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Illinois Senate Bill SB2279

Illinois 2023-2024 Regular Session

Illinois Senate Bill SB2279 Compare Versions

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11 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
22 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2279 Introduced 2/10/2023, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED:
33 New Act30 ILCS 105/5.992 new New Act 30 ILCS 105/5.992 new
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66 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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1212 1 AN ACT concerning employment.
1313 2 Be it enacted by the People of the State of Illinois,
1414 3 represented in the General Assembly:
1515 4 Section 1. Short title. This Act may be cited as the
1616 5 Independent Contractor Payment Protection Act.
1717 6 Section 5. Definitions. As used in this Act:
1818 7 "Agreed work terms" or "work terms" means the terms of an
1919 8 agreement between an independent contractor and a client that
2020 9 describes the work to be done and the compensation to be paid
2121 10 and that complies with Section 10.
2222 11 "Client" includes a corporation, limited liability
2323 12 company, partnership, association, non-profit organization, or
2424 13 natural person contracting with an independent contractor in
2525 14 any occupation, industry, trade, business, or service for
2626 15 compensation equal to or greater than $600. "Client" does not
2727 16 include the federal or State government, any unit of local
2828 17 government or school district, or any agency or
2929 18 instrumentality thereof. "Client" also does not include owners
3030 19 of owner-occupied single-family residences, or owners of
3131 20 owner-occupied multi-family residences of 6 units or less, if
3232 21 the work is to be performed, under the agreed work terms, on
3333 22 the owner-occupied residence or the land adjacent to the
3434 23 residence.
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3838 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2279 Introduced 2/10/2023, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED:
3939 New Act30 ILCS 105/5.992 new New Act 30 ILCS 105/5.992 new
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4242 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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7171 1 "Compensation" means the earnings of an independent
7272 2 contractor under the applicable agreed work terms, including
7373 3 reimbursement for expenses.
7474 4 "Department" means the Department of Labor.
7575 5 "Director" means the Director of Labor.
7676 6 "Independent contractor" means a sole proprietor who is
7777 7 not an employee and who is hired or retained by a client for an
7878 8 amount greater than or equal to $600.
7979 9 Section 10. Agreed work terms; requirements. The agreed
8080 10 work terms between an independent contractor and a client
8181 11 shall be
8282 12 (1) reduced to writing;
8383 13 (2) sufficiently detailed in describing how
8484 14 compensation earned and payable shall be calculated;
8585 15 (3) signed by the independent contractor;
8686 16 (4) signed by the client; and
8787 17 (5) kept on file by the client for a period of not less
8888 18 than 6 years.
8989 19 Section 15. Payment of independent contractors. If a
9090 20 client and independent contractor have agreed to work terms,
9191 21 the independent contractor shall be paid the compensation
9292 22 earned in accordance with those terms not later than the last
9393 23 day of the month following the month in which the compensation
9494 24 is earned.
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105105 1 Section 20. Department of Labor; duties; powers.
106106 2 (a) The Department shall inquire diligently regarding any
107107 3 violations of this Act, institute actions for the penalties
108108 4 provided in this Act, and enforce the provisions of this Act.
109109 5 (b) An independent contractor may file a complaint with
110110 6 the Department alleging violations of this Act by submitting a
111111 7 signed, completed independent contractor compensation claim
112112 8 application on the form provided by the Department and by
113113 9 submitting copies of all supporting documentation. The
114114 10 supporting documentation must include the agreed work terms
115115 11 that are alleged to have been violated. Complaints shall be
116116 12 filed within 6 years after the date upon which compensation
117117 13 was due.
