Can an Illinois county, municipality, or school district opt out of the Prevailing Wage Act by ordinance, resolution, or local referendum?
Plain-English summary
The same two committee chairs who asked about local right-to-work also asked whether Illinois counties, municipalities, and school districts can opt out of the Prevailing Wage Act, either by ordinance or by a local referendum.
AG Lisa Madigan's answer was no, and the analysis was largely controlled by an existing Illinois Supreme Court decision. In People ex rel. Bernardi v. City of Highland Park, 121 Ill. 2d 1 (1988), the Court held that compliance with the Prevailing Wage Act is "a matter pertaining to statewide, and decidedly not local, government or affairs." A home rule unit cannot use its home rule authority to suspend the PWA, because the matter does not pertain to its government and affairs under article VII, section 6(a). The court reasoned that one municipality's avoidance of the PWA could "profoundly depress the prevailing wage" in the entire county, that wage regulation has traditionally been a state function, and that a fragmented local labor policy would create a "confederation of modern feudal estates."
Non-home-rule units, school districts, and other political subdivisions get even less. They have only the powers expressly granted by the Constitution or by statute (article VII, sections 7 and 8), and no Illinois statute authorizes them to opt out of the PWA. The opinion noted that where the General Assembly has wanted to exempt a public body or specific project from the PWA, it has said so expressly (the Adopt-A-Park program in 20 ILCS 805/805-40 was the example).
A local referendum was no escape. No constitutional or statutory provision authorizes a binding referendum on PWA opt-out, and section 28-6 advisory referenda would have no legal effect.
Currency note
This opinion was issued in 2015. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Common questions
Q: What does the Prevailing Wage Act do?
A: It requires that workers on public works projects in Illinois be paid no less than the "general prevailing rate of hourly wages" in the locality. The Act applies to "public bodies" (broadly defined to include the State, every county, city, town, village, township, and school district) when they construct or demolish public works, including projects paid for in whole or in part with public funds.
Q: How is the prevailing rate determined?
A: Each public body either ascertains the prevailing rate itself in June of each year (and posts the result and files it with the Illinois Department of Labor by July 15) or relies on the Department's countywide determination. The Department of Labor ascertains the rate for every county. If a public body fails to investigate, the Department's countywide rate applies by default. 820 ILCS 130/9.
Q: What happens if a public body skips the prevailing wage?
A: A contract awarded without the required prevailing-wage prerequisites is "void as against public policy" (820 ILCS 130/11). Any officer, agent, or representative of a public body who willfully violates or fails to comply with the Act is guilty of a Class A misdemeanor (820 ILCS 130/6).
Q: Why doesn't home rule reach the PWA?
A: Under the test in Bernardi, home rule covers matters pertaining to the unit's government and affairs, and the Court applied a three-factor analysis: (1) whether the conduct affected matters outside the municipality, (2) the traditional role of municipal versus state regulation, and (3) which level of government had the more vital interest. On all three factors the Court found wage regulation was a statewide concern. One municipality's PWA avoidance would depress wages in the entire surrounding locality, the field has long been a state matter, and the State has a far more vital interest in maintaining uniform labor policy.
Q: Can a non-home-rule county opt out?
A: No. Non-home-rule counties have only the powers expressly given by statute (Ill. Const. 1970, art. VII, § 7), and no statute grants opt-out authority. Even apart from Bernardi, the answer would be no.
Q: What about school districts?
A: School districts have only those powers granted by law (Ill. Const. 1970, art. VII, § 8). The PWA's definition of "public body" includes "every * * * school district." There is no statutory opt-out. The PWA applies.
Q: Are there any statutory exceptions to the PWA?
A: A few, and the General Assembly has been explicit when it has carved them out. The opinion's example was the Adopt-A-Park program at 20 ILCS 805/805-40, where the Department of Natural Resources can use volunteers and the PWA "shall not apply."
Background and statutory framework
The Prevailing Wage Act's purpose, as section 1 declares, is that "a wage of no less than the general prevailing hourly rate as paid for work of a similar character in the locality in which the work is performed, shall be paid to all laborers, workers and mechanics employed by or on behalf of any and all public bodies engaged in public works." The Illinois courts have explained the policy as protecting both an "impoverished work force" and the integrity of the collective bargaining process by preventing wage undercutting in the private construction sector.
The constitutional architecture matters. Home rule under article VII, section 6 is broad ("any power and perform any function pertaining to its government and affairs"), but the Illinois Supreme Court has carved out areas of "statewide concern" where home rule authority does not reach. StubHub, Palm, and earlier cases established that doctrine, and Bernardi applied it to the PWA.
For non-home-rule local governments, the constitutional rule is the inverse: only what is expressly given. School districts get even less leeway. So the practical reach of Bernardi is broad: every public body in Illinois (with the rare statutory exemptions the General Assembly has written) is bound by the PWA on public works projects.
