Illinois State Board of Investments closes loophole that allowed state money to be invested in funds failing to pay prevailing wage in Illinois.
Illinois State Comptroller Susana Mendoza helped ensure Thursday that the state will no longer invest in funds which own properties flouting Illinois’ Prevailing Wage Act. The act ensures workers will not be paid lower wages than most workers in the area.
“Illinois has made a commitment to working men and women that they will be paid the prevailing wage at worksites being paid for with state money or state investment dollars. This action will prevent bad players from ignoring that law,” Mendoza said.
Comptroller Mendoza, who sits on the Executive Committee of the Illinois State Board of Investments, learned earlier this year that the Westin Hotel in Rosemont (which is owned by an investment fund managed by Clarion Partners) underwent a major rehab without paying prevailing wage. While ISBI has no investment in the fund that owns the Westin, they do invest in other funds that are operated by Clarion Partners. This new language added to ISBI’s rules Thursday specifically outlines that when ISBI funds are used to purchase real estate in Illinois, the managers of those investments must comply with a prevailing wage scale for ISBI-owned properties within Illinois.
The relevant rule now reads: “All investment managers, property managers, contractors, and their subcontractors shall observe, where applicable, all local, state (including Illinois’ prevailing wage scale for ISBI-owned properties within the State of Illinois) and national laws, but not limited to, those pertaining to insurance, withholding taxes, minimum wage, labor relations, health and occupational safety.”
Thursday’s rule-change at ISBI follows the Prevailing Wage Executive Order Comptroller Mendoza signed last year, which strengthens monitoring of prevailing wage compliance for state construction projects.
“I’m pleased to hear of the Board’s action today and we appreciate Comptroller Mendoza following through on protections of the Prevailing Wage Act to better ensure public funds, as well as public investments made by the ISBI Board, are made with the hard-working men and women at the forefront of their decisions,” said James P. Connolly, business manager for the Chicago Laborers’ District Council.