The Prevailing Wage Act, Private Contractors and TIF financing!

 The Prevailing Wage Act requires that all laborers, workers and mechanics employed by or on behalf of public body engaged in public works be paid no less than the general prevailing hourly rate.  820 ILCS 130/1.  This hourly rate includes cash wages plus fringe benefits, such as, training, health and welfare, insurance, vacations, and pensions paid generally, in the locality in which the work is being performed for employees in similar public works projects.  820 ILCS 130/2. 

 The Prevailing Wage may b e significantly higher than the market wage.  The Prevailing Wage Act applies to all projects financed in whole or in part by certain funds created by statute or bonds issued pursuant to certain statutes.  820 ILCS 130/2.  In a recent case, the Fourth District Appellate court had to decide if a private developer building private family residences in a tax increment financing district receiving a portion of the tax increment from the project is subject to the Prevailing Wage Act. 

 The Fourth District Appellate Court found that the private developer was not subject to the Prevailing Wage Act, because it received a portion of the tax increment for building residences in that district.  Town of Normal v. Hafner, No. 4-09-0121, 2009 WL 4263546 (4th Dist. 2009).  Effective, January 1, 2010, the Prevailing Wage Act, was amended to more clearly define “public works” as projects financed in whole or in part with bonds, grants, loans, or other funds made available by or through the State of any of its political subdivisions. 

 If you have any questions or concerns about whether or not you are subject to the Prevailing Wage Act or entitled to a Prevailing Wage, then please feel free to contact us.

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