IPA Power Hour 4—Prevailing Wage and Project Labor Agreements

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IPA Power Hour 4—Prevailing Wage

and Project Labor Agreements

May 23, 2024

Agenda

1. Introductions and Housekeeping

2. IDOL Department Overview

3. Discussion on Prevailing Wage Law & Project Labor Act

4. Long-Term Plan

5. IPA Wage Requirements & Renewable Projects

6. Q&A

IPA Power Hour Webinars

• Today’s Power Hour:

• Explore Prevailing Wage Law and Project Labor Act in Illinois. The webinar will also look

into prevailing wage and project labor agreements for renewable energy projects

participating in the IPA renewable energy programs and procurements.

Power Hour is a series of educational and informative presentations on a wide range of

clean energy topics and emerging issues.

• Power Hour webinar series started in 2021.

• To-date, the Agency has hosted 31 Power Hour webinars.

• Invited energy thought leaders and experts locally and nationally.

WEBINAR ARCHIVES: https://ipa.illinois.gov/about-ipa/ipa-events/previous-

power-hour-events.html

Illinois Department of Labor

Background on Prevailing Wage & PLAs

Agenda

I. Department overview

II. Prevailing Wage overview

III. Project Labor Agreement (PLA) overview

Mission statement

The mission of the Illinois Department of Labor is to

protect and promote the wages, welfare, working

conditions, and safety of Illinois workers by enforcing

State labor and employment laws, providing compliance

assistance to employers, and increasing public

awareness of workplace protections.

About IDOL

 Charged with enforcing laws protecting workers’ rights on the job.

 Enforce about 25 different workplace protections and safety

standards with offices in Chicago, Springfield, and Marion.

 Currently 4 labor law enforcement divisions: Fair Labor

Standards; Conciliation and Mediation; Leave Rights and IL

OSHA.

 Fun fact: IDOL also inspects carnival and amusement attractions!

Email: DOL.PaidLeave@illinois.gov

PWA Requires

Contractors and subcontractors must pay workers

employed on covered public works projects no less than

the general prevailing rate of wages (hourly cash wages

plus fringe benefits) for work of similar character in the

locality where the work is performed.

What are Public Works?

• All fixed works constructed by any public body.

• Work financed in whole OR part with public funds, including but

not limited to general revenue funds; capital funds; bonds; grants;

and loans.

• Renewable energy projects required to pay prevailing wage

pursuant to the Illinois Power Agency Act.

• Construction projects performed by a third-party contracted by any

public utility.

What are “prevailing” wages?

• Rates that “prevail” for each craft and trade ascertained in June.

• New rates, by trade and county, published to IDOL website each

July.

• Section 9 hearings to challenge any rate determination.

• New trade classifications established through admin hearing

process.

What are IDOL’s Duties?

• Ascertain and post prevailing wages through the annual survey

process.

• Collect certified transcripts of payroll records through online

portal.

• Issue required workforce data reports.

• Take and investigate complaints of prevailing wage

noncompliance and collect back wages and penalties for

workers

Prevailing Wage Act – Payroll Records

Certified transcript of payroll (820 ILCS 130/5)

• Any contractor and each subcontractor who participate in a public

works project must make and maintain time and payroll

records for five years. This includes time records, check

stubs/direct deposit records, and payroll summaries.

• Certified transcript of payroll must be filed in the Department’s

online database.

• Members of the public may create account to upload or search:

https://labor.illinois.gov/laws-

rules/conmed/certifiedtranscriptofpayroll.html

Certified Transcript of Payroll

Workforce Data Reporting

• Various laws requires IDOL to analyze certified transcript of

payroll to report on workforce characteristics on public works

projects:

- IL Works report

- Clean Energy project report to Illinois Power Agency

- PA 103-347 will require quarterly reporting after 1/1/24

Prevailing Wage Act - Enforcement

• IDOL receives complaints and conducts investigations.

• Violators pay workers the difference between the wage paid

and the prevailing wage.

• Majority of investigations resolved informally.

• Contractors may be subject to penalties, punitive damages,

and debarment.

Project Labor Agreements

A Project Labor Agreement (PLA) is:

• A form of pre-hire collective bargaining agreement

• Covers all terms and conditions of employment on a

specific project

• Contractor who wins a bid must sign letter of assent to

PLA

• Contractor does not have to be unionized but must

comply with CBAs and other terms and conditions

established through PLA for life of the contract.

IL Project Labor Agreement Act

Pursuant to this Act, any project labor agreement shall:

(a) Set forth effective, immediate, and mutually binding procedures for resolving

jurisdictional labor disputes and grievances arising before the completion of work.

(b) Contain guarantees against strikes, lockouts, or similar actions.

(d) For minorities and women as defined under the Business Enterprise for Minorities,

Women, and Persons with Disabilities Act, set forth goals for apprenticeship hours to be

performed by minorities and women and set forth goals for total hours to be performed by

underrepresented minorities and women.

(e) Permit the selection of the lowest qualified responsible bidder, without regard to union

or non-union status at other construction sites.

(f) Bind all contractors and subcontractors on the public works project through the inclusion

of appropriate bid specifications in all relevant bid documents.

(g) Include such other terms as the parties deem appropriate.

Project Labor Agreements

• Typical use: large scale, complex projects; need for

technical or safety expertise; “predictable costs and

steady supply of skilled labor” over an extended period of

time.

