labor. For more information, click here 820 ILCS 130/11. If you wish to locate additional information on the Davis-Bacon Act, click here.
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