ILR Impact Brief – New York State Prevailing Wage Law: Defining Public Work

Posted by National Alliance for Fair Contracting on

Publication Date 3-8-2018
Fred B. Kotler, Cornell University ILR School

Abstract

New York’s prevailing wage standards require that contractors on state funded construction projects pay their workers no less than wage and benefit levels “prevailing” within the local construction market.

Much has changed since the prevailing wage was enacted by statute in 1897 and written into New York’s Constitution in 1938. “Public works” projects then typically meant construction of public facilities, funded by public money, for public use. Today public resources are leveraged creatively to attract private capital for economic development.

The commingling of the various forms of public support with private funding has blurred the definition or boundaries of “public work.”

Sixteen other states have statutes that more broadly apply the standards to include loans, tax incentives, and other forms of public support to private projects. New York is among ten other states that enable private developers to accept public money without paying prevailing wages and benefits.

This report examines the taxpayer interest in redefining “public work” to include both traditionally funded public works projects and private, economic development projects funded at least in part by public assets.

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(Full PDF of Study)

‘We value work:’ Richmond employers recognized for backing living wage

Posted by National Alliance for Fair Contracting on

POSTED 7:49 PM, MARCH 22, 2018, BY CAPITAL NEWS SERVICE

RICHMOND, Va. – Richmond community and business leaders gathered Thursday at the Washington Redskins’ training center to celebrate and discuss efforts to ensure a living wage for workers.

In a room overlooking snow-covered training fields, the introduction of the Richmond Living Wage Certification Program was mostly an hour of food and celebration for those present. Ten businesses and organizations – including Altria, the University of Richmond and the Better Housing Coalition – were recognized for going beyond the $7.25 minimum required by state and federal governments.

“Yes, jobs are important,” Richmond Mayor Levar Stoney told the gathering. “But jobs that are worked full-time and still leave those workers below the poverty line may help a corporate bottom line, but it will not help someone up from the bottom.”

The living wage program, a joint project of Richmond’s Office of Community Wealth Building and the Virginia Interfaith Center for Public Policy, is the first of its kind in the state. Reggie Gordon, director of the wealth building office, stressed the importance of ensuring that workers are compensated enough to lead a full life with economic stability.
“It’s not an overstatement to say that the people employed by the companies recognized today have a better chance to succeed in this community,” Gordon said.

The Richmond initiative uses calculations from institutions including MIT and the Economic Policy Institute to create a three-tier structure. The highest tier includes businesses that pay a minimum of at least $16 an hour (or $14.50 with health-care coverage). Six of the honorees met that “Gold Star” standard. Employers who have pledged to pay a living wage but aren’t able to yet were also acknowledged.

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US Department of Labor Wage and Hour Division Prevailing Wage Seminars

Posted by National Alliance for Fair Contracting on

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The Wage and Hour Division (WHD) Prevailing Wage Seminars are three-day compliance trainings designed for regional stakeholders (private contractors, state agencies, unions, federal agencies and workers).

The first two days of the seminar will consist of either courses on the Davis-Bacon Act or the Service Contract Act. The third day will feature courses concerning the Executive Orders and subject matter related to both the Davis-Bacon Act and the Service Contract Act as well as presentations from other agencies such as OSHA, Office of Federal Contract Compliance Programs (OFCCP), Housing and Urban Development (HUD), National Labor Relations Board (NLRB)

We have selected the following locations for our 2018 seminars:

Venues will be announced at a later date. If you would like to receive email updates about our seminars, please sign up for our mailing list here. (In the category “Wage and Hour” select “WHD – Prevailing Wage Seminar Announcements”)

For any questions please contact WHD-PWS@dol.gov 

(Visit DOL’s WHD Website)

The Effect of Prevailing Wage Repeals on Construction Income and Benefits

Posted by National Alliance for Fair Contracting on

Feb. 2018

Journal of Public Works Management and Policy

Ari Fenn, Zhi Li, Gabriel Pleites, Chimedlkham Zorigtbaatar and Peter Philips – University of Utah

