Chowdhury: Repeal of prevailing wage would hurt Wisconsin economy

Posted by National Alliance for Fair Contracting on

Abdur Chowdhury
10:17 a.m. CT June 6, 2017

Out-of-state companies received $32 million in contracts for municipal projects in Wisconsin between January and April of this year, up from about $21 million during the same period in 2016. That represents a 53% increase.

Contracts that should be going to Wisconsin companies are now being given away to out-of-state companies from Florida, Kentucky and Missouri. The difference? No prevailing wage protection on municipal projects.

In 2015, the Wisconsin Legislature voted to end prevailing wage in local projects – a provision that took effect this January. Republicans in the Legislature are now considering a full repeal of the state’s prevailing wage law.

This law requires that construction workers on state construction projects be paid the wages and benefits prevailing for similar work in or near the locality in which the construction project is to be performed. The concept arises from the concern that unbridled competition among employers to pay low wages in low-bid public construction environment would lead to a less-skilled and less-productive workforce and to shoddy construction practices and unsafe public buildings and infrastructure.

While the Legislature was debating this issue in 2015, many of us had expressed concern that eliminating the law would cut wages and invite so-called “gypsy contractors” from out of state to bid on Wisconsin projects. Research conducted by Frank Manzo and his co-authors indicated that the amount of construction work that would be leaked to neighboring states would cost Wisconsin 6,700 jobs and $40 million in tax revenue, and reduce economic activity in the state by $1.1 billion. For every dollar of construction value that is completed by an out-of-state contractor, economic activity would decrease by $2.26 in Wisconsin.

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Columnist Dennis Bidwell: Addressing downtown Northampton’s challenges (MA)

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By DENNIS BIDWELL

Monday, June 05, 2017
The Northampton City Council Committee on Community Resources, through public forums and a variety of presentations and submitted reports, has learned a great deal about both the strengths of the local economy, particularly as it affects downtown Northampton and the center of Florence, and about a variety of local challenges.
The efforts of the Pioneer Valley Workers Center and several labor unions produced considerable testimony, particularly from restaurant and construction workers, about their experiences with some local employers failing to comply with wage and labor laws. We also heard from restaurant owners describing their compliance with these laws, as well as their concern that the media’s attention on just one perspective about the issue left many restaurant owners feeling they were maligned as a group.

…

This attention to wage-theft issues yielded three actions taken by the city. First, issuance by the mayor of an executive order requiring that all contractors seeking procurement contracts with the city, or seeking tax increment financing agreements, certify their compliance with wage and hour laws. Second, passage by the City Council of a resolution declaring Northampton a fair employment city, and calling on the city’s License Commission and Community Preservation Committee to adopt similar requirements regarding contractor certifications. And third, urging additional wage-theft enforcement powers and resources for the state attorney general’s office, and approval of a council order requiring all applicants coming before the council for licenses to affirm their compliance with wage and labor laws.

California Labor Commissioner Citation of General Contractor for Subcontractor’s Wage Theft Affirmed

Posted by National Alliance for Fair Contracting on

SOURCE California Department of Industrial Relations, California Labor Commissioner’s Office
Jun 29, 2017, 17:32 ET

LOS ANGELES, June 29, 2017 /PRNewswire-USNewswire/ — California Labor Commissioner Julie A. Su issued citations of $249,879 against Irvine-based general contractor Deacon Corporation, along with its subcontractor, Lafayette-based Champion Constructions, Inc.

This is the first time that the Labor Commissioner has held a general contractor responsible for wage theft by its subcontractor by issuing citations under AB 1897 (section 2810.3 of the Labor Code), signed by Governor Brown in 2014, which took effect on January 1, 2015.

Champion, a drywall and framing contractor hired by Deacon for the Cambria Hotel construction project in El Segundo, shorted 47 workers. The Champion employees worked an average of 10 hours a day, five days a week and were unpaid for four weeks.

“This case addresses the pervasive problem of wage theft in subcontracted industries,” said Labor Commissioner Julie A. Su. “Businesses at the top of the contracting chain that profit from workplace violations can no longer escape legal liability by hiding behind their subcontractors, even if they did not control the work performed or know about the violations.”

The wage theft came to light after several of Champion’s workers walked off the job on June 16, 2016, and filed wage claims at the Labor Commissioner’s Office in Long Beach for nonpayment of wages.

The Labor Commissioner’s investigation revealed that Champion paid the workers from an account with insufficient funds and then skipped several pay periods for the majority of the workers. Investigators also learned that Champion failed to pay overtime wages to many of the workers, who worked up to 2 hours overtime a day.

The Labor Commissioner’s Office last August issued citations against both Deacon and Champion totaling $279,151 in unpaid overtime and minimum wages, waiting time penalties, rest period premiums and civil penalties for work performed from May 8, 2016 to June 16, 2016. A demand letter was also issued in August for $50,466 to request payment of the contract wages, which is the difference between minimum wage and the wages promised to the workers when contracted for the job.