118118 14 (c) The Department shall review submitted claim
119119 15 applications to determine whether there is cause for
120120 16 investigation. If the Department finds there is cause for an
121121 17 investigation, the department shall have the following powers:
122122 18 (1) It shall have the power to investigate and attempt
123123 19 to adjust equitably controversies between independent
124124 20 contractors and clients in respect of compensation claims
125125 21 arising under this Act, and, through the Director or any
126126 22 other person in the Department designated by the Director,
127127 23 to administer oaths, subpoena and examine witnesses, to
128128 24 issue subpoenas duces tecum requiring the production of
129129 25 such books, papers, records, and documents as may be
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140140 1 evidence of any matter under inquiry, and to examine and
141141 2 inspect the same as may relate to the question in dispute.
142142 3 Upon the request of the Department, through a subpoena
143143 4 duces tecum or otherwise, the client shall produce a copy
144144 5 of the written work terms to the Department within 5
145145 6 business days of the request. Failure of the client to
146146 7 timely remit the work terms to the Department shall create
147147 8 a presumption that the work terms submitted by the
148148 9 independent contractor are the agreed terms. Service of
149149 10 any such subpoenas shall be made by any sheriff or any
150150 11 person. Any court in this State may, upon the application
151151 12 of the Department, compel attendance of witnesses, the
152152 13 production of books and papers, and the giving of
153153 14 testimony before the Department by attachment for contempt
154154 15 or in any other way as the production of evidence may be
155155 16 compelled before such court.
156156 17 (2) It shall have the power to take assignments of
157157 18 compensation claims in the name of the Director and the
158158 19 Director's successors in office and to prosecute actions
159159 20 for the collection of compensation for independent
160160 21 contractors financially unable to prosecute such claims
161161 22 when in the judgment of the Department such claims are
162162 23 valid and enforceable in the courts. No court costs or any
163163 24 fees for necessary process and proceedings shall be
164164 25 payable in advance by the Department for prosecuting such
165165 26 actions. If there is a judgment rendered against the
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176176 1 defendant, the court shall assess as part of that judgment
177177 2 the costs of the proceeding. Upon collection of the
178178 3 judgments, the Department shall pay from the proceeds of
179179 4 the judgment the costs to the independent contractor who
180180 5 is by law entitled to the same. The Department may join in
181181 6 a single proceeding any number of compensation claims
182182 7 against the same client, but the court shall have
183183 8 discretionary power to order a severance or separate trial
184184 9 for hearings.
185185 10 (3) It shall have the power to make complaint in any
186186 11 court of competent jurisdiction for violations of this
187187 12 Act.
188188 13 (4) It shall have the power, subject to appropriation,
189189 14 to establish an administrative procedure to adjudicate
190190 15 compensation claims and to issue final and binding
191191 16 administrative decisions on such compensation claims
192192 17 subject to the terms of the Administrative Review Law,
193193 18 which are hereby expressly adopted. To establish such a
194194 19 procedure, the Director or her or his authorized
195195 20 representative may adopt rules. The adoption, amendment,
196196 21 or rescission of rules for such a procedure shall be in
197197 22 conformity with the requirements of the Illinois
198198 23 Administrative Procedure Act.
199199 24 (d) If the Department institutes any proceedings that
200200 25 require a hearing in the circuit court or through an
201201 26 administrative procedure, the Department shall notify the
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212212 1 independent contractor of the date, time, and location of the
213213 2 hearing.
214214 3 (e) Nothing in this Act shall be construed to prevent any
215215 4 independent contractor from making complaint or prosecuting
216216 5 the independent contractor's own claim for compensation
217217 6 against a client. Any independent contractor aggrieved by a
218218 7 violation of this Act or any rule adopted under this Act may
219219 8 file suit in circuit court of the county in which the alleged
220220 9 violation occurred or in which any client who is party to the
221221 10 action resides, without regard to exhaustion of any
222222 11 alternative administrative remedies provided in this Act.
223223 12 Actions may be brought by one or more independent contractors
224224 13 for and on behalf of themselves and other independent
225225 14 contractors similarly situated. Complaints filed in accordance
226226 15 with this subsection shall be filed within 6 years after the
227227 16 compensation was due.
