Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
Early voting hours and locations greatly expanded across the state this week as the campaign season entered its final two-week stretch. The election is just thirteen days away. If you have not taken advantage of the opportunity to vote early, either make plans to do so or make sure you get out and vote on Tuesday, November 8th. Exercising your right to vote is just as important today as it has been in the past. Check out https://www.willcountyclerk.gov/november-8-2022-general-election/ for more information on where to early vote, sample ballots, polling places, and more.
*Government Affairs Roundup brought to you by CITGO & Silver Cross Hospital*
Pritzker Administration Announces up to $30,000 in Mortgage Relief per Eligible Homeowners
The Illinois Housing Development Authority (IHDA) announced it is reopening a mortgage assistance program designed to assist homeowners financially impacted by the pandemic on Tuesday, Nov. 1, 2022. The Illinois Homeowner Assistance Fund (ILHAF) provides up to $30,000 in mortgage assistance to eligible homeowners — paid directly to the servicer, taxing body or other approved entity — while homeowners work to regain their financial footing. Whether homeowners have a mortgage, a reverse mortgage, or are mortgage-free, the program can fund past due housing payments and up to three months of prospective mortgage payments.
The program is free and funds do not need to be repaid. Application, program information and updates can be found at illinoishousinghelp.org. Applications will be accepted until 11:59 p.m. on Tuesday, Jan. 31, 2023.
“No Illinoisan should have to choose between paying their mortgage and putting food on the table,” said Governor JB Pritzker. “That’s why we established the Illinois Homeowner Assistance Fund to provide some much-needed relief to our residents who struggled throughout the pandemic. Today, I am proud to announce that we are reopening that very program so that no Illinois family goes without a roof over their heads. I encourage every eligible household to apply for ILHAF funding starting November 1, and I thank the entire Illinois Housing Development Authority team for their leadership.”
“Having a roof over your head is one of the pillars of feeling safe and having a positive quality of life. The lingering economic impact of the pandemic is still being felt, especially when it comes to housing. That is why Illinois is so committed to helping residents stay in their homes,” said Lt. Governor Juliana Stratton. “This program does just that, and it will continue to be a resource because people who need housing assistance deserve to be seen and supported. Illinois sees them, and we will keep working to ensure no one has to experience the fear and stress of losing their home.”
To qualify for ILHAF assistance, Illinois homeowners must have experienced a financial hardship due to the COVID-19 pandemic after Jan. 21, 2020 (including a hardship that began before Jan. 21, 2020, but continued after that date). They also must currently own and occupy their home in Illinois as their primary residence, be at least 30 days late on their monthly housing payments and have a household income at or below 150% of the area median income.
“The state of Illinois is committed to ensuring that homeowners who are struggling due to this terrible pandemic can stay in their home,” said IHDA Executive Director Kristin Faust. “We designed the ILHAF program to ensure the most vulnerable households are prioritized in order to stave off foreclosure to ensure they are given the opportunity to become current on their monthly housing expenses.”
Potential applicants must demonstrate they have either communicated with their mortgage provider about their inability to pay or sought counseling with a HUD-approved counseling organization. Interested homeowners are strongly encouraged to attend an information session hosted by IHDA or one of our housing partners. The session schedule is posted online at illinoishousinghelp.org, for those without access to a computer or the internet, please contact the ILHAF hotline at 1-866-IL-HELP (866-454-3571).
Homeowners who received assistance in the previous round of ILHAF can apply for additional assistance this round. Please note, however, the maximum assistance that can be provided in total to applicants across both rounds is $30,000.
ILHAF is funded through an appropriation in the federal American Rescue Plan Act of 2021 (P.L. 117-2), which was signed into law in March 2021. The $1.9 trillion economic stimulus relief designed to speed up recovery from the COVID-19 pandemic included $9.96 billion allocated for state territories, tribes and the Department of Hawaiian Homelands. The state of Illinois was allocated $386.9 million which was appropriated to IHDA by the Illinois General Assembly (P.A. 102-0017).
For more information and updates on the program, please visit illinoishousinghelp.org
Illinois gets $7 million for unemployment system upgrades
As Illinois receives a nearly $7 million federal grant to better understand and address unemployment insurance system equity gaps, some continue to express concerns about persistent unemployment debt. The U.S. Department of Labor in September awarded Illinois a $6.8 million equity grant to better understand and address equity gaps within the Illinois unemployment insurance system.