Citations and references
Statutes:
- Ill. Const. 1970, art. VII, §§ 6, 7, 8
- 820 ILCS 130/0.01 et seq. (full Act); 130/1, 130/2, 130/3, 130/4(a), 4(a-1), 130/5, 130/6, 130/9, 130/11
- 20 ILCS 805/805-40
- 10 ILCS 5/28-6
Cases:
- People ex rel. Bernardi v. City of Highland Park, 121 Ill. 2d 1 (1988)
- County of Cook v. John Sexton Contractors Co., 75 Ill. 2d 494 (1979)
- City of Oakbrook Terrace v. Suburban Bank & Trust Co., 364 Ill. App. 3d 506 (2006)
- Palm v. 2800 Lake Shore Drive Condominium Ass'n, 2013 IL 110505
- Peoples Gas Light & Coke Co. v. City of Chicago, 125 Ill. App. 3d 95 (1984)
- City of Chicago v. StubHub, Inc., 2011 IL 111127
- People ex rel. Department of Labor v. Sackville Construction, Inc., 402 Ill. App. 3d 195 (2010)
- Inland Land Appreciation Fund, L.P. v. County of Kane, 344 Ill. App. 3d 720 (2003)
- Village of Sugar Grove v. Rich, 347 Ill. App. 3d 689 (2004)
- State ex rel. Evans v. Moore, 69 Ohio St. 2d 88 (1982)
Source
- Landing page: https://illinoisattorneygeneral.gov/opinions/
- Original PDF: https://illinoisattorneygeneral.gov/dA/b3283f8701/2015%2015-002%20LABOR%20Authority%20of%20Counties%20%2C%20Municipalities%2C%20and%20School%20Districts%20Opt%20Out%20Prevailing%20Wage%20Act.pdf
Original opinion text
Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.
OFFICE OF THE ATTORNEY GENERAL
STATE OF ILLINOIS
Lisa Madigan
ATTORNEY GENERAL
March 20, 2015
FILE NO. 15-002
LABOR:
Authority of Counties, Municipalities, and School Districts to Opt Out of the Prevailing Wage Act
The Honorable Gary Forby
Chair, Senate Labor Committee
State Senator, 59th District
903 West Washington, Suite 5
Benton, Illinois 62812
The Honorable Jay C. Hoffman
Chair, House Labor & Commerce Committee
Dear Senator Forby and Representative Hoffman:
I have your letters inquiring whether counties, municipalities, and school districts have the authority to opt out of compliance with the Prevailing Wage Act (the PWA) (820 ILCS 130/0.01 et seq. (West 2012)). The Illinois Supreme Court has specifically addressed this issue with regard to home rule units of government and held that they must comply with the requirements of the PWA. Based on that decision and the limited authority of non-home-rule units of government, it is my opinion that they also are required to comply with the provisions of the PWA when seeking bids and awarding contracts for the construction or demolition of public works. Thus, counties, municipalities, and school districts do not possess the authority, either by the adoption of ordinances or resolutions that depart from the requirements of the PWA, or by referendum, to avoid compliance with its provisions.
BACKGROUND
The purpose of the PWA is to encourage the efficient and expeditious completion of public works by ensuring that workers receive a decent wage. People ex rel. Department of Labor v. Sackville Construction, Inc., 402 Ill. App. 3d 195, 198, 930 N.E.2d 1063, 1065 (2010), appeal denied, 237 Ill. 2d 589, 938 N.E.2d 530 (2010). To that end, section 1 of the PWA (820 ILCS 130/1 (West 2012)) states:
It is the policy of the State of Illinois that a wage of no less than the general prevailing hourly rate as paid for work of a similar character in the locality in which the work is performed, shall be paid to all laborers, workers and mechanics employed by or on behalf of any and all public bodies engaged in public works.
Further, section 3 of the PWA (820 ILCS 130/3 (West 2012)) provides that not less than the "general prevailing rate of hourly wages" must be paid to laborers, workers, and mechanics who are employed by or on behalf of a public body engaged in the construction or demolition of public works. The term "public works" includes "all fixed works constructed or demolished by any public body, or paid for wholly or in part out of public funds." 820 ILCS 130/2 (West 2013 Supp.). The PWA defines "public body" as the State or any officer, board or commission of the State or any political subdivision or department thereof, or any institution supported in whole or in part by public funds, and includes every county, city, town, village, township, school district, irrigation, utility, reclamation improvement or other district and every other political subdivision, district or municipality of the state.