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The St. Petersburg Wage Theft Ordinance: New Notice and Poster Requirements

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Monday, June 26, 2017

The City of St. Petersburg, Florida, recently amended its wage theft ordinance to require employers to provide pay notice to employees at the time of hire and to display “in a location accessible to all employees” a poster about wage theft. See St. Pete. Code, Chap. 15, Art. III, Sec. 15-40, et seq. These requirements are not yet in effect. As detailed below, the effective date is on hold pending the completion of a memorandum of understanding by the City, which is engaging a “community-based” organization to “implement the purposes of this article.”

The ordinance defines the term “employee” broadly to mean a “natural person who performs work within the geographic boundaries of the City while being employed by an employer . . .” including “a person who performs work that benefits an employer located within the City even though the employee may have performed work outside of the City.” The ordinance excludes “any bona fide independent contractor,” stating that the term “independent contractor” “shall have the same meaning as in the Internal Revenue Code, Fair Labor Standards Act, and implementing federal regulations, administrative interpretations and guidance” (though “independent contractor” is defined differently by the Internal Revenue Service and U.S. Department of Labor).

Background

On December 15, 2016, the St. Petersburg City Council passed several amendments to the City’s wage theft ordinance. Under Sec. 15-44, there are three new requirements for employers. Employers must provide a “written notice” to employees at time of hire, including a “template summary” summarizing the employee’s rights (available from the City), written notice of changes in pay, and a poster (available from the City). Sec. 15-44(a)-(d). There is also a $500.00 “per violation” penalty for an employer’s failure to adhere to any part of the ordinance. Sec. 15-44(e). The term “violation” is not defined.

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Construction workers, union seek more protection from wage theft, abuses in Charlotte

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JUNE 26, 2017 7:45 PM
BY ELY PORTILLO

A group of construction workers and labor organizers told Charlotte City Council on Monday that the city needs to take more steps to ensure the people fueling the building boom aren’t taken advantage of and subjected to unsafe conditions.

At a press conference organized by the AFL-CIO union in front of the Government Center uptown, they asked City Council to establish a task force to study construction workers’ conditions and pass a policy to rate contractors and make them disclose more about their employment practices.

The call for more rules to protect construction workers is tied to a report called “Build a Better South” that highlights wage theft, workers misclassified as independent contractors, lack of benefits and other hardships facing workers in the South’s booming construction industry. The report is a partnership of the Workers Defense Project, Partnership for Working Families, and the University of Illinois.

The report’s authors surveyed almost 1,500 workers in six fast-growing cities – Charlotte, Atlanta, Houston, Dallas, Miami and Nashville. In Charlotte, they found:

▪ Nearly half – 44 percent – received no benefits at all from their employers, such as sick leave or health insurance.

▪ The industry is largely made up of Latino workers, who comprised 68 percent of those construction workers surveyed in Charlotte.

▪ Only 11 percent had formal training in construction at a vocational school or community college.

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McHenry County Board approves prevailing wage, ending three years of protest votes

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By KEVIN P. CRAVER
June 26, 2017

WOODSTOCK – The McHenry County Board approved the state prevailing wage rates, ending a three-year streak of casting a symbolic protest vote against them.

Board members voted, 19-3, to adopt the wage schedule, which requires local governments to pay workers hired for public construction projects a specific wage set by the Illinois Department of Labor.

Audience members, many of whom were union members and local residents who came to encourage a vote to approve, applauded when the final vote was tallied.

The County Board since 2014 had voted against prevailing wage, while being careful to instruct county staff to follow the law.

Board member Donna Kurtz, R-Crystal Lake, said voting against prevailing wage sends a negative message to the community, and disputed the notion that the wages are responsible for the county’s sky-high property taxes.

“I think in the end, the overall benefits well outweigh the negatives that some may perceive regarding prevailing wage. It’s the right thing to do – we know it’s the law. It’s the right thing to do,” Kurtz said.

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Push for Prevailing Wages at State Transit Hubs Passes Assembly

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By Alyana Alfaro * 06/22/17 5:43pm

The New Jersey General Assembly on Thursday passed legislation requiring that subcontracted Newark Liberty Airport, Hoboken Terminal and Newark Penn Station employees be paid prevailing wages, a move that is estimated to bring wages for those employees up to $17.98 per hour according to the New Jersey Business and Industry Association.

The bill, A-4870/S-3226, was sponsored in the Assembly by Democrats including Assembly Speaker Vincent Prieto (D-Hudson) and in the state Senate by Democrats including Senate President Steve Sweeney (D-Gloucester). It passed the Assembly on Thursday with 51 yes votes, 23 no votes, and one abstention and will now go to the state Senate for consideration. The measure passed without Republican support.

“When you look at Liberty International, it is one of our biggest employers,” said Prieto (D-Hudson) from the Assembly floor prior to the bill being posted for a vote. “When these individuals live near these centers that should be an economic engine for the region, they should be able to be paid fair wage that is put back into the economy.”