While considerable research has examined the effects of prevailing wage law repeals on construction wages, little has been done on the repeals effect on benefits. Based on state-level data from the quinquennial Economic Census for construction from 1972 to 2012, we find that depending on sample and model specification, statewide annual average construction blue-collar income fell by 1.9% to 4.2%. Statewide annual average legally required benefits (social security, workers injury-compensation insurance, and unemployment insurance contributions) for blue- and white-collar construction employees combined fell from 3.8% to 10.1%. Statewide annual average voluntary benefits (primarily health insurance, pension contributions, and apprenticeship training) for blue- and white-collar construction employees combined fell from 11.2% to 16.0%. Because prevailing wage laws govern only blue-collar construction remuneration, blue-collar benefits probably fell more than blue- and white-collar benefits taken together.

(Download Full PDF Here)

My Turn: Armand E. Sabitoni: Morgan attacks construction workers

Posted by National Alliance for Fair Contracting on

By Armand E. Sabitoni
Posted Apr 10, 2018 at 5:49 PM

There is no greater investment than ensuring our children have the foundation built for future success. As Rhode Island’s school buildings get older and unhealthier each year, the time is now to invest in new school infrastructure. Building new schools and making necessary technology updates are vital to Rhode Island’s economic recovery and also stimulate job growth.

Construction workers are the backbone of a strong economy and play a critical role in school infrastructure investment. Skilled men and women go to work each day, in sometimes difficult conditions to put food on the table for their families. Tirelessly, they pour blood and sweat safely and efficiently building our roads, bridges, schools, water and energy systems.

Unfortunately, on her March 30 Commentary piece (“Fix more R.I. schools for less money”), Rhode Island House Minority Leader, Patricia Morgan, sadly insinuates that all construction workers are overpaid and should take a pay cut to build our schools.

Morgan proposes that the state exempt school construction from the state’s prevailing wage law, falsely thinking this will save money. Some elected officials have tried this charade in other states, attacking the livelihood of blue-collar workers they claim to represent.

Prevailing wage laws are bipartisan and have Republican roots back to 1931, when Sen. James Davis, R-Pa., and Rep. Robert L. Bacon, R-N.Y., helped to pass the Davis-Bacon Act federally and most states passed local prevailing wage laws quickly thereafter. Nationally, Republicans and Democrats, consistently support prevailing wage laws as necessary to protect family-supporting, blue-collar construction jobs.

Prevailing wage laws guarantee a minimum floor for wages, leveling the playing field for construction contractors bidding public work. Data based on what skilled workers earn in a local area are used to set the prevailing wage rate.

All construction workers, union and non-union, are paid a set wage and benefit rate determined by market surveys for work performed in their classification. These laws protect the local skilled workforce in Rhode Island from out-of-state contractors who might otherwise attempt to underbid their competition with low-wage out-of-state workers. Strong prevailing wage laws generate millions in local economic spending activity.

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Sherry Buchanan: Leave prevailing wage alone

Posted by National Alliance for Fair Contracting on

OpEd Sherry Buchanon
4/9/18

Once again, Republicans are trying to repeal Missouri’s prevailing wage. This law protects standards for decent wages, guarantees a fair bidding process, and demands safety and quality for public projects. The Kansas City Star recently called repeal efforts “the political lunacy of advocating for middle-class wage cuts during an era of stagnation and rising inequality.”

Prevailing wage protections started in 1931 when the Davis-Bacon Act was signed by Republican President Herbert Hoover. The act came about after two congressmen teamed up to protect their states from contractors who were bringing in low-paid labor from Alabama to do work on taxpayer-funded projects. Not only did the congressmen object to displacing local labor, they also recognized that these migrant workers would not be long-term taxpayers, consumers and constituents. They recognized that paying the lowest wages was not good overall economics.

