Will ending union wages on Michigan public projects save money, or just lower pay? (MI)

Posted by National Alliance for Fair Contracting on

Lindsay VanHulle
June 12, 2018

Michigan Republicans last week narrowly repealed a 53-year-old state law that required contractors on public construction projects to pay union-rate wages and benefits.

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To Democrats and union members in the building trades, who erupted in anger after the vote tally was read, repealing the prevailing-wage law was yet another GOP-sponsored attack on working people – at a time when many Michiganders still feel like a decade-long recovery hasn’t helped them.

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The argument that repealing the law would make it harder to recruit people into the trades is one of a litany of criticisms offered by repeal opponents, who predict lower wages and no savings on state construction costs.

Will any of that happen in Michigan without prevailing wage?

Bridge asked two researchers, whose studies have been cited as evidence on both sides of the prevailing wage debate, to project what may happen in Michigan in the years ahead.

Frank Manzo IV is the policy director for the nonprofit Midwest Economic Policy Institute, an associate of the Illinois Economic Policy Institute. He has studied the effect of repealing prevailing wage, mostly recently in Indiana, and found it did not save money on construction projects and lowered worker wages. The group’s board of directors includes people who work primarily in the construction industry, including contractors and labor representatives.

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From your research, as a result of last week’s vote, what do you predict Michigan will look like five years from now?

Manzo: He said his group’s January study from Indiana found that repeal of that state’s “common construction law” in 2015 led to less-skilled workers in the field, more worker turnover, less productivity and lower wages.

Expect similar results in Michigan, he said.

“Any purported savings don’t materialize because productivity declines,” Matzo told Bridge.

…

(Read More)

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Seventh Circuit Revisits Contractor Misclassification

Posted by National Alliance for Fair Contracting on

Thursday, June 28, 2018
Hannesson Murphy

Courts in the U.S. have been grappling with the misclassification of independent contractors for more than 20 years. As our readers well know, there is no standardized test to determine whether a worker is a contractor. Various courts and government agencies all have adopted their own criteria. Fortunately, most of them overlap, but there can be critical differences in the factors and how they are applied.

In 2015, the Wage and Hour Division of the U.S. Department of Labor (DOL) firmly supported the “economic realities” test as part of a government sponsored misclassification initiative. While not breaking new ground by adopting the test, the DOL’s pronouncement did create somewhat of a splash at the time because it deliberately downplayed the relative importance of control over a worker – which previously had been viewed as the most important aspect of the contracting relationship. See Administrator’s Interpretation No. 2015-1 (July 15, 2015). In the years since its issuance, the DOL’s advisory opinion largely has been sidestepped by several tribunals charged with examining the issue in favor of their own well-worn standards.

A decision by the Seventh Circuit last week, Simpkins v. DuPage Housing Authority, appears to be the latest in that trend. In the case, Anthony Simpkins dutifully signed “independent contractor agreements” with the DuPage Housing Authority, in 2009 and again in 2012, to perform general labor, such as carpentry, maintenance, demolition and remodeling, on some vacant properties to get them ready for new occupants. This was a full time job, but provided no benefits and Simpkins was responsible for his own taxes. While the housing authority claimed he had the discretion on how to perform the job as he saw fit, the housing authority directed him on which jobs to perform and prioritized the order in which he would need to complete them. Simpkins objected to his status and repeatedly asked to be reclassified as an employee so he could get benefits, but his efforts were rebuffed.

After Simpkins was injured in a car accident, he filed suit to recover unpaid overtime and disability benefits under the FLSA, as well as under Illinois state law. The district court agreed with the housing authority that Simpkins was a contractor and granted summary judgment. On appeal, however, the Seventh Circuit reversed.

