United States: Illinois High Court Affirms Viability Of Construction Industry Classification Law

Last Updated: March 7 2014
Article by Michael G. Congiu and Amy D. Rettberg

The Illinois Supreme Court recently rejected a constitutional challenge by a roofing contractor who alleged the Illinois Employee Classification Act (ECA)1 violates procedural due process rights and is impermissibly vague. The ECA sets parameters for lawfully classifying workers as independent contractors in the construction industry in Illinois. The ECA also, through its latest procedural amendments made in January 2014, creates a mechanism for employers in the construction industry to challenge determinations that the ECA has been violated. Handed down six years after the ECA's original effective date, the Illinois Supreme Court's decision in Bartlow v. Costigan2means the ECA is here to stay.

The Employee Classification Act

The ECA was passed by the Illinois General Assembly on May 22, 2007, and went into effect on January 1, 2008. The stated purpose of the ECA is "to address the practice of misclassifying employees as independent contractors."3 Despite this broadly stated aim, as drafted, the ECA applies only to the construction industry, based on an identified practice of "some contractors misclassifying individuals as independent contractors in order to avoid payroll taxes, unemployment insurance contributions, workers' compensation premiums and minimum wage and overtime payments."4

The ECA sets forth a presumption that "an individual performing services for a contractor is deemed to be an employee of the employer," unless certain conditions are met.5 An individual is not deemed an employee if:

  • the individual has been and will continue to be free from control or direction over performing the service for the contractor, both under the individual's contract of service and in fact;
  • the service performed by the individual is outside the usual course of services performed by the contractor; and 
  • the individual is engaged in an independently established trade, occupation, profession or business; orthe individual is deemed a legitimate sole proprietor or partnership under subsection (c) of Section 10.6

It is considered an ECA violation for a contractor "not to designate an individual as an employee," unless the contractor is able to satisfy the above conditions of engagement.7 Contractors must post a summary of the ECA's requirements in English, Spanish, and Polish on their official web sites and in their offices.8 Contractors are also required to report annually to the Illinois Department of Labor all payments made to individuals who performed construction services for the contractor, but were not classified as employees.9

The ECA also includes penalty provisions and procedures for enforcement, which are discussed in more detail below.

The Bartlow Case

The plaintiffs in this case are general partners of a company in the business of installing siding, windows, seamless gutters, and roofs. Their co-plaintiffs are individuals who perform siding, window, and roof installation for the company—either as employees or independent contractors.

In September 2008, the Illinois Department of Labor notified the company it was being investigated for reported violations of the ECA. In February 2010, after reviewing 750 documents produced by the company and conducting telephone interviews with one of the plaintiffs and various individuals who had contracted with the company, the Department made a "preliminary determination" that the company had misclassified 10 individuals for work performed between 8 and 160 days in 2008, including the co-plaintiffs. The Department calculated a "potential penalty" of $1,683,000 for these violations, but also invited the company to file a response before the Department made its final determination. In March 2010 the Department sent the company notice of a second round of investigations to address newly alleged violations.

Shortly thereafter, the plaintiffs filed suit in the Circuit Court of Franklin County, Illinois, seeking to enjoin the Department from enforcing the ECA against them.  Plaintiffs further sought a declaratory judgment stating the ECA is unconstitutional, because it: (1) violates the special legislation clause of the Illinois Constitution; (2) is impermissibly vague in violation of the due process clauses of the U.S. and Illinois Constitutions; (3) does not provide a meaningful opportunity to be heard in violation of the due process clauses of the U.S. and Illinois Constitutions; (4) violates the prohibition against bills of attainder in the U.S. Constitution; and (5) violates the equal protection clauses of the U.S. and Illinois Constitutions because no other industry is subjected to the same standards when seeking to hire independent contractors.

The trial court denied plaintiffs' request for a temporary restraining order. On appeal, the appellate court reversed, holding the plaintiffs had "raised a 'fair question' concerning whether the Act violates procedural due process, because the Act and the procedures promulgated pursuant to the Act do not appear to provide an accused with a meaningful opportunity to be heard."10 The appellate court noted "it appears that the Department can levy significant fines, penalties, and sanctions merely upon its own determination that a violation of the Act has occurred, without ever affording the contractor a meaningful hearing."11 The appellate court declined to address the plaintiffs' remaining constitutional arguments, and remanded for entry of a temporary restraining order enjoining the Department from enforcing the ECA against the plaintiffs. 

On remand, the parties fully briefed the plaintiffs' constitutional claims. The trial court ruled in favor of the Department on all counts, including plaintiffs' procedural due process claim, noting the terms of the ECA did not prevent the Department from providing notice and an administrative hearing, and concluding the ECA therefore was not facially unconstitutional. The appellate court affirmed the trial court's holding, similarly focusing on the plaintiffs' procedural due process claim. The appellate court noted its concern that "the language of the statute grants the Department more than investigatory powers," but ultimately concluded that the Department "functions only in an investigative role . . . [with] no power to assess any fines or impose any sanctions," other than by suing in the circuit court.12 The Department interpreted its own enforcement authority under the ECA as extending only so far as seeking voluntary settlements with contractors or issuing "no-consequences" cease and desist orders. Under this accepted interpretation, the appellate court concluded that any contractor accused of violating the ECA would be afforded all of the due process protections available in a court of law. The appellate court further found the ECA was not unconstitutionally vague, was not an unlawful delegation of legislative power, and that "the legislature was free to limit the application of the Act to the construction industry without offending the equal protection clauses or violating the prohibition against special legislation." 