Four major equity projects will be funded through the grant, according to a news release by the Illinois Department of Employment Security. These projects include upgrading the UI service delivery systems, processes and communications for easier access and experience. This involves making the UI information easier to understand, translating the information into various languages, growing the self-service digital options and increasing the outreach to organizations within the community.
“Since 2019, Governor Pritzker’s administration has supported IDES in its efforts to improve services to individuals with limited English proficiency and other barriers to access,” IDES director Kristin Richards said in the statement. “The work continues, and this grant opportunity will allow IDES to develop the data necessary to make targeted investments to promote equity in our state’s UI system and ensure eligible individuals have access to benefits.”
Illinois is one of 27 states to get a share of more than $150 million of federal taxpayer funded grants for the program. Richards and IDES have been criticized by members of the Illinois legislature for not providing adequate information about unemployment benefits paid out fraudulently. A recent audit suggested nearly $2 billion in fraudulent payments from during the pandemic from a federal fund operated by Illinois, but the entire scope of fraud couldn’t be acquired because of the agency’s poor record keeping.
Illinois Chamber of Commerce President and CEO Todd Maisch is concerned about the tax burden placed on businesses because of ongoing unemployment debt, which at one point was $4.5 billion. The state recently paid down another $450 million on the debt, but there’s still $1.3 billion remaining. “As much as we appreciate the extra $450 million, it just bends the curve on the additional employer tax increases that are yet to come,” Maisch said.
Maish said Illinois has underperformed in comparison to other states relating to “fraud and cheating of the system” and that employers will see a massive increase in taxes while the unemployed see the same benefits as before. “The unemployed individuals are going to get all the benefits that they were promised and that they should expect to see but employers are going to pay for all of that,” he said. “If organized labor doesn’t want to come to the table, then that means, coming out of a COVID recession and coming out of maybe a new recession, that employers are going to be saddled with millions, if not billions of dollars of extra UI costs.”
DCEO Launches Public Input Process for Climate and Equitable Jobs Act (CEJA) Curriculum
The Illinois Department of Commerce and Economic Opportunity (DCEO) has announced public listening sessions and additional engagement opportunities to collect input on the Clean Jobs Curriculum which will be used in two new workforce training programs: the Clean Jobs Workforce Network Program Hubs (Clean Jobs Hubs) and the Returning Residents Clean Jobs Training Program.
As a first step in creating the curriculum, DCEO is seeking public input from employers, training providers, community-based organizations, workforce and advocacy organizations, and interested community members. Aligned with the program requirements set under the Climate and Equitable Jobs Act (CEJA), interested parties can visit www.illinois.gov/dceo/ceja to provide input during public engagement sessions, through completion of surveys, or through email.
Read the full press release for additional information.
Analysis of the Department of Labor’s Proposed Independent Contractor Rule
On October 11, DOL issued a Notice of Proposed Rulemaking on determining independent contractor status. It appeared in the October 13 Federal Register. As a general matter the NPRM:
1) Repeals the Trump administration’s 2021 IC rule
2) Reinstates the “traditional” economic realities test
3) Provides examples and discussion around DOL’s view of each factor of the test
4) Provides a 60-day comment window—deadline is December 13
The overarching thrust of the NPRM is the concept of “economic dependence” and whether a worker is economically dependent on an employer for work, or in business for himself. Note that economic dependence is not defined by income or earnings, but rather whether the individual is dependent on the employer for the work in question.
The NPRM includes a “totality of the circumstances” analysis. However, it does not provide a pre-determined weight or degree of importance to any of the factors in the economic realities test. In failing to do so, the NPRM provides little guidance as to how workers and businesses should apply those factors when they do not all point in the same direction. This is problematic because businesses and workers once again will not have clear guideposts as to how to properly classify a worker.
The NPRM states that “the Department does not believe … that this proposed rule would result in widespread reclassification of workers. That is, for workers who are properly classified as independent contractors, the Department does not, for the most part, anticipate that this rule would result in these workers being reclassified as employees. Especially compared to the guidance that was in effect before the 2021 IC Rule, the test proposed in this NPRM would not make independent contractor status significantly less likely.” Perhaps, but the devil is in the details and the way in which the Department, and courts, would apply the new rule.
The NPRM lists seven factors that will weigh in the determination of IC status. No single factor is dispositive and an analysis of individual circumstances may weigh one factor more or less heavily than in other cases. In other words, it will be difficult to know whether someone is properly classified under the NPRM.