(Read More)

Simpkins v. DuPage Housing Authority, No. 17-2685 (7th Cir. 2018)

Register Now – 20th Annual NAFC Conference, August 19-22, 2018 – San Diego, CA

Posted by National Alliance for Fair Contracting on

June 2018

It’s our 20th Anniversary! Save the date and join NAFC at our next Annual Conference in sunny San Diego, CA. The Conference will be held at the Hilton San Diego Bayfront Hotel, in downtown San Diego. This year’s Conference will be jointly sponsored by the Center for Contract Compliance and will have a national as well as a California specific focus. The NAFC National Conference is attended by participants from across the nation, including representatives from labor organizations, responsible contractors, fair contracting compliance organizations as well as researchers, academics, attorneys and officials from federal, state and local governments.

Stay tuned for further information.

(Visit NAFC’s Conference Page)

(Download Joint Conference Registration Form)

Smart Cities Prevail Launches Multi-State Campaign On Prevailing Wage Laws

Posted by National Alliance for Fair Contracting on
TV and online effort will reach California and New Mexico

Source: Smart Cities Prevail
Wed, 23 May 2018, 16:21:14 EDT

SACRAMENTO, Calif., May 23, 2018 (SEND2PRESS NEWSWIRE) – Smart Cities Prevail today released a series of new TV advertisements on prevailing wage laws, part of a multi-state public information campaign launching in California and New Mexico.

“HT Tran” tells the story of an Iraq War veteran who came home after being wounded in combat to found the award winning general engineering firm Anvil Builders.

“I wouldn’t be alive today if all the guys I served with took shortcuts,” Tran says. “Taking care of workers doing dangerous and difficult jobs here at home is no different than taking care of soldiers in the army. Prevailing wage is an investment in well-trained local professionals who know how to get the job done right the first time.”

Research has shown that prevailing wage laws disproportionately impact veterans, because they work in construction at higher rates than non-veterans.

“Rebuilding America” highlights the important role that prevailing wage laws play in promoting local hiring and higher quality workmanship on schools, roads and other public projects. Research consistently shows that prevailing wage laws improve the economy and help generate more local middle-class jobs without increasing overall project costs.

“While the well documented economic and community benefits of prevailing wage have been long-validated by respected economists and earned these laws broad bi-partisan support, they are often not well understood by the public at large,” said Smart Cities Prevail spokesman Todd Stenhouse. “This campaign isn’t just about facts and figures – it’s about telling the story of what is at stake and who is really impacted by these laws. More often than not, it’s you or someone you know.”

Established in the 1930’s, prevailing wage laws establish the local market minimum wage on different types of skilled construction work. Typically, the wage includes a base wage, benefits and training contributions – based on surveys of workers performing similar jobs in the community.

(Read More)

NEW STUDY: Responsible Bidder Ordinances Promote Quality, Control Costs, and Provide Best Value for Taxpayers

Posted by National Alliance for Fair Contracting on

Date: May 22, 2018
Author: Jill Manzo

Responsible bidder ordinances (RBOs), which establish local construction standards on municipally funded public works, raise wages and reduce employee turnover according to a new study by the Midwest Economic Policy Institute(MEPI). As of May 2018, 40 Indiana counties, townships, cities, towns, school districts, and hospital districts have passed RBOs.

Nearly all governments award construction contracts to the lowest bidder, which can put pressure on contractors to cut corners on quality, wages, and safety. RBOs guarantee that contractors and subcontractors building public projects have proven track records of performance and legal compliance, adhere to local quality standards, and participate in USDOL-approved apprenticeship training programs.

Utilizing publicly-available data from the U.S. Census Bureau, the study examined county-level economic data on “heavy and civil engineering construction,” which includes the construction of public infrastructure such as highways, bridges, and parks. Overall, the researchers found that construction workers in 9 counties with RBOs are 1.6% less likely to leave or quit their jobs and construction workers earn about $500 more per month (or 8.3%) than their counterparts in jurisdictions without RBOs.

“By helping to raise incomes, reduce turnover, and boost productivity through apprenticeship training, RBOs help attract and retain the skilled construction workers that Indiana needs to build a 21st Century infrastructure,” said study co-author Jill Manzo. “RBOs can be a local solution to ensure that these vital projects are completed safely, on time, and on budget.”

