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Public Advisory Regarding the Employee Classification Act (ECA)
Any contractor who has construction services performed for it in the prior taxable year by an individual, sole proprietorship or partnership that is not an employee of the contractor must annually file a report by April 30th with the Department of Labor. The report must include the following information:
- contractors name, address, and business identification number;
- the name, address and business identification number of each entity or person providing services, along with total amount paid for services and materials and equipment during the taxable year.
This reporting requirement is not applicable to a business primarily engaged in the sale of tangible property or a contractor doing work for a business that is primarily engaged in the sale of tangible property nor to individuals or firms meeting the responsible bidder requirements of Section 30-22 of the Illinois Procurement Code. For further information see 820 ILCS 185/43. Where a corporation or LLC provides construction services for a contractor, the contractor must include the corporation or LLC in the report if the corporation does not meet the test of a bona fide corporation or bona fide LLC, as defined in Administrative Rule 240.110.
A contractor who fails to submit a report to the Department or submits a false report violates the Act and may be subject to civil penalties and debarment.