103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2279 Introduced 2/10/2023, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED: New Act30 ILCS 105/5.992 new Creates the Independent Contractor Payment Protection Act and amends the State Finance Act. Provides that the agreed work terms between an independent contractor and a client shall be: (1) reduced to writing; (2) sufficiently detailed in describing how compensation earned and payable shall be calculated; (3) signed by the independent contractor; (4) signed by the client; and (5) kept on file by the client for a period of not less than 6 years. Provides that an independent contractor shall be paid the compensation earned in accordance with the agreed work terms not later than the last day of the month following the month in which the compensation is earned. Provides that an independent contractor may file a complaint with the Department of Labor alleging a violation of the Act. Provides for enforcement of the Act by the Department. Establishes civil and criminal penalties. Creates the Independent Contractor Compensation Theft Enforcement Fund as a special fund in the State treasury and specifies the uses of the Fund. LRB103 27795 DTM 54173 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2279 Introduced 2/10/2023, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED: New Act30 ILCS 105/5.992 new New Act 30 ILCS 105/5.992 new Creates the Independent Contractor Payment Protection Act and amends the State Finance Act. Provides that the agreed work terms between an independent contractor and a client shall be: (1) reduced to writing; (2) sufficiently detailed in describing how compensation earned and payable shall be calculated; (3) signed by the independent contractor; (4) signed by the client; and (5) kept on file by the client for a period of not less than 6 years. Provides that an independent contractor shall be paid the compensation earned in accordance with the agreed work terms not later than the last day of the month following the month in which the compensation is earned. Provides that an independent contractor may file a complaint with the Department of Labor alleging a violation of the Act. Provides for enforcement of the Act by the Department. Establishes civil and criminal penalties. Creates the Independent Contractor Compensation Theft Enforcement Fund as a special fund in the State treasury and specifies the uses of the Fund. LRB103 27795 DTM 54173 b LRB103 27795 DTM 54173 b A BILL FOR
103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2279 Introduced 2/10/2023, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED:
New Act30 ILCS 105/5.992 new New Act 30 ILCS 105/5.992 new
New Act
30 ILCS 105/5.992 new
Creates the Independent Contractor Payment Protection Act and amends the State Finance Act. Provides that the agreed work terms between an independent contractor and a client shall be: (1) reduced to writing; (2) sufficiently detailed in describing how compensation earned and payable shall be calculated; (3) signed by the independent contractor; (4) signed by the client; and (5) kept on file by the client for a period of not less than 6 years. Provides that an independent contractor shall be paid the compensation earned in accordance with the agreed work terms not later than the last day of the month following the month in which the compensation is earned. Provides that an independent contractor may file a complaint with the Department of Labor alleging a violation of the Act. Provides for enforcement of the Act by the Department. Establishes civil and criminal penalties. Creates the Independent Contractor Compensation Theft Enforcement Fund as a special fund in the State treasury and specifies the uses of the Fund.
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A BILL FOR
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1 AN ACT concerning employment.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the
5 Independent Contractor Payment Protection Act.
6 Section 5. Definitions. As used in this Act:
7 "Agreed work terms" or "work terms" means the terms of an
8 agreement between an independent contractor and a client that
9 describes the work to be done and the compensation to be paid
10 and that complies with Section 10.
11 "Client" includes a corporation, limited liability
12 company, partnership, association, non-profit organization, or
13 natural person contracting with an independent contractor in
14 any occupation, industry, trade, business, or service for
15 compensation equal to or greater than $600. "Client" does not
16 include the federal or State government, any unit of local
17 government or school district, or any agency or
18 instrumentality thereof. "Client" also does not include owners
19 of owner-occupied single-family residences, or owners of
20 owner-occupied multi-family residences of 6 units or less, if
21 the work is to be performed, under the agreed work terms, on
22 the owner-occupied residence or the land adjacent to the
23 residence.
