Illinois Determines Prevailing Wage Benefits No Longer Preempted by ERISA

In People ex rel. Department of Labor v. Lion Construction, LLC, the Illinois Appellate Court reversed Illinois’ prior rule that the state’s Prevailing Wage Act (PWA) is preempted by the federal Employment Retirement Income Security Act (ERISA) when a state action results from benefits-related issues. After an audit, the Illinois Department of Labor concluded that Lion Construction violated the state’s prevailing wage law even though it had nominally paid its employees the required base wage. The state alleged that Lion nevertheless violated the PWA by failing to pay required fringe benefits and brought an action in state court to enforce the state law.