Heyl Royster

 

Amendment to Prevailing Wage Act

One of the troubling aspects of the Prevailing Wage Act has been its requirement that the contracting governmental body is responsible to notify the contractor and each subcontractor of prevailing wage rates when revised during the term of the contract (805 ILCS 130/4(d)). Read literally, this requires the contracting governmental body to monitor changes in the Department of Labor website for wage rates on a monthly basis and to notify contractors of those changes. Failure to do so would result in potential civil or criminal penalties.

For several years, it has been suggested that the contractor and subcontractor, rather than the governmental body, should be put at this risk, or that at least the governmental body should be able to escape its responsibilities by pointing the contractor and subcontractor to the Department of Labor's website.

Public Act 97-0964 now provides relief to the public body. In relevant part, the Public Act states:

"The public body or entity shall discharge its duty to notify of the revised rates by inserting a written stipulation in all contracts or other written instruments that state the prevailing rate of wages are revised by the Department of Labor and are available on the Department's official website. This shall be deemed to be proper notification of any rate changes under this subsection."

Since the language of the Public Act is mandatory, we are recommending to clients that all contracts which involve the prevailing wage must state that the prevailing rate of wages are revised by the Department of Labor and are available on the Department's official website. In those situations where there is not a written contract, we strongly suggest that governmental bodies include this language with their Section 4(a-2) notice (requiring notice absent bidder contract).

We are happy to assist our clients with respect to appropriate language for contract or Section 4(a-2) notice.

The effective date of this statutory amendment is January 1, 2013.