Last week, legislators and advocates gathered to announce the filing of Senate Bill 74 and House Bill 1224, landmark legislation to reform Illinois’ retainage policies.

State Senator Willie Preston (D-Chicago), chief sponsor of Senate Bill 74 explains that this bill will give small businesses and workforce payment practices that reflect the realities of today’s economy.

The bills aim to end the practice of withholding payments from contractors across the board and instead adopt federal standards that impose retainage only when specific project issues arise. The bills would only apply to state agencies and public universities, not local governments or private developments.

Advocates emphasized the detrimental effects of the current policy on contractors and small businesses, noting how delayed payments disrupt cash flow, limit job growth and threaten livelihoods.

By aligning Illinois’ policies with federal standards, the legislation aims to provide contractors with the financial flexibility they need to complete projects efficiently while ensuring accountability in construction practices.

The members will work over the coming months to pass legislation that strengthens Illinois’ retainage policies.