Illinois has some of the strictest employment laws in the nation. A recent decision by the Illinois Supreme Court will now ensure that those laws stay that way. Misclassifying an employee in Illinois may end up costing business owners everything.
According to Lexology, the Bartlow v. Costigan case arose when Jack’s Roofing, a small construction firm, was found to have misclassified 10 workers as independent contractors instead of employees. The Illinois Department of Labor calculated the company’s potential penalty for this offense as $1.6 million. In the face of this financial disaster, Jack’s Roofing challenged the law as unconstitutional. The company argued that there was a lack of due process and equal protection and stated that the law violates Illinois Constitution’s special legislation clause because the construction industry is held to more stringent employment standards than other industries. The Illinois Supreme Court has now rejected all challenges and upheld the law as valid.
The Illinois Employee Classification Act (ECA) differs from misclassification laws in other states in that it carries the presumption of employment beyond just individuals. This means that small businesses such as sole proprietorships and partnerships can be deemed individuals and subjected to a general ABC test, unless an additional test shows that the sole proprietorship or partnership is truly a self-sustaining independent entity. In order to satisfy this additional test, the entity must meet 12 factors, including that it has made a substantial investment in capital beyond ordinary tools and personal vehicle. It must also make its services available to the general public and hire any additional employees without the contractor’s approval.
Violations of the ECA can be a costly affair. If your small business has been accused of an ECA or other employment violation, it is important that you have a qualified attorney on your side. Contact the experienced Illinois employment attorneys at The Miller Law Firm, P.C. We can help ensure that you are fairly represented and can help mitigate any fines you may be facing.