1) Opportunity for profit and loss based on managerial skill: This factor analyzes the level of managerial skill exercised by a worker in terms of the worker’s success or failure in performing the work. It also looks at whether the worker can set the rate of pay for the service provided, whether the worker accepts or declines jobs or the order in which they are completed, whether the worker engages in marketing, advertising, or other efforts to expand their business or secure more work; and whether the worker makes decisions to hire others, purchase materials and equipment, and/or rent space. Finally, it looks at whether the worker has the opportunity to experience a financial loss (beyond a reduction in pay).
2) Investments by the worker and employer: An investment borne by the worker must be capital or entrepreneurial in nature to indicate independent contractor status. Notably, and concerningly, this section states that “the use of a personal vehicle that the worker already owns to perform work— or that the worker leases as required by the employer to perform work—is generally not an investment that is capital or entrepreneurial in nature.” This factor also looks at the level of a worker’s investment relative to that of the business. It states, “If the worker’s investment does not compare favorably to the employer’s investment, then that fact suggests that the worker is economically dependent and an employee of the employer.”
3) Degree of permanence of the relationship: The NPRM states that where workers provide services under a contract that is “routinely or automatically renewed” that indicates a permanent or indefinite relationship that is indicative of employee status. The NPRM also includes exclusivity as weighing against independent contractor status. However, it goes beyond that to state that “operational characteristics that are unique or intrinsic to particular businesses or industries and the workers they employ” that result in a lack of permanence should not weigh in favor of IC status. In other words, the NPRM appears to define away the fact that many ICs may provide only sporadic services to a particular business.
4) Nature and degree of control: This factor looks at the level of control, to include reserved control. The overall analysis of factor 4 looks at these indicators:
• Scheduling: This goes beyond just whether an employee chooses when or when not to work, but whether by demanding certain hours a business effectively prevents a worker from working for others. This provision also examines whether a business can discipline workers for declining work.
• Compliance with legal obligations: This section is particularly concerning. The NPRM states that “[A]n employer’s compliance with legal obligations, safety or health standards, or requirements to meet contractual or quality control obligations, for example, may in some cases indicate that the employer is exerting control, suggesting that the worker is economically dependent on the employer.” In other words, if the worker is not doing the “entrepreneurial tasks” that suggest that they are responsible for understanding and adhering to the legal and other requirements that apply to the work or services they are performing, but rather the business does this for them, it indicates control and employee status.
• Supervision: Under the NPRM, the lack of direct supervision is not necessarily indicative of independent contractor status. It states that “the nature of an employer’s business or the nature of the work may make direct supervision unnecessary.” Further, it considers the right to exercise supervision, even if it is not exercised, is evidence of control. Moreover, such supervision may be exercised remotely or through technology in addition to being performed in person.
• Pricing: The ability to set a price or rate for the goods or services provided by the worker, or influence the price or rate, is relevant when examining the control factor under the economic realities analysis. If the worker in question is not able to set their own price, or at least meaningfully negotiate it, that is indicative of employee status under the NPRM.
• Ability to work for others: Where a worker has an exclusive work relationship with one employer and does not have the ability to work for others, this indicates employee status.
5) Extent to which the work performed is an integral part of the employer’s business: The NPRM states that it “returns to the framing of this factor as whether the worker’s work is an ‘integral part’ of the employer’s business.” If the employer “could not function” without the services performed by the workers, then the service is integral. Workers in this case are likely to be economically dependent because “their work depends on the existence of the employer’s principal business, rather than their having an independent business that would exist with or without the employer.” If a business provides a product or service, “the workers who are involved in making the product or providing the service are integral.” This is a significantly problematic description of this factor, which would impact many businesses that have longstanding IC relationships with workers. The rule specifically states that “an individual worker who performs the work that an employer is in the business to provide but is just one of hundreds or thousands who perform the work…is nonetheless an integral part of the employer’s business…” Specifically the NPRM rejects the current Trump administration regulation’s interpretation of the “integrated unit” factor. Again, this is tremendously problematic and greatly expands the reach of the NPRM. Keep in mind, however, that factor 5 is just one factor in the analysis and is not dispositive of employee status on its own.
6) Skill and initiative: This factor looks at whether a worker has specialized skills that are used in the performance of the work. Concerningly, it states that “Numerous courts have found that driving is not a specialized skill…”
7) Other factors: This is left undefined. Presumably, if something were found in the analysis of a particular case that made it apparent that there is an employee relationship, that factor would not be disregarded simply because it was not one of the enumerated six factors.
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct