Home Builders Oppose HB2838 General Contractors Held Liable for Subcontractor Employee Wages The Home Builders Association of Illinois vehemently opposes the passage of HB2838, a bill holding General Contractors (GCs) liable for the payment of wages to employees of a subcontractor even when the GC has paid the subcontractor in full. HBAI is joined by the following associations in opposing this blow to the construction industry that is still suffering from the Great Recession: Illinois Manufacturers’ Association Ill. Mech. Specialty Contractors Assoc. Illinois Chamber of Commerce National Fed. of Independent Business Illinois Construction Industry Committee Associated Builders & Contractors Ill. Road & Transport. Builders Assoc. Ill. Landscape Contractors Association HB2838 will leave GCs potentially liable to pay every construction worker twice – once thru payment to the subcontractor, then again directly to the employee if the subcontractor fails to pass payment and benefits along to their employees. This legislation applies specifically to private construction projects and is taken from legislation passed last year in California and Maryland. Oregon also has a law, but with one very important difference; it only holds the GCs responsible if the subcontractor has not been paid in full for completed work. This highly controversial measure is certain to increase the cost of construction even if no one ever files a claim: • Insurance - GCs will need liability insurance to protect themselves from wage protection lawsuits for years after every job is complete. • Labor – GCs will need to hire office personnel to protect themselves by reviewing subcontractor payroll records and ensuring compliance. • Bonding – Subcontractors will be required by GCs to obtain bonds to guarantee they can cover wages in order to protect the GC’s interest prior to beginning work. These cost increases will eventually be passed on in the form of higher construction costs to the homeowner, customer, and the taxpayer. With already tight profit margins, GCs and subcontractors in Illinois are looking for ways to control costs wherever possible. California and Maryland are not thriving because of wage protection laws, they are thriving in spite of them. Illinois’ economy, especially its construction sector, is much weaker and cannot take the weight of legislation like HB2838. For these reasons and more, HBAI is asking every member of the Illinois House of Representatives to Vote NO on HB2838 (Gong-Gershowitz). Please go to HBAI.org (VoterVoice link) right now, sign in, and send a letter of opposition to your State Representative. The letter is already written for you to send and its content is approved by the Home Builders Association of Illinois. We need everyone in this association and this industry to take action now! Page 4
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