Update on Illinois Prevailing Wage Act: Full Journeyman Fringe Benefits Required for Apprentices Effective June 30, 2025 | Public Act 104-017 (HB 2488)

Summary: Beginning June 30, 2025, Illinois requires apprentices on “public works” projects to receive full journeyman-level fringe benefits, even if union or apprenticeship program terms say otherwise. “Public works” under the Illinois Prevailing Wage Act (IPWA) includes nearly all fixed works constructed, maintained, or demolished by or for a public body and paid for in whole or in part with public funds, including projects financed through State or local bonds, grants, or loans. Recent amendments also extend coverage to utility, power-washing, sewer inspection, and renewable energy projects, as well as certain third-party utility or fiber-optic construction performed in public rights-of-way. Discounted hourly wage rates for properly U.S. DOL-registered apprentices remain permitted, but fringe benefit discounts are no longer allowed. We recommend that you review your fringe contributions, bids, payroll systems, and CBAs to stay compliant and avoid penalties.

Note: Under 5 ILCS 70/4 and Illinois case law, statutory amendments that create new substantive obligations are presumed to apply prospectively unless the General Assembly clearly indicates otherwise. Because the 2025 amendment to the IPWA imposes new duties on contractors and contains no retroactivity clause, it will almost certainly apply only to work performed or contracts awarded on or after June 30, 2025.

Context and Background (For Reference): In Spring 2025, the General Assembly passed HB 2488 (enacted into law as P.A. 104-0017), amending Section 2 of the IPWA to require that apprentices on public works receive full journeyman-level fringe benefits, as reflected in the revised definition of the “general prevailing rate of wages.” The Illinois Department of Labor says this codifies its long-standing interpretation and enforcement practice, removes ambiguity, and ensures consistent treatment of apprentices statewide. At the same time, the legislation that expands the definition of “public works” (SB 1344, now enacted into law as Public Act 104-0023), also strengthens record keeping requirements, and increases civil penalties for certified payroll violations (up to $1,000 first offense/$2,000 subsequent).

Key Takeaways:

• New Rule: An apprentice’s fringe benefit package may not be lower than a journeyman’s in the same trade and locality.
• Still Allowed: Reduced hourly wage rates for properly registered apprentices, but not reduced fringes.
• Effective Date: June 30, 2025.
• Applies To: All contractors and subcontractors on IPWA projects.
• Enforcement Exposure: Back pay, 20% interest, and civil penalties for false or incomplete certified payrolls.
• Broader Coverage: Companion amendment expands “public works” to include certain utility, power-washing, and sewer-inspection projects.

Impact on Union Signatory Contractors: Previously, IDOL allowed apprentices registered with U.S. DOL-approved programs to receive reduced wages and fringes based on their CBA or apprenticeship agreement. The new rule eliminates that fringe discount practice: apprentice fringe benefits must now match journeyman levels in full. Union contractors must either remit the full journeyman-level contribution to each benefit fund or pay the difference directly to the worker as cash wages. Failure to do so risks IDOL penalties and potential debarment under the IPWA.

What to Do Now (Practical Steps):

• Audit apprentice fringe contributions: Confirm that all fringe benefit remittances for apprentices equal journeyman levels for each classification and county.
• Review CBAs and apprenticeship agreements: Identify and amend any provisions allowing reduced apprentice fringe contributions; coordinate with fund trustees and union representatives.
• Update bids and payroll systems: Reflect journeyman-level fringe costs in bids and certified-payroll templates for projects bid or awarded after June 30, 2025.
• Decide how to handle any shortfall: Contractors may (a) increase fund contributions or (b) pay any shortfall directly to workers as cash wages (affecting overtime calculations).
• Tighten certified-payroll practices: Ensure monthly filings reflect apprentice classifications and journeyman-equivalent fringes; maintain required records for five years. Penalties for non-filing now reach $1,000 (first offense) and $2,000 (subsequent).
• Confirm apprentice registration status: Only bona fide apprentices enrolled in a U.S. DOL-registered program may receive apprentice-level wage rates; others must be paid the full journeyman rate.

LKK Law Commentary: Illinois has eliminated any distinction between apprentice and journeyman fringe benefits on public works projects, bringing state practice in line with federal Davis-Bacon “equal-benefit” principles. Union contractors, in particular, should budget for higher fringe costs and work with counsel to update CBAs, bid templates, and certified-payroll processes.

We are currently assisting contractors and public owners with compliance audits and contract revisions to ensure appropriate transition to the new requirements. Please contact us if you have questions, need assistance, or would like to discuss.