228228 17 (f) Nothing in this Act shall be construed to limit the
229229 18 authority of the State's Attorney of any county to prosecute
230230 19 actions for violation of this Act or to enforce the provisions
231231 20 of this Act independently and without specific direction of
232232 21 the Department.
233233 22 (g) The failure of a client to keep adequate records shall
234234 23 not bar an independent contractor or the Director from
235235 24 investigating or filing a complaint. In such a case, the
236236 25 client shall have the burden of proving, by clear and
237237 26 convincing evidence, that the independent contractor was paid
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248248 1 all the compensation owed to the contractor by the client
249249 2 under the agreed work terms.
250250 3 Section 25. Penalties; recovery.
251251 4 (a) Any independent contractor not timely paid
252252 5 compensation by a client as required by this Act is entitled to
253253 6 recover through a claim filed with the Department or in a civil
254254 7 action, but not both, the amount of any underpayments and
255255 8 damages of 2% of the amount of any such underpayments for each
256256 9 month following the date of payment during which the
257257 10 underpayments remain unpaid. In a civil action, the
258258 11 independent contractor shall also recover costs and all
259259 12 reasonable attorney's fees.
260260 13 (b) Any client who has been demanded or ordered by the
261261 14 Department or ordered by the court to pay compensation due an
262262 15 independent contractor shall be required to pay a non-waivable
263263 16 administrative fee to the Department in the amount of $250 if
264264 17 the amount ordered by the Department as compensation owed is
265265 18 $3,000 or less; $500 if the amount ordered by the Department as
266266 19 compensation owed is more than $3,000, but less than $10,000;
267267 20 and $1,000 if the amount ordered by the Department as
268268 21 compensation owed is $10,000 or more. Any client who has been
269269 22 so demanded or ordered by the Department or ordered by a court
270270 23 to pay such compensation and who fails to seek timely review of
271271 24 such a demand or order as provided for under this Act and who
272272 25 fails to comply within 15 calendar days after such demand or
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283283 1 within 35 days of an administrative or court order is entered
284284 2 shall also be liable to pay a penalty to the Department of 20%
285285 3 of the amount found owing and a penalty to the independent
286286 4 contractor of 1% per calendar day of the amount found owing for
287287 5 each day of delay in paying such compensation to the
288288 6 independent contractor. All moneys recovered as fees and civil
289289 7 penalties under this Act, except those owing to the affected
290290 8 independent contractor, shall be deposited into the
291291 9 Independent Contractor Compensation Theft Enforcement Fund, a
292292 10 special fund that is created in the State treasury. Moneys in
293293 11 the Fund may be used only by the Department for enforcement of
294294 12 this Act.
295295 13 (c) Any client, or any agent of a client, who in any manner
296296 14 discriminates against any independent contractor because that
297297 15 independent contractor has made a complaint to the client, to
298298 16 the Director or his or her authorized representative in a
299299 17 public hearing, or to a community organization that the
300300 18 independent contractor has not been paid in accordance with
301301 19 the provisions of this Act, or because that independent
302302 20 contractor has caused to be instituted any proceeding under or
303303 21 related to this Act, or because that independent contractor
304304 22 has testified or is about to testify in an investigation or
305305 23 proceeding under this Act is guilty, upon conviction, of a
306306 24 Class C misdemeanor. An independent contractor who has been
307307 25 unlawfully retaliated against shall be entitled to recover
308308 26 through a claim filed with the Department or in a civil action,
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319319 1 but not both, all legal and equitable relief as may be
320320 2 appropriate. In a civil action, such independent contractor
321321 3 shall also recover costs and all reasonable attorney's fees.
