A bill aimed at eliminating the practice of deliberately misclassifying workers as private contractors by construction companies passed the state Senate with a 38-19 vote .  It now moves to the Governor where it awaits signature.

HB1795 seeks to stem the tide of an illegal practice used by some in the construction industry that allows them to rob the state of vital revenues and undercut honest contractors.

Misclassification occurs when an entity classifies an individual as an “independent contractor,” rather than an employee, in order to evade paying its share of Social Security taxes, federal unemployment taxes, workers compensation contributions, and state unemployment insurance contributions, as required by state and federal law. Workers who are misclassified as private contractors often receive lower wages and lack basic workplace protections for employees.

By skirting their responsibility to pay their fair share of various taxes and contributions, unscrupulous contractors are able to undercut those who play by the rules when bidding for jobs.  Honest union contracts are unfairly placed in a competitive disadvantage in the marketplace.

A recent study conducted by the University of Missouri-Kansas City estimated that 20,000 constructions workers in Illinois were misclassified as independent contractors in 2005.  As a result of misclassification in all industries in Illinois, including construction, $124.7 million in income tax was lost annually between 2001 and 2005. 

How did your legislator vote?

House vote 

Senate vote 

Read the report by the University of Missouri-Kansas City