MEPI’s analysis notes that RBO’s emphasis on quality and employment of higher-skilled workers provides additional safeguards for taxpayers, reducing the risk of design problems, cost overruns, change orders, and added safety risks.

(Read More)

(Executive Summary)

(Read Full PDF of Report Here)

House dumps GOP anti-construction worker scheme, again

Posted by National Alliance for Fair Contracting on

May 9, 2018 |1:24 PM CDT
BY MARK GRUENBERG

WASHINGTON (PAI)-In what is a perennial battle, a bipartisan coalition of representatives once again defeated right wing Republican Steve King’s scheme to cut construction workers’ pay by dumping the Davis-Bacon Act.

The 172-243 vote came during debate April 26 on legislation renewing the Federal Aviation Administration for another several years. Workers picked up another win on that measure when lobbying by all but one of the unions representing airline workers forced panel chairman Bud Shuster, R-Pa., to dump his plan to privatize the U.S. air traffic control system.

Privatization would have put the system under a supposedly non-partisan board dominated by the airlines. It also would eliminate current worker protections, the anti-privatization unions – including the Communications Workers, the Teamsters and others – said.

Only the National Air Traffic Controllers Association backed privatization. It claimed Shuster kept the worker protections in the new FAA bill, HR4. The House later passed the bill. The AFL-CIO supported the final version.

King tried to take out the construction workers’ pay by his perennial amendment, saying the Davis-Bacon Act would not apply to airport construction. Since the federal government, through ticket taxes, funds most airport construction, that would have cut the wages of any workers toiling on such projects.

Davis-Bacon was introduced and approved by Republicans in the depths of the Great Depression, in 1931. It mandates contractors on all federally funded construction pay locally prevailing wages, set by Labor Department surveys, to their workers.

(Read More)

Stealing From Workers Is a Crime. Why Don’t More Prosecutors See It That Way?

Posted by National Alliance for Fair Contracting on
It’s time for prosecutors to shift their focus to protecting the millions of workers who are victimized by their bosses each year.

By Terri Gerstein
5/24/2018

Last week, Manhattan District Attorney Cyrus R. Vance Jr. announced the indictment of a construction company, its principals, and others for theft of over $1.7 million, as well as for insurance fraud. Here’s the interesting part: The alleged theft in this case involved stealing from workers by illegally reducing their paychecks. Among other things, Parkside Construction and its managers allegedly altered time records in order to shave workers’ hours and thereby pay less money in wages than what was owed. Historically, that kind of malfeasance would get you a lawsuit, not get you arrested.

But things are changing, although not fast enough. This case exemplifies the leadership role increasingly played by a handful of prosecutors in pursuing predatory employers. Far more state and local prosecutors should take on this work; it is the right thing to do on the merits, and is especially needed now, as the federal government is abdicating its role of protecting our country’s workers.

Voters will soon have the chance to weigh in on this issue. There are scores of district-attorney seats in play in November, as well as over 30 state-attorney general elections. Criminal-justice advocates have rightly set their sights on these races, hoping to unseat some of the district attorneys whose “tough on crime” policies tend to be limited to offenses like drug violations or traffic infractions. Yet these contests also present an opportunity to elect leaders who understand the importance of judiciously using criminal law to address serious employer abuses, like wage theft, sexual assault, and utterly avoidable workplace injuries and fatalities.

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These trends don’t affect only workers. They also harm law-abiding businesses, who struggle to compete with bottom feeders. And employers who cheat their workers often cheat the government, too, under-reporting workers for tax purposes, and defrauding workers’-compensation-insurance carriers, leaving everyone else to hold the bag.

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Some prosecutors have begun to understand this perspective. In recent years, prosecutors in places as varied as El Paso and Minneapolis have brought charges in wage-theft cases, while in Philadelphia and Boston, they have taken on grossly negligent employers whose actions led to fatalities. And even before the #MeToo movement, there were arrests of sexually assaulting bosses, like the owner of the nation’s very last Howard Johnson’s, and the co-owner of a Boulder ice-cream company.