103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2279 Introduced 2/10/2023, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED:
New Act30 ILCS 105/5.992 new New Act 30 ILCS 105/5.992 new
New Act
30 ILCS 105/5.992 new
Creates the Independent Contractor Payment Protection Act and amends the State Finance Act. Provides that the agreed work terms between an independent contractor and a client shall be: (1) reduced to writing; (2) sufficiently detailed in describing how compensation earned and payable shall be calculated; (3) signed by the independent contractor; (4) signed by the client; and (5) kept on file by the client for a period of not less than 6 years. Provides that an independent contractor shall be paid the compensation earned in accordance with the agreed work terms not later than the last day of the month following the month in which the compensation is earned. Provides that an independent contractor may file a complaint with the Department of Labor alleging a violation of the Act. Provides for enforcement of the Act by the Department. Establishes civil and criminal penalties. Creates the Independent Contractor Compensation Theft Enforcement Fund as a special fund in the State treasury and specifies the uses of the Fund.
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A BILL FOR
New Act
30 ILCS 105/5.992 new
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1 "Compensation" means the earnings of an independent
2 contractor under the applicable agreed work terms, including
3 reimbursement for expenses.
4 "Department" means the Department of Labor.
5 "Director" means the Director of Labor.
6 "Independent contractor" means a sole proprietor who is
7 not an employee and who is hired or retained by a client for an
8 amount greater than or equal to $600.
9 Section 10. Agreed work terms; requirements. The agreed
10 work terms between an independent contractor and a client
11 shall be
12 (1) reduced to writing;
13 (2) sufficiently detailed in describing how
14 compensation earned and payable shall be calculated;
15 (3) signed by the independent contractor;
16 (4) signed by the client; and
17 (5) kept on file by the client for a period of not less
18 than 6 years.
19 Section 15. Payment of independent contractors. If a
20 client and independent contractor have agreed to work terms,
21 the independent contractor shall be paid the compensation
22 earned in accordance with those terms not later than the last
23 day of the month following the month in which the compensation
24 is earned.
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1 Section 20. Department of Labor; duties; powers.
2 (a) The Department shall inquire diligently regarding any
3 violations of this Act, institute actions for the penalties
4 provided in this Act, and enforce the provisions of this Act.
5 (b) An independent contractor may file a complaint with
6 the Department alleging violations of this Act by submitting a
7 signed, completed independent contractor compensation claim
8 application on the form provided by the Department and by
9 submitting copies of all supporting documentation. The
10 supporting documentation must include the agreed work terms
11 that are alleged to have been violated. Complaints shall be
12 filed within 6 years after the date upon which compensation
13 was due.
14 (c) The Department shall review submitted claim
15 applications to determine whether there is cause for
16 investigation. If the Department finds there is cause for an
17 investigation, the department shall have the following powers:
18 (1) It shall have the power to investigate and attempt
19 to adjust equitably controversies between independent
20 contractors and clients in respect of compensation claims
21 arising under this Act, and, through the Director or any
22 other person in the Department designated by the Director,
23 to administer oaths, subpoena and examine witnesses, to
24 issue subpoenas duces tecum requiring the production of
25 such books, papers, records, and documents as may be
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1 evidence of any matter under inquiry, and to examine and
2 inspect the same as may relate to the question in dispute.
3 Upon the request of the Department, through a subpoena
4 duces tecum or otherwise, the client shall produce a copy
5 of the written work terms to the Department within 5
6 business days of the request. Failure of the client to
7 timely remit the work terms to the Department shall create
8 a presumption that the work terms submitted by the
9 independent contractor are the agreed terms. Service of
10 any such subpoenas shall be made by any sheriff or any
11 person. Any court in this State may, upon the application
12 of the Department, compel attendance of witnesses, the
13 production of books and papers, and the giving of
14 testimony before the Department by attachment for contempt
15 or in any other way as the production of evidence may be
16 compelled before such court.
17 (2) It shall have the power to take assignments of
18 compensation claims in the name of the Director and the
19 Director's successors in office and to prosecute actions
20 for the collection of compensation for independent
21 contractors financially unable to prosecute such claims
22 when in the judgment of the Department such claims are
23 valid and enforceable in the courts. No court costs or any
24 fees for necessary process and proceedings shall be
25 payable in advance by the Department for prosecuting such
26 actions. If there is a judgment rendered against the
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1 defendant, the court shall assess as part of that judgment
2 the costs of the proceeding. Upon collection of the
3 judgments, the Department shall pay from the proceeds of
4 the judgment the costs to the independent contractor who
5 is by law entitled to the same. The Department may join in
6 a single proceeding any number of compensation claims
7 against the same client, but the court shall have
8 discretionary power to order a severance or separate trial
9 for hearings.