Detour on the Way to the Courthouse – Procedural Amendments to the ECA

On January 30, 2013, the Illinois Supreme Court granted the plaintiffs leave to appeal their constitutional claims. Less than a month later, on February 21, 2013, legislation was introduced in the Illinois General Assembly to amend the ECA by adding provisions for notice and a formal administrative hearing.  Public Act 98-106 was signed into law five months later on July 23, 2013, with an effective date of January 1, 2014.

Under the amended law, the Illinois Department of Labor is still authorized to conduct investigations in response to complaints of suspected violations.13 The Department may also (i) issue cease and desist orders, (ii) take reasonable actions to eliminate the effect of any violation, (iii) collect wages, salary, employment benefits, or other compensation due to the individual employee, and (iv) assess civil penalties.14

The amended procedures require the Department to notify a contractor, in writing, within 120 days of receiving a complaint (1) that a complaint has been filed; (2) the location and approximate date of the project or projects being investigated; (3) the names of the affected contractors; and (4) the nature of the allegations being investigated.15 If the Department concludes that a contractor has violated the ECA by misclassifying an employee as an independent contractor, or by retaliating against an individual for exercising his or her rights under the ECA, "the Department shall notify the employer, in writing, of its finding and any proposed relief due and penalties assessed and that the matter will be referred to an Administrative Law Judge to schedule a formal hearing in accordance with the Illinois Administrative Procedure Act."16 The employer then has 28 days to answer the allegations in the Department's findings, or the findings will be deemed admitted for the administrative law judge's final decision.17 An employer may seek to vacate a final decision if, within 30 days of the administrative law judge's final decision, the employer moves to vacate demonstrating good cause for its failure to timely answer the Department's allegations.18 The amended provisions further state the administrative law judge's final decision is subject to the Administrative Review Law, the governing statute for judicial review of an administrative agency decision.19 Finally, the amended statute also retains the original provisions for a private right of action against a contractor who has violated the ECA.20

The Illinois Supreme Court's Decision in Bartlow

The Illinois Supreme Court analyzed only two of the plaintiffs' constitutional arguments on appeal, finding the remaining arguments to have been under-developed and, therefore, forfeited.

Regarding the plaintiffs' procedural due process claim, the court noted that the ECA's pre-amendment enforcement provisions "have been completely replaced with a new enforcement process that includes notice, a formal hearing, and administrative review."21 Under these circumstances, the court declared that the plaintiffs' challenge to the ECA's pre-amendment enforcement provisions was moot. Because the court did not address the procedural due process claim on the merits, it vacated this non-reviewable portion of the appellate court's judgment. 

Regarding the plaintiffs' vagueness challenge, the court reviewed the statutory text of the exemptions in Sections 10(b) and 10(c), and concluded these provisions "are highly detailed and specific." The court further determined that a reasonably intelligent person would understand how to qualify for an exemption, and that the provisions "are sufficiently detailed and specific to preclude arbitrary enforcement."  Accordingly, the court affirmed the appellate court's judgment that Section 10 of the ECA is not unconstitutionally vague. The court was careful to note, however, its analysis was limited to the facial constitutional validity of the ECA, and the court pointedly addressed no "specific allegations of statutory compliance" regarding the plaintiffs.

Future Considerations

The Bartlow decision confirms the ECA's continued vitality in Illinois and sets the stage for future litigation on several factual issues that will arise, including:

  • Whether an individual is sufficiently "free from control or direction"
  • Whether an individual is "performing services" under the ECA
  • Whether an individual is engaged in work that is "outside the usual course of services performed by the contractor"

These factual issues will be driven not only by how companies memorialize their relationships with their contractors, but also by how these relationships will be carried out in practice. Striking the correct balance between ensuring quality control and maintaining the independence of true independent contractors may be a consistent challenge for employers subject to the ECA.

Although introducing specific notice and hearing provisions may prove vitally important, it is difficult to predict how employers' hearing rights will be carried out in practice.

Employers should review their independent contractor relationships with the help of experienced counsel with these themes in mind.


1 820 ILCS 185/1 et seq.

2 No. 2014 IL 115152 (Ill. 2014).

3 820 ILCS 185/3. 

4 56 Ill. Adm. Code 240.100(a); see also 820 ILCS 185/5 (defining a contractor for purposes of the ECA as an individual or legal entity "who engages in construction").

5 820 ILCS 185/10(a).

6 820 ILCS 185/10(b); see also 820 ILCS 185/10(c) (setting forth exemptions for "legitimate" sole proprietors and partnerships performing services for a contractor). 

7 820 ILCS 185/20. 

8 820 ILCS 185/15. 

9 820 ILCS 185/43.

10 Bartlow v. Shannon, 399 Ill. App. 3d 560, 570 927 N.E.2d 88, 97 (Ill. App. Ct. 5th Dist. 2010), appeal denied, 237 Ill. 2d 552 (2010) (table). 

11 Id. at 572.  

12 Bartlow v. Costigan, 2012 IL App (5th) 110519, ¶¶ 50-51, 974 N.E.2d 937, 949 (Ill. App. Ct. 5th Dist. 2012). 

13 See generally 820 ILCS 185/25(a). 

14 See 820 ILCS 185/25(b); see also Section 40 (Penalties); Section 42 (Debarments); and Section 45 (Willful Violations). 

15 820 ILCS 185/25(a). 

16 820 ILCS 185/25(c). 

17 820 ILCS 185/25(d). 

18 Id

19 820 ILCS 185/25(e). 

20 See 820 ILCS 185/60.

21 Bartlow, No. 2014 IL 115152 ¶ 35.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Michael G. Congiu
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions