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Prevailing Wage Act

Requires contractor and subcontractor to pay 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 similar character in the locality where the work is performed.

Violators must pay workers the difference between the wage paid and the prevailing wage, and are subject to penalties and punitive damages. A contractor or subcontractor found to have violated the Act on two occasions in a five-year period may be disbarred from public works projects for four years. Contractors are required to post prevailing wage rates at job sites.

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The Prevailing Wage rates are covered under two separate laws: Prevailing Wage Act and Illinois Procurement Code. The following are the prevailing wage classifications and rates the Department of Labor ascertained for each county within the State of Illinois.

View Prevailing Wage Rates

 
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Scroll down the page just a little until you see the “Forms and Links” section. There are important bullet points here:

Let’s very briefly address required written notice of the Prevailing Wage Act for anyone who is contracting or hiring under the Prevailing Wage. This is important if you are a public body, looking to hire a contractor. It is also important if you are a contractor who may hire a subcontractor. In these cases, you will be required by law to provide written notice of the Prevailing Wage Act to the contractor or subcontractor.

  • On the Prevailing Wage Act page, under the “Form and Links” section, just click the “Public Body Samples” link. All the documents listed are available to be copied and pasted into your contract or printed and documented as needed.
    • The “Model Contract Language” page is an important one because it includes everything a Contractor is required to provide to a Subcontractor. I encourage contractors to print this out, add project identifying information, and both the Contractor and the Subcontractor sign and date. Save a copy of this signed document for five years after the project is completed.

Now, let’s hit the back (page) icon at the top left of the screen to get back to the Prevailing Wage Act page. Just one more important detail before we get into Prevailing Wage calculations and that is the Certified Transcript of Payroll Portal, at the bottom of the Prevailing Wage Act page. Anyone who participates in a Prevailing Wage project (rather for themselves or for their employees) must report into the portal. I am not going to get into portal details during this tutorial, but feel free to come back, click it later, and check out the tutorials available inside.

Finally, we are ready to discuss Prevailing Wage rates. Let’s look toward the top of the Prevailing Wage Act page, for the bright blue circle that states, “View Current Rates.”  As a side note, I encourage contractors to use this avenue of finding and checking rates before every single pay period, because in the State of Illinois, contractors are liable for any rate increases that go into effect during the project.

  • Select the county where the work will take place.

Next, in order to provide a clear example of calculating the Prevailing Wage, I am going to go through a hypothetical. In this hypothetical, we will be paying carpenters to work in Adams County.

  • Select Adams County
 
  • Let’s suppose you will be framing a new school building and select “Carpenter” as the appropriate class. Here, class selection is determined by the actual work being done, which can vary from your usual title. You may normally be a roofer, but if you are painting today, the Illinois Department of Labor will classify you as a “Painter.”
 
  • In the “Carpenter” class you see the “BLD” for building   and “HWY” for highway designations. Basically, anything inside or immediately attached to the exterior of the building should receive the building designation and any work beyond that should receive a highway designation; therefore, if you were crafting a bus stop bench in between the sidewalk and the curb, you would classify as “Carpenter – highway” because you are in no way attached to a building.
  • Please note there is a ledger at the bottom of every rate sheet to help decipher the abbreviations, classes, and other information such as holidays.
 
  • After you selected a class, you will need to determine whether each worker should receive the “Base” or “Foreman” rate. A “Foreman” is anyone in a teaching position. As a rule of thumb, the Illinois Department of Labor likes to see one foreman on every job, and a minimum of one foreman for every eight workers. Please note, business owners are not exempt from the Prevailing Wage Act. Anyone who physically participates in the construction aspect must have a classification.
 
  • Next, on the rate sheet, let’s discuss overtime. We’ll continue using the Adams County Carpenter building classification as our example. Prevailing Wage overtime is very different from regular overtime, because it’s calculated on a DAILY rather than a weekly basis, the overtime rate can also vary by classification, so always check your sheet. In the Adams County, Carpenter, building class, we see that any work over eight hours Monday through Friday is going to be paid at time and a half. Any time AT ALL on a Saturday is going to be paid at time and a half. Any time AT ALL on a Sunday or holiday will be paid at double time. Please note, it’s a common misconception that workers can agree to work straight time for four, ten-hour days. According to the Prevailing Wage Act, overtime MUST be paid according to the rate sheet as we just reviewed above.
 
  • Calculating overtime will always be done by one of these two formulas:

Base rate x Overtime rate + Fringe Benefits + Any Add’l OT rates due. (See right-most columns)

                              Or

Foreman rate x Overtime + Fringe Benefits + Any Add’l OT rates due. (See right-most columns)

  • Fringe Benefits are the nic name given to the collection of benefits due under the Prevailing Wages.

HW = Health and Welfare (Health Insurance, Vision, Dental, and Life Ins.)

Pension = Retirement Benefits

VAC = Vacation

Trng = Training

  • If you are a nonunion shop, and you do not provide benefits to your employees, you will need to add the cash value of the combined fringe benefits to every hour your employee works.
  • If you do pay benefits and would like to learn about taking fringe benefit credits or have any other remaining Prevailing Wage Act questions, please call Jennifer Ryan at the Illinois Department of Labor 217-725-5455.

One last note on paying Prevailing Wage, drive time must be paid (to the driver only) for anyone hauling material, equipment, tools, or project supplies. For a regular car or truck, the driver may receive the Truck Driver 1 classification, but for larger trucks or specialty equipment, please see the ledger at the bottom of the rate sheet to choose a class.

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Certified Transcript of Payroll Portal

Pursuant to PA 100-1177 and 820 ILCS 130/5.1, the Illinois Department of Labor is charged with developing and maintaining an online portal for prevailing wage construction contractors to file their certified payrolls with the department.    

Certified Transcript of Payroll Portal

Advisory on Recent Changes to the Prevailing Wage Act

Governor Pritzker signed legislation amending the Prevailing Wage Act regarding fringe benefit rates for apprentices and to increase penalties for violations of the Act.

Click here to read about the changes.