Tag Archives: Labor Department

Illinois Prevailing Wage Updates…Yet More Changes That Hurt Contractors & Cost Taxpayers

Contributed by Jeff Risch

Once again, more changes to Illinois’ Prevailing Wage Act are underway, including…

In House Bill 5212, a public body or any other entity (i.e. an upper tier contractor) can fulfill its obligations to provide notice to contractors and subcontractors of any revisions to prevailing wage rates by including in the contract that the prevailing rate is established by the Department of Labor and available on the IDOL website. Unlike federal prevailing wage law, Illinois’ prevailing wage law allows for the wage to actually increase during a given project.  This bill essentially places all financial obligations and liabilities on the shoulders of the contractors and subcontractors. It passed in both Houses and awaits action by the Governor 

Senate Bill 2643 requires local government units to apply the “responsible bidder” requirements of the Illinois Procurement Code. This could very well be in contradiction to federal ERISA law, but that appears not to be stopping Big Labor from trying to push this amendment through.  The most troublesome requirement is that contractors must participate in a U.S. DOL approved apprentice and training program — without any clear definition of what “participation” means and excluding contractors who offer “on the job learning” or rely on the multitude of meaningful apprenticeship and training programs not approved by the U.S. DOL.   Also troubling is that this legislation requires bids to include the total number of straight-time hours to be performed on the job, identified as either “journeyperson” or “apprentice,” for each craft or type of worker or mechanic needed to execute the contract. This bill was not called for a vote in the House, but it is expected to be revisited during the veto session.  Make no mistake – this bill was created by Big Labor designed to “cut out” the non-union contractor.  

Senate Bill 3695 requires contractors to include in record keeping the gross and net wage, hourly overtime rate, fringe benefit rates, and non-union contractors to identify the sponsor and administrator of fringe benefit plans.  This bill will undoubtedly be used against contractors in the audit and investigation process.  Although the bill passed the Senate on a 30-27 vote, it was too late for the House to take it up, but it is expected to be voted in the House during the veto session.

New Guidance Published on Required 401(k) Fee Disclosures

Contributed By: Rebecca L. Dobbs
 
We have previously written on the final regulations published on October 20, 2010 by the Department of Labor (DOL) with regard to the requirements of plan administrators to disclose plan and investment-related info, including fee and expense info, to participants.  We wrote on the subject again after additional final regulations were published on February 3, 2012 by the DOL with regard to disclosure requirements for covered service providers.
 
Now, the subject rears its head again as the DOL recently published further guidance on May 7, 2012 in the form of a Field Assistance Bulletin. Some highlights of the bulletin include the following:

  • Plan Administrators can furnish the information in one single document. The DOL has indicated it does not intend for participants to receive unnecessary duplicative information.
  • Although easier said then done, the disclosures should be specific to describe monetary amounts, formulas, percentage of assets or per capita charges – yet be written in a manner calculated to be understood by the average participant.  To assist further, the DOL provides several examples of language which it would view as consistent with these principles.
  • While it seems obvious, if administrative expenses are paid by forfeiture funds and/or the general assets of the plan sponsor (and there is no intent in the foreseeable future to charge participants), the administrative expenses do not need to be disclosed to participants.
  • But, be careful.  If administrative expenses are paid from revenue sharing received by the plan (and even though no fees or expenses are charged to individual accounts), explanation of the revenue sharing must be provided to participants.
  • Where fees and expenses are only associated with select investments, plan disclosures need to be made to all participants and not just those who have elected the specific investments.
  • Although the final rule requires participants be provided with a glossary of terms, the DOL will not be publishing a sample glossary for plan sponsors/plan administrators to use.
  • The disclosures do not have to be stand-alone documents.  They can be part of the SPD or included in participant statements as long as they are furnished in compliance with the applicable timing requirements in the regulations.

Remember, covered service providers are required to make disclosures by July 1, 2012 and employers/plan sponsors are required to make disclosures by August 30, 2012. The DOL indicates, however, that they recognize there may not be enough time to change current systems already in place. They also indicate the significance of the disclosure rules is too great to delay the deadlines for compliance yet another time. In turn, the DOL has made it clear in this newly published guidance that for enforcement purposes, they will take into account whether there has been good faith compliance based on a reasonable interpretation of the new regulations.  In such a case, enforcement actions should generally not be necessary.