Illinois Developer, Sub-Contractors Ordered to Pay $1.1M for Prevailing Wage Violations
Northbrook, Ill., Senior Housing Project Found to Have Underpaid Union Carpenters in 2018
The Illinois Department of Labor is requiring the developer of a senior living center in Northbrook, Ill., and two subcontractors to pay more than $1.1 million back to workers for failing to meet state-certified prevailing wage and benefit rates during its construction in 2018. It's the biggest payback reward in the history of the Chicago Regional Council of Carpenters, the union that brought a legal action against the developer and subcontractors.
The case involves the Lodge of Northbrook, a 164-unit senior living community development funded by bonds issued through the Illinois Finance Authority, a statewide agency created by the Illinois legislature in 2004 to provide low-cost capital to development projects. The IFA replaced seven predecessor state-funding entities when it was created. The Lodge of Northbrook’s developer is Essex Corp. of Omaha, Neb. Its general contractor was McShane Construction Corp. of Rosemont, Ill. Its carpentry contractor is Horizon Carpentry, Inc., and its drywall contractor was Russ’s Drywall, Inc., both of nearby Elgin, Ill. The Illinois Department of Labor ordered the subcontractors to provide back pay to their employees after the CRCC filed charges alleging violations of the Illinois Prevailing Wage Act in 2018 during the third phase of construction on the Lodge at Northbrook.
According to the Illinois Department of Labor's ruling, Horizon will be forced to pay its workers an additional $692,000, Russ’s will be forced to pay an additional $249,000 and Essex has to pay a penalty of $188,000.
"Wage theft and the loss of tax revenue affects everyone,” said CRCC Executive Secretary-Treasurer Gary Perinar. “It takes advantage of workers, many of whom are unaware of their right to receive fair wages and benefits for themselves and their families. It puts signatory union contractors at a disadvantage for competitively bid projects and it cheats communities out of tax dollars to increase future growth, new projects and public services. Thanks to our research team for discovering this injustice and to the Department of Labor for enforcing the law."
Illinois' Prevailing Wage Act requires contractors and subcontractors to pay laborers, workers and mechanics employed on public works construction projects no less than the general prevailing rate of wages (consisting of hourly cash wages plus fringe benefits) for work of a similar character in the county where the work is performed. The CRCC filed charges against McShane Construction Company and its subcontractors in early 2018 but they were not investigated under former Gov. Bruce Rauner (R) despite the Illinois Finance Authority issuing bonds to fund the project. The investigation of the Lodge at Northbrook project began after new Illinois Gov. J.B. Pritzker (D) took office in January.
“We appreciate Gov. J.B. Pritzker’s Department of Labor for addressing wage theft with the seriousness it deserves,” Perinar said. “This is the largest back pay award we’ve facilitated in our Council’s history. We have a new department dedicated to combating wage theft and are putting unscrupulous contractors on notice that cheating workers and taxpayers will not be tolerated.”
Horizon Carpentry and Russ's Drywall did not immediately return messages for comment on the ruling. Essex Corp. said it had no comment and referred all questions to its counsel.