The PWA requires that a call for bids for a public works project must specify that prevailing wages are to be paid. 820 ILCS 130/4(a-1) (West 2012). Each public body awarding a public works contract or otherwise undertaking any public works has the option of either ascertaining the general prevailing rate of hourly wages in the locality in which the work is performed or requesting that the Illinois Department of Labor ascertain and certify the prevailing rate of hourly wages. 820 ILCS 130/4(a) (West 2012). Any contract for public works awarded when such prerequisites have not been met "shall be void as against public policy[.]" 820 ILCS 130/11 (West 2013 Supp.).
ANALYSIS
Home Rule Units
Home rule units may exercise not only the powers delegated by statute, but also those powers granted by article VII, section 6, of the Illinois Constitution of 1970, which authorizes a home rule unit to "exercise any power and perform any function pertaining to its government and affairs[,]" except to the extent that home rule powers have been limited pursuant to section 6.
Under the multi-step analysis used by the Illinois courts, a home rule ordinance is a valid exercise of home rule power if: (1) the subject of the ordinance pertains to the home rule unit's "government and affairs"; and (2) the General Assembly has not expressly preempted the exercise of home rule powers. The General Assembly has not expressly limited or preempted the exercise of home rule powers in the PWA. The sole issue, therefore, is whether an ordinance opting out of the PWA "pertain[s] to [the] government and affairs" of the unit of local government, within the meaning of article VII, section 6(a), of the Constitution.
In People ex rel. Bernardi v. City of Highland Park, 121 Ill. 2d 1, 520 N.E.2d 316 (1988), the Illinois Supreme Court squarely addressed the issue of whether a home rule municipality must comply with the requirements of the PWA when seeking bids and awarding contracts for public works projects. In deciding whether the city was exercising a power pertaining to its government and affairs, the Court considered the following factors: (1) the extent to which the conduct in question affected matters outside the municipality; (2) the traditional role of municipal versus state regulation in the field; and (3) which level of government had the more vital interest in that regulation.
The Court determined that the city's failure to comply with the PWA affected individuals outside of the city because the prevailing wage is determined by reference to wages paid on public works projects within the entire locality. Thus, one municipality's avoidance of its obligations under the PWA "could profoundly depress the prevailing wage" in the entire county and reduce earnings of workers outside the municipality's boundaries.
Turning to the second factor, the Court concluded that the prevailing wage law fell within a field traditionally regulated by the State. Establishing minimum requirements to attain those goals and to otherwise improve working conditions has traditionally been a matter of State concern, outside the power of local officials to contradict.
Finally, with respect to the third factor, the Court concluded that the State has a more vital interest in prevailing wage regulation than local governmental units. The Court warned that allowing home rule authorities to govern their local labor conditions would create "a confederation of modern feudal estates" and that "[t]he disintegration of uniform labor rights and standards under State law would certainly follow the breakup of State monopoly in this field."
Accordingly, the Court held that "[c]ompliance with the Prevailing Wage Act is a matter pertaining to statewide, and decidedly not local, government or affairs." Bernardi, 121 Ill. 2d at 16. Therefore, because the regulation of wages on public works projects is not a proper subject for the exercise of home rule powers, the Court found that home rule municipalities are required to comply with the PWA's requirements.
Bernardi is dispositive of the question of whether home rule legislation may supersede the PWA's requirements. Accordingly, home rule powers do not extend to the adoption of local ordinances or resolutions purporting to supersede the provisions of the PWA.
Non-Home-Rule Units
In contrast to home rule units, non-home-rule counties and municipalities may exercise only those powers that have been expressly granted to them by the Constitution or by statute, together with those powers that are necessarily implied therefrom to effectuate the powers that have been expressly granted. Ill. Const. 1970, art. VII, §7. Similarly, school districts "shall have only [the] powers granted by law." Ill. Const. 1970, art. VII, §8. Given Bernardi's holding regarding home rule units, it is clear that non-home-rule units may not adopt ordinances opting out of compliance with the PWA either.
Even without considering Bernardi, no constitutional or statutory provisions either expressly or impliedly authorize counties, municipalities, or school districts to adopt ordinances or resolutions opting out of the coverage of the PWA. Where the General Assembly has intended to exclude a public body or a specific public works project from the PWA, it has done so by express statutory provision. See, e.g., 20 ILCS 805/805-40 (West 2012) (Adopt-A-Park program). Further, there are no constitutional or statutory provisions authorizing local referenda relating to the applicability of the PWA. Accordingly, non-home-rule units and school districts do not have the authority to opt out of the PWA's provisions either by the adoption of an ordinance or resolution or by the passage of a referendum.
CONCLUSION
For the reasons stated above, it is my opinion that all counties, municipalities, and school districts must comply with the provisions of the Prevailing Wage Act when seeking bids and awarding contracts for public works projects. Neither home rule nor non-home-rule units have the authority to opt out of compliance with its requirements by the adoption of an ordinance or resolution or pursuant to referendum.
Very truly yours,
LISA MADIGAN
ATTORNEY GENERAL