lllinois Chamber of Commerce HR Illinois Blog

Nancy E. Joerg, Esq., Wessels Sherman Joerg Liszka Laverty Seneczko P.C.

Illinois companies in construction-related industries should be fully aware of the strict legal requirements of the Illinois Employee Classification Act, a brutal law (pushed through by several unions) which went into effect on January 1, 2008. This punishing law applies to a wide range of construction-related businesses, including some trucking companies, building trades, landscaping, decorating, flooring, etc.

The law requires covered companies to post special notices in English, Spanish, and Polish and keep specific records. The main thrust of the law is to hammer those construction-related companies who “misclassify” independent contractors. Our firm is representing clients hit with assessments from the Illinois Department of Labor (IDOL), some in excess of $200,000. We are, of course, assisting our clients in fighting back.

A new danger under this law: Very recently, we have learned the IDOL may try to mislead companies by sending them a notice asking for broad information and records pertaining to a substantial period of time rather than one particular construction-related project. This approach by the IDOL is not proper, and it is excessively burdensome on the company. Do not answer these IDOL notices under the Illinois Employee Classification Act without experienced legal counsel. You may expose yourself to over-broad liability. Remember, these IDOL assessments under this new law can be huge.

We recommend all Illinois construction-related companies who use 1099 independent contractors, subcontractors, outside vendors, casual labor, or any kind of “non-employees” seek preventative legal help at once. The IDOL (at the urging of some unions) are using this new law to cripple and in some cases almost destroy Illinois construction-related companies who use independent contractors of all types.

Questions? Contact Attorney Nancy E. Joerg of Wessels Sherman’s St. Charles, Illinois office: 630-377-1554.
Nancy Joerg is an advocate and attorney for a wide variety of businesses. She defends them in their use of independent contractors. She drafts, reviews and updates independent contractor agreements. She defends companies before the Illinois Department of Labor (IDOL) in investigations under the Illinois Employee Classification Act. She also defends companies before the Illinois Department of Employment Security (IDES) in IDES audits and unemployment insurance hearings. She also defends companies before the Internal Revenue Service (IRS), the Equal Employment Opportunity Commission (EEOC), the Illinois Department of Human Rights (IDHR), and other agencies and courts.

Joseph H. Laverty, Wessels Sherman Joerg Liszka Laverty Seneczko P.C.

On May 18, 2009, the Healthy Families Act (HFA) was introduced to both the US House and Senate sponsored by Representative Rosa DeLauro and Senator Edward Kennedy.  The bill has been referred to Committee, which is the first step in the legislative process.  Bills first go to committees to deliberate, investigate, and revise them before they go to a general debate.  The bill, as written, would require employers to provide employees with up to 56 hours of paid sick leave.  This is a change to the current law, which does not “require” employers to pay sick leave.

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Nancy E. Joerg, Esq., Wessels Sherman Joerg Liszka Laverty Seneczko P.C.

Many clients have asked me over the years why they should bother urging their independent contractors to advertise.

There are many different independent contractor legal tests across the United States.  Also, the IRS has a different independent contractor test from, for example, the U.S. Department of Labor or the Equal Employment Opportunity Commission (EEOC).  Even though the independent contractor test varies widely, there is one constant throughout all of the independent contractor tests: Whether or not the independent contractor is truly an independent, free-standing business. 

How do you prove that the independent contractor is an independent, free-standing business? One way is to have advertisements from the independent contractor showing that the independent contractor holds himself/herself out to the public in his/her own business name. Auditors and courts are favorably impressed with ads. This kind of documentation will go a long way in proving independent contractor status.  It may not prove it all by itself, but it will certainly strengthen your arguments.

Clients often ask me exactly what qualifies as “an ad.”  An ad can be anything which proves that the independent contractor is soliciting business from the public.  It can be an online listing, a website listing, an ad in the newspaper, a listing in the Yellow Pages, a one-page flier, etc.  It doesn’t really matter if the independent contractors get business from their advertisement; you just want a copy of the advertisement to put in their independent contractor file.

Each independent contractor should design and draft his/her own ad (not you).  If all the ads for all the independent contractors were the same, it would appear that you are the architect of the entire effort rather than the ads being proof of the independent contractor status of each independent contractor.  Also, the independent contractor should mention his or her own business name in the ad.

This simple tip is extremely powerful in action.  I have seen many legal challenges to independent contractor status where the presence of a single ad tips the balance in favor of a finding of independent contractor status.

Questions? Call Attorney Nancy E. Joerg of Wessels Sherman’s St. Charles, Illinois office: 630-377-1554 or email her at najoerg@wesselssherman.com.

Nancy Joerg is an advocate and attorney for a wide variety of businesses. She defends them in their use of independent contractors. She drafts, reviews and updates independent contractor agreements. She defends companies before the Illinois Department of Employment Security (IDES) in IDES audits and unemployment insurance hearings. She also defends companies before the Internal Revenue Service (IRS), the Equal Employment Opportunity Commission (EEOC), the Illinois Department of Human Rights (IDHR), the Illinois Department of Labor (IDOL), and other agencies and courts.

Nancy Joerg is a managing shareholder of Wessels Sherman, a management-side labor and employment law firm.

Sarah Frye, Manager of Legislative Relations, Illinois Chamber

As I mentioned in my previous post, part of the federal stimulus package this year provided additional funds to state unemployment trust funds if certain factors were met.  The Governor signed the agreement into law and was effective June 30, 2009. 

The new law is intended to take advantage of opportunities for additional federal dollars provided by the federal stimulus legislation enacted last February.  The federal-state extended benefit (EB) program is already in effect in Illinois, based on triggers established under current law.  However, given Illinois’ current unemployment rate, adoption of the alternative trigger will make up to 20 weeks’ worth of EB payable in Illinois; as compared to the maximum 13 weeks’ worth under current law.  The alternate trigger will remain in effect for as long as the federal reimbursement rate is 100 percent.

The new law changes the state’s regular unemployment benefit program to qualify the state for an additional $200 million in federal funding available under the stimulus legislation in two ways: (more…)