The New Jersey minimum wage is currently $8.38 per hour. Subcontracted workers at Newark Airport make $10.20 per hour. Labor groups around the country are pushing for those wages to be boosted to $15 per hour, a figure lower than NJBIA estimates for the prevailing wage bill.

While Democrats in the legislature favor the initiative, the NJBIA says that the sharp wage boost would “substantially increase the costs for business, which will then be passed along to consumers.” While they estimate the $17.98 prevailing wage for these workers under the legislation, NJBIA says that mandated sick leave, health insurance and paid vacation days would have the same effect as boosting the minimum wage to $22.25 an hour. Michele Siekerka, President and CEO of NJBIA, said that by including such “expensive fringe benefits” as part of the legislation, the bill also eliminates collective bargaining and contract negotiation.

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NYC invests $10M to boost minority, women participation in construction

Posted by National Alliance for Fair Contracting on
Kim Slowey
June 22, 2017

Dive Brief:

  • New York City has created a $10 million fund to assist women- and minority-owned businesses win construction projects, according to Crain’s New York Business.
  • The money will go toward paying for up to $500,000 of surety bonds per contract. City contractors are required to furnish the bonds, which guarantee they will satisfactorily perform work and pay their bills, but they are difficult to obtain for smaller companies without a track record of completed projects.
  • Aside from helping women- and minority-owned firms become successful, New York City building officials said the program will help other contractors who are required to hire a certain percentage of these firms but can’t find enough of them to meet their mandated quotas.

Dive Insight:

The city aims to issue $16 billion worth of contracts to minority- and women-owned businesses by 2025, and the bond assistance program should help it meet that goal.
Considering that federal and state governments spend hundreds of billions on public construction work and typically set aside 5% to 10% for MBEs and WBEs, the potential payoff is substantial. However, many contractors have reported difficulty finding enough qualified firms.

Drivers Strike Against XPO Logistics in Latest Misclassification Fight

Posted by National Alliance for Fair Contracting on

RYAN ZUMMALLEN
JUNE 19, 2017

Every day Jose Herrera picks up his Kenworth T600 truck from a rented lot in Moreno Valley, Calif., and fights traffic on the 60 Freeway to the office of his employer, XPO Logistics, 70 miles away in Commerce.

The commute puts wear and tear on the vehicle, leads to pricey fuel bills and accelerates the maintenance schedule. But Herrera doesn’t have a choice. XPO, one of the largest shipping companies in the world, doesn’t allow drivers who own their trucks to park overnight at that location, he said.

“You have to spend more money to keep the truck going,” Herrera said.

Herrera was one of about a dozen drivers on a picket line in front of the XPO office Monday. The strike involves more than 150 drivers at XPO’s Commerce location, said Santos Castaneda, an organizer with the International Brotherhood of Teamsters, which is lending support. Drivers also struck at XPO locations in nearby Rancho Dominguez and farther south in San Diego.

It’s the latest effort from drivers to put pressure on shipping companies in the ongoing nationwide dispute over driver claims that they are misclassified as independent contractors rather than employees of the company. Monday’s strike is the 15th at Los Angeles ports in the last four years.

“There has been no impact to customers,” said Erin Kurtz, a spokesperson for XPO.

“We know firsthand that the majority of owner-operators prefer to work as independent contractors, and we will continue to advocate for their right to do so,” XPO said in a statement.

Truckers have filed more than 800 employee misclassification wage claims since 2011 and have been awarded about $40 million over 300 cases, according to the California Labor Commissioner’s office. About 200 cases are still pending, according to the state agency.

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VIDEO: South Bay construction workers demand higher wages, local hiring (CA)

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By Vince Cestone, KRON and Rob Fladeboe
Updated: May 31, 2017, 4:20 pm

SAN JOSE (KRON) – South Bay construction workers are demanding that developers hire locally and pay fair market wages.

Construction is booming in downtown San Jose. There are several new high rises going up, and while that means more badly needed housing and property taxes, one group is feeling left out of the boom-local construction workers.

Plumbers and pipe fitters from Local Trade Union 393 picketed Wednesday at the construction site of the silvery towers luxury condominium high-rise project going up in downtown San Jose.

They’re upset that the developer of this and other such projects are not hiring local workers, and they’re not paying the prevailing wage.

“It’s bad not just for our workers like the ones here, it’s also bad for the local economy because those workers who are working these jobs are taking their paychecks, going back to Texas or some other place, and they’re spending them there, and we think that’s got to stop,” South Bay Labor Council Executive Officer Ben Field said.

Union labor says “the last straw” was the recent approval of another residential condo project on the site of the former Greyhound bus depot. The developer has agreed to pony up $15 million in park fees and millions more for affordable housing and property taxes.

But the city cannot require the developer to use specific contractors or the payment of prevailing, union-scale wages.

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