• Seminal case: Building and Construction Trades Council

of Metropolitan District v. Associated Builders and

Contractors of Massachusetts/Rhode Island Inc., 507

U.S. 218 (1993) (“Boston Harbor”)

• Enforced pursuant to terms set forth in the PLA (no public

enforcement)

Prevailing Wage and Project Labor Agreement

for IPA Renewable Energy Projects

Kelly Turner

Chief Legal Counsel, Illinois Power Agency

• Independent State Agency created in 2007

• Agency duties include

• Development and implementation of procurement plans

for electricity supply for utility customers

• Development and implementation of other renewable

energy programs

• Development of the Long-Term Renewable Resources

Procurement Plan

• Implement programs and run procurement events to incentivize

the development of new renewable energy resources

The Illinois Power Agency

Long-Term Renewable Resources

Procurement Plan

Long-Term Renewable Resources Procurement Plan

• Details of the RPS are outlined in the Agency’s Long-Term

Plan

• Approved by Illinois Commerce Commission

• ICC Docket No. 23-0714, Final Order entered February 20, 2024

• Long-Term Plan details programs and procurements which

incentivize the development of new renewable resources

through the purchase of Renewable Energy Credits (RECs)

• Competitive procurements

• Illinois Solar for All

• Illinois Shines

• Self-direct Program

• Large customers receive an offset of RPS charges from utility for

retirement of RECs from new utility-scale developments

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Prevailing Wage Requirements

Under the IPA Act

Prevailing Wage Requirements

• Prevailing Wage applies to most projects receiving state-

administered funding through a REC Contract

• Provisions under the Prevailing Wage Act – 820 ILCS 130/2

• “Public Works” definition includes “renewable energy projects required to pay the

prevailing wage pursuant to the Illinois Power Agency Act.”

• Provisions under the Illinois Power Agency Act – 20 ILCS 3855/1-

75(c)(1)(Q)(1)

• Utility-scale wind and solar; hydropower; brownfield solar projects

• Projects incentivized Illinois Shines Program with exceptions

• Provisions under the IPA Act – 20 ILCS 3855/1-56(b-15)

• Projects incentivized under Illinois Solar Program with exceptions

• Provisions under the IPA Act – 20 ILCS 3855/1-75(c)(1)(R)(2)(vii)

• Projects participating in the Self-direct Program

Prevailing Wage Requirements

• Renewable energy projects required to pay the prevailing

wage pursuant to the Illinois Power Agency Act

• 20 ILCS 3855/1-75(c)(1)(Q)(1) – eff. 9/15/21

• Utility-scale wind

• Utility-scale solar

• Brownfield site photovoltaics

• Projects participating in the Self-direct Renewable Portfolio Standard Compliance

Program

• Projects incentivized Illinois Shines Program with exceptions

• 20 ILCS 3855/1-56(b-15) – eff. 6/30/23

• Projects incentivized under Illinois Solar Program with exceptions

Exceptions to Prevailing Wage

• Certain project types are exempt from PW under IPA

Act:

• Illinois Shines and Illinois Solar for All projects:

• Projects serving residential buildings (single-family or multi-family)

• Projects no more than 100kW in size that serve "houses of worship"

• Illinois Shines Large DG projects waitlisted as of Dec 14, 2021

• Illinois Shines projects constructed prior to September 15, 2021

• Illinois Solar for All projects that went under contract prior to June

30, 2023

• Self-direct projects with a REC Contract entered into prior to

September 15, 2021

Compliance with Prevailing Wage

• Illinois Shines and Solar for All

• Attestation in project applications

• Copies of CTPs submitted to IDOL required

• CTPs available in IDOL database

• Applies to construction, maintenance, repairs

• Applies to Approved Vendors, contractors,

subcontractors

Compliance with Prevailing Wage

• Competitively-bid REC Contracts

• Commitment to pay prevailing wage made during the

bid process

• Any out-of-state project must comply with local

prevailing wage or applicable Davis-Bacon wages

• Self-direct Program

• Applications must demonstrate that projects were

built in compliance with prevailing wage

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Project Labor Agreement

Requirements Under the IPA Act

Project Labor Agreements

• Project labor agreements are required for certain projects

participating in IPA programs/procurements under the IPA

Act

• Section 1-75(c)(1)(Q)(2) applies to:

• Utility-scale wind projects

• Utility-scale solar projects

• Brownfield site photovoltaic projects

• Not applicable to hydropower

• This requirement is in addition to the prevailing wage

requirements under 1-75(c)(1)(Q)(1).

Project Labor Agreements

• Requirements under Section 1-75(c)(1)(Q)(2):

• New utility-scale wind, solar, and brownfield site projects

must be "built by general contractors that must enter into a

project labor agreement"

• IPA Act defines "project labor agreement" as a "pre-hire

collective bargaining agreement that covers all terms and

conditions of employment on a specific construction project"

• All PLAs must be consistent with the Illinois Project Labor

Agreements Act

Compliance with PLA requirements

• All of the projects which require PLAs are competitively-bid

REC Contracts

• Bidder confirms commitment in the bid process

• REC Contract requires project owner to submit PLA to the

Director of the IPA within the later of:

• 60 days prior to construction starts

• 30 days after execution of the PLA

• 30 days of the Commission Bid Approval Date, if construction is

underway

• IPA confirms submitted PLA meets requirements, provides

confirmation to the project owner

Self-direct Program

• Projects participating in the Self-Direct RPS Compliance

Program must also be built under a PLA

• Required under 1-75(c)(1)(R)(2)(vii)

• Only applicable to projects where the REC Contract is entered into

after September 15, 2021

• Confirmation of compliance conducted during the application

review

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Q&A

Jane Flanagan

Director, Illinois Department of Labor

jane.flanag[email protected]ov

Kelly Turner

Chief Legal Counsel, Illinois Power Agency

Kelly.A.Turner@Illinois.gov