Effective July 1, 2026, government contractors in Illinois who perform prevailing wage work must afford apprentices fringe benefits. These fringe benefits include pensions, vacations, and training, among other things.
What is the Illinois Prevailing Wage Act?
The Illinois Prevailing Wage Act (the “Act”) requires government contractors and subcontractors affiliated with “public works” projects to provide their employees with, at least, the prevailing rate of wages. The prevailing rate consists of both hourly wages, as well as fringe benefits. The Act is designed to ensure that public works laborers receive pay and benefits commensurate to wholly private sector workers who perform work of a similar character in the same locality.
A prevailing wage project, also known as a “public works” project, is funded, in whole or in part, by public funds.
How does the statute define apprentice and journeyman?
The Act looks to the United States Department of Labor’s definition of “apprentice,” which reads, in relevant part, as follows: “a worker at least 16 years of age . . . who is employed to learn an apprenticeable occupation.” At the same time, a journey-worker, also known as a journeyman worker, is defined as “a worker who has attained a level of skill, abilities and competencies recognized within an industry as having mastered the skills and competencies required for the occupation.”
Public Act 104-0017
Last year, the Illinois legislature passed House Bill 2488 (“HB 2488”), which became Public Act 104-0017 upon being signed into law by Governor J.B. Pritzker. Public Act 104-0017 codified what the Illinois Department of Labor claimed was its longstanding position: apprentices in public works projects must receive the same fringe benefit packages as journeymen.
After pushback from the contractor community, the legislature, in Public Act 104-0434, extended the bill’s effective date from last summer, to July 1, 2026.
What Employers Need to Know
Effective July 1, 2026:
- Covered contractors must now provide apprentices and journeymen with the same fringe benefits packages.
- Union apprentices may still be paid reduced apprentice wage rates, in accordance with any applicable collective bargaining agreement.
- Contractors can comply with their new obligations in one of two ways: (1) they can pay the value of the fringe benefit differential directly to their apprentices as additional taxable wages; or (2) they can pay full journeyman fringe contributions to whatever benefit fund is in place, for all apprentice hours worked on prevailing wage projects.
- Apprentices are only entitled to the fringe benefits required by the prevailing wage law. These benefits include the following: Health & Welfare, Pension, Vacation, Training, and Other Insurance.
- Contractors may not need to pay the entire apprentice fringe benefit differential as wages or to a union benefit fund. When contractors provide fringe benefits to employees, they may be able to take credit for those benefits and reduce their amount due and owing to employees or benefit funds. However, not all fringe benefits can lead to wage credits. The availability and value of credits are dependent on the specific benefit, how the benefit is funded, and whether the benefit satisfies prevailing wage requirements. Contractors should speak with their payroll providers and/or counsel to determine whether the fringe benefits they provide afford them credits.
If you have any questions about the recent changes to the Illinois Prevailing Wage Act, please contact the authors or your regular Saul Ewing employment attorneys.
Update: *On July 15, 2026, after this blog was initially posted, the Illinois Department of Labor published the state’s 2026 prevailing wage rates*
