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Illinois contractors and builders oppose HB 5412, it will harm small businesses

SPRINGFIELD -- Opponents say a proposed amendment by House Leader Marcus Evans (D-Chicago) that passed the House Labor Committee back on February 16th is terrible for female and minority-owned businesses, as well as union and non-union construction firms in Illinois.

As written, the amendment to HB 5412 would require general contractors to pay the wages of a subcontractors’ employees, even if the prime contractor has already paid the subcontractor in full. However, those opposed to the bill say the measure would do the exact opposite.

"Opponents feel it would do nothing to prevent Wage Theft, but only encourage it by allowing rogue subcontractors to get off the hook by not paying their workers," states a press release from Black Contractors Owners & Executives/Hispanic American Construction Industry Association this week. According to the release, payment for wages will become "the responsibility onto the prime contractor, while allowing these bad apples to move onto the next job and underbid legitimate contractors since they have no payroll costs."

The Federation of Women Contractors, an advocacy organization that protects the interests of women-owned construction firms said that should HB5412 passes, it would be damaging to her members and result in many of them going out of business.

"For our members who are small businesses, any increase in cost has a catastrophic impact on the financial health of their companies and their ability to compete in the marketplace," said Jaemie Neely, Executive Director for the association. "We oppose HB5412 because it would not prevent or deter unethical subcontractors from stealing wages from their employees but rather the bill would expose general contractors to a risk of having to pay twice for wages and we think our alternative amendment is a much better solution."

Fourteen other professional organizations, from the building industry to mechanical contractors, are fighting the proposal that has the backing of the Mid-America Carpenters Regional Council.

The Associated Builders & Contractors, Black Contractors Owners & Executives, Chicago Chamber of Commerce, Chicago & Downstate Roofing Contractors Association, Chicago Area General Contractors, Hispanic American Construction Industry Association, Home Builders Association of IL, IL Chamber of Commerce, IL Chemical Industry Council, IL Construction Industry Council, IL Manufacturers Association, Il Mechanical & Specialty Contractors Association, IL Road & Transportation Builders Association, and the Women’s Construction Owners & Executives are against HB 5412.

Jacqueline Gomez, Executive Director of Hispanic American Construction Industry Association said HB 5412 would lock out future entrepreneurs from the construction industry and increase the costs for clients. "Punishing good companies for a few bad apples is a bad idea."

The committee asked the sponsor for additional revisions before HB 5412 goes in front of the house for a final vote.

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