Missouri’s prevailing wage law requires workers, union or nonunion, to be paid set wages on taxpayer-funded projects such as schools, jails and bridges. Wage rates are determined county-by-county from voluntary annual wage reports submitted by contractors who work in those counties. Those who pay union rates and those who do not are included in the average. So essentially, the “prevailing wage” in each county is the local going rate for various types of labor.

Because trade unions have successfully bargained for higher compensation, and because union-skilled labor is preferred by many local private and public builders, local wages are higher than they might otherwise be.

…

I want public policy that protects workers’ ability to make living wages so they can pay taxes and be vigorous consumers, helping our businesses and economy to prosper in ways that are good for everyone, not just the rich. I want public policy that supports a fair bidding process for contractors and rewards contractors willing to do quality work. I want public policy that guarantees safe construction of schools, roads, county jails and bridges. I want policy that supports spending local taxes to pay local workers who, in turn, spend locally.

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SOUTH BEND PASSES RESPONSIBLE BIDDER ORDINANCE

Posted by National Alliance for Fair Contracting on

By IUOE Local 150

On April 11, South Bend Mayor Pete Buttigieg signed a responsible bidder ordinance (RBO) which was passed by the Common Council on April 9th. It sets conditions for contractors to be classified as “responsible” and eligible for work on projects of less than $150,000 in value.

An RBO is meant to protect taxpayer dollars as well as small businesses by making sure public works projects are completed efficiently and held to a high standard. They typically contain requirements such as participation in a training program and a clean safety record.

Mayor Buttigieg told WVPE radio that this ordinance was something that the city has been working on for a while. “I really view this as a community effort, there was a lot of leadership on the council,” Buttigieg said, “It was something we’ve been kicking around for a long time, but it took us a while to get it right and make sure that what we came up with really fit South Bend.”

“Ensuring that responsible contractors are prioritized for work opportunities in South Bend protects workers and delivers the best outcome for taxpayers,” said IUOE Local 150 President-Business Manager James M. Sweeney. “The residents funding this work deserve the assurance that their money will go to contractors who are qualified, capable and have a track record of quality and safety.”

(See Article)

New Jersey bill seeks P3 expansion

Posted by National Alliance for Fair Contracting on

By Andrew Coen
Published April 13 2018, 11:08am EDT

New Jersey lawmakers are pushing again for an increase in the use of public-private partnerships to jump-start infrastructure improvements in the cash-strapped state.

Two and a half years after former Gov. Chris Christie conditionally vetoed an expansion of New Jersey’s P3 program, a state senate committee advanced legislation on April 5 that if enacted would permit localities to enter into P3 agreements for building and highway infrastructure projects. The measure would make local governments, school districts, public authorities and state colleges eligible to enter into P3s where the private entity would assume full or partial financial and administrative responsibility for capital projects.

“The whole purpose is to provide another tool for flexibility in financing,” said State Sen. Steven Oroho, R-Franklin., who co-sponsored the bipartisan bill with Senate President Steve Sweeney, D-Gloucester. “Any capital asset that has a revenue stream associated with it could benefit.”

Michael Likosky, who heads the infrastructure practice at 32 Advisors, said incorporating more P3s in New Jersey would help the state realize savings from competitive bidding and incorporate better technologies with expertise of the private sector. He said this strategy has had success in neighboring Pennsylvania with bridge projects and provides potential to rethink financing strategies at New Jersey’s public universities, highways and New Jersey Transit.

“New Jersey has to focus again on economic development and growth, which has gone through a hiatus,” said Likosky, who has more nearly two decades of experience providing advice on P3s and infrastructure investment. “New Jersey has difficult choices to make if it wants to grow its infrastructure and economy.”

Likosky said since the bill includes a provision allowing availability payments for financing, there is a wide array of capital projects that could benefit from P3s, even if they don’t include dedicated revenue streams. He said not having P3 legislation on the books since late 2015 has limited the state’s options to address aging infrastructure.

