The Illinois Supreme Court has upheld the constitutionality of the Illinois Employee Classification Act, which addresses the practice of misclassifying employees as “independent contractors” in the construction industry. However, the law broadly defines those individuals “performing services” for a construction contractor.
Thus, under this new law, a company such as a construction company, a trucking company which hauls gravel or road-building materials, a landscape company, and a wide variety of other construction-related companies can be challenged by the Illinois Department of Labor (IDOL) on how the company classifies workers as either employees or independent contractors.
The Illinois Employee Classification Act, however, exempts independent contractors, sole proprietors or partnerships that can satisfy specific statutory criteria showing that they effectively operate independently from the construction contractor.
The Illinois Supreme Court rejected an argument that the law was unconstitutionally vague. Rather, it found that the Illinois General Assembly had included highly detailed and specific explanations, such that a reasonably intelligent person could understand the differences between an employee versus an independent contractor.
While the case was on appeal, the Illinois General Assembly added specific amendments to the Act, allowing a construction contractor to file a request for hearing before an administrative tribunal to contest a notice of violation issued by the IDOL.