322322 4 (d) In addition to the remedies provided in subsections
323323 5 (a), (b), and (c) of this Section, any client or any agent of a
324324 6 client, who, being able to pay compensation to an independent
325325 7 contractor and being under a duty to pay, willfully refuses to
326326 8 pay as provided in this Act, or falsely denies the amount or
327327 9 validity thereof or that the same is due, with intent to secure
328328 10 for himself or other person any underpayment of such
329329 11 indebtedness or with intent to annoy, harass, oppress, hinder,
330330 12 delay, or defraud the independent contractor to whom such
331331 13 indebtedness is due, upon conviction, is guilty of:
332332 14 (1) a Class B misdemeanor for unpaid compensation in
333333 15 the amount of $5,000 or less; or
334334 16 (2) a Class A misdemeanor for unpaid compensation in
335335 17 the amount of more than $5,000.
336336 18 Each day during which any violation of this Act continues
337337 19 shall constitute a separate and distinct offense.
338338 20 Any client or any agent of a client who violates this
339339 21 Section of the Act a subsequent time within 2 years of a prior
340340 22 criminal conviction under this Section is guilty, upon
341341 23 conviction, of a Class 4 felony.
342342 24 In addition to an individual who is deemed to be a client
343343 25 pursuant to Section 5 of this Act, any officers of a
344344 26 corporation or agents of a client who knowingly permit such
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355355 1 client to violate the provisions of this Act shall be deemed to
356356 2 be the client of the independent contractor.
357357 3 (e) Penalties and fees under this Section may be assessed
358358 4 by the Department and recovered in a civil action brought by
359359 5 the Department in any circuit court or in any administrative
360360 6 adjudicative proceeding under this Act. In any such civil
361361 7 action or administrative adjudicative proceeding under this
362362 8 Act, the Department shall be represented by the Attorney
363363 9 General.
364364 10 Section 30. Departmental compensation recovery; remittance
365365 11 to aggrieved independent contractor.
366366 12 (a) Upon the recovery of unpaid compensation from a client
367367 13 that has violated this Act, the Department shall conduct a
368368 14 good faith search to find the aggrieved independent
369369 15 contractor. If, after conducting a good faith search for the
370370 16 aggrieved independent contractor, the Department is unable to
371371 17 find the aggrieved independent contractor, the Department
372372 18 shall deposit the amount recovered into the Independent
373373 19 Contractor Compensation Theft Enforcement Fund.
374374 20 (b) An aggrieved independent contractor may make a request
375375 21 to the Department in order to recover unpaid compensation that
376376 22 has been deposited into the Independent Contractor
377377 23 Compensation Theft Enforcement Fund. The Department shall not
378378 24 require the independent contractor to present a Social
379379 25 Security number or proof of United States citizenship. For the
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390390 1 purpose of paying claims under this Section from the
391391 2 Independent Contractor Compensation Theft Enforcement Fund to
392392 3 aggrieved independent contractors, the Comptroller shall
393393 4 assign a vendor payment number to the Department. When an
394394 5 aggrieved independent contractor makes a valid request for
395395 6 payment to the Department, the Department shall use the vendor
396396 7 payment number to process payment on behalf of the aggrieved
397397 8 independent contractor.
398398 9 Section 35. Rulemaking authority. The Director or his or
399399 10 her authorized representatives shall administer and enforce
400400 11 this Act. In order to accomplish the objectives of this Act and
401401 12 to carry out the duties prescribed by this Act, the Director or
402402 13 his or her authorized representative shall, within one year
403403 14 after the effective date of this Act, adopt rules necessary to
404404 15 administer and enforce the provisions of this Act including
405405 16 the procedures that shall be followed for hearings under
406406 17 Section 20. The adoption, amendment, or rescission of rules
407407 18 shall be in conformity with the requirements of the Illinois
408408 19 Administrative Procedure Act.
409409 20 Section 90. The State Finance Act is amended by adding
410410 21 Section 5.992 as follows:
411411 22 (30 ILCS 105/5.992 new)
412412 23 Sec. 5.992. The Independent Contractor Compensation Theft
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