(Read More)

bill-would-allow-cities-counties-to-opt-out-of-prevailing-wage

AG Healey Leads Multistate Effort to Curb Misclassification of Workers

Posted by National Alliance for Fair Contracting on

FOR IMMEDIATE RELEASE: 4/30/2018
Office of Attorney General Maura Healey
The Attorney General’s Fair Labor Division

The following are excerpts from the release:

Attorney General Maura Healey today led a coalition of 12 state attorneys
general in filing a brief to the National Labor Relations Board in support of a decision that
misclassification of employees as independent contractors constitutes an unfair labor practice in violation of the National Labor Relations Act.

…

“Employers that misclassify their employees cheat local and state governments from
collecting millions in taxes each year and create an unfair playing field for others,” said AG Healey. “I urge the National Labor Relations Board to uphold the decision in this case.”

According to the brief, misclassification is an increasingly common way for employers
to avoid their legal obligations to employees and to unfairly compete in the marketplace.
When employers misclassify their workers as independent contractors, it is significantly
harder for those employees to assert their workplace rights, including protections from wage theft, harassment and discrimination. Misclassified workers are also denied Occupational Health and Safety Act protections, and are unable to form unions, collectively bargain for wages and benefits, or join in concerted efforts to improve conditions in their workplace without fear of reprisal from employers.

Employers that misclassify their workers are also able to avoid paying unemployment
insurance and contributing to the worker’s compensation system, which poses significant cost in terms of lost revenue for state, local, and federal government. According to two studies cited in the brief, Massachusetts loses an estimated $259 million to $278 million annually, $87 million of which is in unpaid unemployment insurance taxes, because of misclassification. In 2015, the Massachusetts Council on the Underground Economy reported recoveries of more than $50 million from employers who misclassified their employees from 2013 to 2015.

…

The coalition of state attorneys general submitted today’s brief at the invitation of the National Labor Relations Board. Massachusetts and Pennsylvania led today’s brief, joined by Connecticut, Illinois, Maryland, Minnesota, New Jersey, New Mexico, New York, Oregon, Virginia and Washington.

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A.G. Schneiderman Leads 11 Attorneys General Opposing Trump Dept. of Labor Program to Offer Amnesty to Labor Law Violators

Posted by National Alliance for Fair Contracting on

PAID Program Encourages Violators to Require Employees to Waive State Law Protections – Like Higher Minimum Wage Levels – in Exchange for the Payment of Overdue Wages

Schneiderman Also Files Freedom of Information Act Request Seeking Information on Purposes of Program and Impacts on State Labor Enforcement Efforts

Schneiderman: We Won’t Hesitate to Prosecute Wage Theft – Even if the Federal Government Won’t

Posted on April 11, 2018 in Business News

NEW YORK – New York Attorney General Eric T. Schneiderman – leading a coalition of eleven Attorneys General – sent a letter to Labor Secretary Alexander Acosta raising serious concerns about the U.S. Department of Labor’s Payroll Audit Independent Determination (PAID) Program, a pilot program that allows certain employers who violate labor laws to avoid prosecution and penalties in exchange for simply paying the back wages their employees were already owed under federal law.

The letter makes clear that the PAID Program encourages employers to require their employees to waive important state law protections, like higher minimum wage levels and longer time periods to sue, in exchange for the employer’s payment of overdue wages. Even though such waivers may not be enforceable against state law enforcement entities, employees may be misled into believing they have no legal recourse to fully vindicate their workplace rights.

“As we’ve said from the start, the PAID Program is nothing more than a Get Out of Jail Free card for predatory employers. Our coalition of Attorneys General won’t stand by as the Trump administration grants amnesty to those who commit wage theft and take advantage of their employees,” said Attorney General Schneiderman. “I want to be clear to those doing business in New York: we will continue to prosecute labor violations to the fullest extent of the law, regardless of whether employers choose to participate in the PAID Program – because all workers deserve a fair day’s pay for a fair day’s work.”

(Read More)