Bill
HB 2794
The bill imposes joint and several liability on developers, general contractors, and subcontractors for misclassifying workers, requiring proof of legitimate independent contractor
Status & key dates
- Jurisdiction: Illinois (104th General Assembly). Bill introduced by Representative Edgar González, Jr. (filed with Clerk 02/05/2025; introduced 02/06/2025).
- Committee/action history: First reading 02/06/2025; assigned to Judiciary − Civil Committee (03/04/2025); re-referred under Rule 19(a) to Rules Committee (03/21/2025); withdrawn from schedule (04/29/2025).
- Bill amends the Employee Classification Act (820 ILCS 185) — Sections 5, 10, 20, 25, 35, 40, 42, 45, 55, 60, 63, and 990.
Purpose / intent
- To reduce worker misclassification in the construction industry and to hold upstream parties (developers and general contractors) accountable when subcontractors misclassify workers as independent contractors rather than employees.
Primary provisions and changes
- Joint and several liability: A developer, general contractor, and subcontractor are made jointly and severally liable for a subcontractor’s failure to properly classify persons performing services as employees — unless specified statutory conditions (defenses or compliance steps) are satisfied.
- Prohibition on using violators: It is a violation for a developer or general contractor to utilize a subcontractor at any tier who commits a violation of the Employee Classification Act, unless the upstream party satisfies the statutory conditions that exempt them from liability.
- Definitions expanded/clarified: Key terms such as “Construction,” “Contractor,” “Developer,” “Employer,” “Entity,” “Interested party,” and “Performing in services” are defined or clarified to cover construction-related activities and the parties involved.
- Employee presumption and independent contractor tests (Section 10): Individuals performing services for a contractor are presumptively employees unless the contractor demonstrates:
1. freedom from control/direction over performance (contractually and in fact);
2. the service is outside the contractor’s usual course of business; and
3. the individual is engaged in an independently established trade, occupation, profession, or business.
- Criteria for legitimate sole proprietors/partnerships: The bill lists multiple indicia (e.g., control over means and manner; ownership of capital goods; availability of services to the public; tax reporting as a business; licensing where required; furnishing tools/equipment; hiring and paying employees; bearing profits/losses) to determine whether a subcontractor operating as a sole proprietor/partnership is legitimately independent.
Who is affected
- Directly: developers, general contractors, subcontractors at all tiers, sole proprietors/partnership subcontractors, and workers in construction trades.
- Indirectly: owners of projects, construction employers, labor unions, worker centers, the Illinois Department of Labor (administration/enforcement), and parties engaging in contracting or procurement practices.
- Small contractors and independent tradespeople may face greater scrutiny and administrative burden to document independent-contractor status.
Likely impacts
- Increased upstream accountability: Developers and general contractors will have incentives to conduct due diligence and ensure subcontractors properly classify workers to avoid joint liability.
- Compliance costs: Contractors may face higher administrative and legal costs (contract vetting, audits, documentation, changes to subcontractor selection).
- Worker protections: Potential reduction in misclassification could expand employee protections (wage/safety/tax benefits) for construction workers.
- Dispute and enforcement activity: Likely increase in audits, civil claims, and Department of Labor enforcement actions; possible litigation over whether parties met the statutory defenses.
- Business behavior: Some contractors may restrict use of small subcontractors or require stronger indemnities/insurance.
Notes
- The bill text printed is partial; some referenced “specified conditions” and enforcement/penalty details are not fully reproduced here. The bill was withdrawn from schedule as of 04/29/2025; consult the legislature’s docket or the full bill text for final language and any subsequent amendments.
(Also: the provided document included an unrelated Arizona HB 2794 amendment to ARS 16‑447 about programming accessible voting devices to show all ballot styles statewide; that is a separate bill in a different state.)
Compiled from official sources — confirm details with the bill’s official record.
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