10 (3) It shall have the power to make complaint in any
11 court of competent jurisdiction for violations of this
12 Act.
13 (4) It shall have the power, subject to appropriation,
14 to establish an administrative procedure to adjudicate
15 compensation claims and to issue final and binding
16 administrative decisions on such compensation claims
17 subject to the terms of the Administrative Review Law,
18 which are hereby expressly adopted. To establish such a
19 procedure, the Director or her or his authorized
20 representative may adopt rules. The adoption, amendment,
21 or rescission of rules for such a procedure shall be in
22 conformity with the requirements of the Illinois
23 Administrative Procedure Act.
24 (d) If the Department institutes any proceedings that
25 require a hearing in the circuit court or through an
26 administrative procedure, the Department shall notify the
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1 independent contractor of the date, time, and location of the
2 hearing.
3 (e) Nothing in this Act shall be construed to prevent any
4 independent contractor from making complaint or prosecuting
5 the independent contractor's own claim for compensation
6 against a client. Any independent contractor aggrieved by a
7 violation of this Act or any rule adopted under this Act may
8 file suit in circuit court of the county in which the alleged
9 violation occurred or in which any client who is party to the
10 action resides, without regard to exhaustion of any
11 alternative administrative remedies provided in this Act.
12 Actions may be brought by one or more independent contractors
13 for and on behalf of themselves and other independent
14 contractors similarly situated. Complaints filed in accordance
15 with this subsection shall be filed within 6 years after the
16 compensation was due.
17 (f) Nothing in this Act shall be construed to limit the
18 authority of the State's Attorney of any county to prosecute
19 actions for violation of this Act or to enforce the provisions
20 of this Act independently and without specific direction of
21 the Department.
22 (g) The failure of a client to keep adequate records shall
23 not bar an independent contractor or the Director from
24 investigating or filing a complaint. In such a case, the
25 client shall have the burden of proving, by clear and
26 convincing evidence, that the independent contractor was paid
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1 all the compensation owed to the contractor by the client
2 under the agreed work terms.
3 Section 25. Penalties; recovery.
4 (a) Any independent contractor not timely paid
5 compensation by a client as required by this Act is entitled to
6 recover through a claim filed with the Department or in a civil
7 action, but not both, the amount of any underpayments and
8 damages of 2% of the amount of any such underpayments for each
9 month following the date of payment during which the
10 underpayments remain unpaid. In a civil action, the
11 independent contractor shall also recover costs and all
12 reasonable attorney's fees.
13 (b) Any client who has been demanded or ordered by the
14 Department or ordered by the court to pay compensation due an
15 independent contractor shall be required to pay a non-waivable
16 administrative fee to the Department in the amount of $250 if
17 the amount ordered by the Department as compensation owed is
18 $3,000 or less; $500 if the amount ordered by the Department as
19 compensation owed is more than $3,000, but less than $10,000;
20 and $1,000 if the amount ordered by the Department as
21 compensation owed is $10,000 or more. Any client who has been
22 so demanded or ordered by the Department or ordered by a court
23 to pay such compensation and who fails to seek timely review of
24 such a demand or order as provided for under this Act and who
25 fails to comply within 15 calendar days after such demand or
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1 within 35 days of an administrative or court order is entered
2 shall also be liable to pay a penalty to the Department of 20%
3 of the amount found owing and a penalty to the independent
4 contractor of 1% per calendar day of the amount found owing for
5 each day of delay in paying such compensation to the
6 independent contractor. All moneys recovered as fees and civil
7 penalties under this Act, except those owing to the affected
8 independent contractor, shall be deposited into the
9 Independent Contractor Compensation Theft Enforcement Fund, a
10 special fund that is created in the State treasury. Moneys in
11 the Fund may be used only by the Department for enforcement of
12 this Act.
