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County Board looking to challenge prevailing wage rates

Published: Thursday, June 26, 2014 3:51 p.m. CDT • Updated: Thursday, June 26, 2014 10:35 p.m. CDT

WOODSTOCK – The McHenry County Board wants to gauge interest among other county governments to challenging the local prevailing wage mandated upon them by the state.

The move comes after the County Board voted last week, 13-10, against adopting the wage schedule they are required by law to follow. Prevailing wage requires all contractors and subcontractors for works built by any public body with public funds to be paid the hourly rate set by the Illinois Department of Labor for that county.

Because the rates are typically based on union wages, local governments have long complained that prevailing wages are significantly higher than the local median and drive up the cost of taxpayer projects.

"It's unrealistic in the workplace," County Board Chairwoman Tina Hill, R-Woodstock, said Wednesday. "What does prevailing mean? It means what everyone else is doing. No one's being paid that kind of money."

The County Board isn't alone. The Woodstock City Council earlier this month also rejected the prevailing wage ordinance on similar principle, only to approve it at the following meeting out of fear of possible legal ramifications, and Cary School District 26 in 2012 rejected it on a 3-3 tie. The governments of Mount Prospect and Palatine also declined this year to approve their ordinances.

But while governments are required by law to pass an annual ordinance approving the rates set for their county, there is no real penalty for not doing so because the state requires the wages to be paid and essentially sets the wage for them. The penalty comes in not paying the prevailing wage – government officials who violate the prevailing wage law are guilty of a Class A misdemeanor, and the government can be subjected to significant fines.

Illinois passed its prevailing wage law in 1941 as a mechanism to ensure that labor disputes did not delay or cease public works projects altogether, and to ensure that workers' jobs were not threatened by itinerant labor. In subsequent years it was meant to protect the wages and benefits of workers from being slashed by employers competitively bidding for government projects.

Because Illinois' prevailing wage ordinances are based in large part on union rates, critics have pointed to the declining role of unions in the construction sector – unions represented about 14 percent of construction workers in Illinois in 2013, according to the U.S. Bureau of Labor Statistics.

The prevailing wage law contains a provision in which the wages can be challenged by a hearing. Hill said she has reached out to the McHenry County Economic Development Corp. and the McHenry County Council of Governments to determine how to go about it. In the likely event that an outside study is required, Hill said she would like to have other governments chip in, seeing as how they all would benefit from a successful outcome.

Palatine village leaders are looking to work with their representatives in Springfield and their municipal lobbying group to change the prevailing wage law, but the odds of such an initiative moving forward in the labor-friendly General Assembly are slim.

Thirty-two states have prevailing wage laws, according to the U.S. Department of Labor. Illinois is one of nine that requires prevailing wage be applied to all projects. The rest have cost thresholds of varying amounts.

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