13 (c) Any client, or any agent of a client, who in any manner
14 discriminates against any independent contractor because that
15 independent contractor has made a complaint to the client, to
16 the Director or his or her authorized representative in a
17 public hearing, or to a community organization that the
18 independent contractor has not been paid in accordance with
19 the provisions of this Act, or because that independent
20 contractor has caused to be instituted any proceeding under or
21 related to this Act, or because that independent contractor
22 has testified or is about to testify in an investigation or
23 proceeding under this Act is guilty, upon conviction, of a
24 Class C misdemeanor. An independent contractor who has been
25 unlawfully retaliated against shall be entitled to recover
26 through a claim filed with the Department or in a civil action,
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1 but not both, all legal and equitable relief as may be
2 appropriate. In a civil action, such independent contractor
3 shall also recover costs and all reasonable attorney's fees.
4 (d) In addition to the remedies provided in subsections
5 (a), (b), and (c) of this Section, any client or any agent of a
6 client, who, being able to pay compensation to an independent
7 contractor and being under a duty to pay, willfully refuses to
8 pay as provided in this Act, or falsely denies the amount or
9 validity thereof or that the same is due, with intent to secure
10 for himself or other person any underpayment of such
11 indebtedness or with intent to annoy, harass, oppress, hinder,
12 delay, or defraud the independent contractor to whom such
13 indebtedness is due, upon conviction, is guilty of:
14 (1) a Class B misdemeanor for unpaid compensation in
15 the amount of $5,000 or less; or
16 (2) a Class A misdemeanor for unpaid compensation in
17 the amount of more than $5,000.
18 Each day during which any violation of this Act continues
19 shall constitute a separate and distinct offense.
20 Any client or any agent of a client who violates this
21 Section of the Act a subsequent time within 2 years of a prior
22 criminal conviction under this Section is guilty, upon
23 conviction, of a Class 4 felony.
24 In addition to an individual who is deemed to be a client
25 pursuant to Section 5 of this Act, any officers of a
26 corporation or agents of a client who knowingly permit such
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1 client to violate the provisions of this Act shall be deemed to
2 be the client of the independent contractor.
3 (e) Penalties and fees under this Section may be assessed
4 by the Department and recovered in a civil action brought by
5 the Department in any circuit court or in any administrative
6 adjudicative proceeding under this Act. In any such civil
7 action or administrative adjudicative proceeding under this
8 Act, the Department shall be represented by the Attorney
9 General.
10 Section 30. Departmental compensation recovery; remittance
11 to aggrieved independent contractor.
12 (a) Upon the recovery of unpaid compensation from a client
13 that has violated this Act, the Department shall conduct a
14 good faith search to find the aggrieved independent
15 contractor. If, after conducting a good faith search for the
16 aggrieved independent contractor, the Department is unable to
17 find the aggrieved independent contractor, the Department
18 shall deposit the amount recovered into the Independent
19 Contractor Compensation Theft Enforcement Fund.
20 (b) An aggrieved independent contractor may make a request
21 to the Department in order to recover unpaid compensation that
22 has been deposited into the Independent Contractor
23 Compensation Theft Enforcement Fund. The Department shall not
24 require the independent contractor to present a Social
25 Security number or proof of United States citizenship. For the
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1 purpose of paying claims under this Section from the
2 Independent Contractor Compensation Theft Enforcement Fund to
3 aggrieved independent contractors, the Comptroller shall
4 assign a vendor payment number to the Department. When an
5 aggrieved independent contractor makes a valid request for
6 payment to the Department, the Department shall use the vendor
7 payment number to process payment on behalf of the aggrieved
8 independent contractor.
9 Section 35. Rulemaking authority. The Director or his or
10 her authorized representatives shall administer and enforce
11 this Act. In order to accomplish the objectives of this Act and
12 to carry out the duties prescribed by this Act, the Director or
13 his or her authorized representative shall, within one year
14 after the effective date of this Act, adopt rules necessary to
15 administer and enforce the provisions of this Act including
16 the procedures that shall be followed for hearings under
17 Section 20. The adoption, amendment, or rescission of rules
18 shall be in conformity with the requirements of the Illinois
19 Administrative Procedure Act.
20 Section 90. The State Finance Act is amended by adding
21 Section 5.992 as follows:
22 (30 ILCS 105/5.992 new)
23 Sec. 5.992. The Independent Contractor Compensation Theft
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1 Enforcement Fund.
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