These cases demonstrate a growing movement of law enforcement at the grassroots, and one that should be recognized and treated as a priority, especially given the potential deterrent impact. While research shows limited to no deterrence resulting from certain kinds of criminal sanctions, such as capital punishment, there is evidence that some kinds of behavior, like tax compliance, can be affected by increased criminal enforcement and sanctions. And while there are no studies to date, common sense and anecdotal evidence both strongly suggest that employer workplace violations could be deterred by the specter of criminal prosecution.

(Read More)

State labor official criticizes U.S. Supreme Court decision

Posted by National Alliance for Fair Contracting on
Avakian says workers and businesses will be hurt by the use of arbitration clauses in employment contracts to bar workers from joining class-action lawsuits over workplace issues. High court voted 5-4 to side with the prohibition.

Peter Wong, Tuesday, May 22, 2018

State Labor Commissioner Brad Avakian says a U.S. Supreme Court decision will prove troublesome to businesses, not just workers.

“That was an absurd decision,” Avakian said Monday, May 21.

Avakian’s reference was to a 5-4 decision, which the Supreme Court issued Monday in three consolidated cases, that allow businesses to use arbitration clauses in employment contracts to bar workers from joining class-action lawsuits over workplace issues.

Under arbitration, a third party settles the dispute – and there is usually no alternative resolution.

The decision affects an estimated 25 million employment contracts.

“Arbitration agreements limit people’s ability to go to court if they want a jury trial,” Avakian said. “That was a strike against workers.”

The court ruled in a 2011 case that businesses can invoke arbitration clauses to bar consumers from filing class-action suits.

But in two of the three cases brought to the high court – all of them arguing that workers were underpaid – federal appeals courts ruled in favor of allowing class-action suits on wages and working conditions. One appeals court, however, did not – and the conflicting rulings prompted the high court to act.

Now individual workers will have to file separate lawsuits.

“For employees, class-action suits do not put all the burden of financing or supporting a case on one individual who might be going after a giant corporation,” Avakian said. “It balances the power by letting employees join together and carry the burden.”

(Read More)

Editorial: After Supreme Court decision, Congress must preserve workers’ right to sue

Posted by National Alliance for Fair Contracting on

Los Angeles Times May 22, 2018

A divided Supreme Court undercut American workers on Monday, ruling that employers can bar employees from bringing class-action lawsuits over wage and workplace disputes.

The court held in Epic Systems Corp. vs. Lewis that the right to collective actions guaranteed by the National Labor Relations Act does not bar employers from requiring disputes to be resolved individually through arbitration, as provided by the Federal Arbitration Act.

“As a matter of policy these questions are surely debatable,” Justice Neil M. Gorsuch wrote for the majority. “But as a matter of law the answer is clear.”

Whether the court’s decision is sound law is an argument for those versed in the fine details of statute and precedent. But mandatory arbitration is bad policy, and bad for workers.

Congress should step in restore workers’ ability to seek redress in the courts – either individually or as a group – rather than let bosses bar the door to the courthouse.

According to the Economic Policy Institute, some 60 million nonunionized private-sector employees work under agreements that preclude them from suing their employers over workplace disputes.

Arbitration can be a useful way of resolving a conflict without the expense and time investment of going through the courts.

But arbitration agreements are fair only if the two sides entering into them do so willingly and on equal footing.

If employers routinely force applicants to sign away the right to sue in order to get hired, then the two sides are clearly not entering arbitration willingly or as equals.

And studies have found that workers win arbitration cases at lower rates than they do court cases.

(Read More)

These U.S. Workers Are Being Paid Like It’s the 1980s

Posted by National Alliance for Fair Contracting on

In some parts of America, the Department of Labor hasn’t updated its “prevailing wage” for taxpayer-funded work in decades.

By Josh Eidelson
May 25, 2018, 4:00 AM EDT

Thanks to a web of loopholes and limits, the federal government has been green-lighting hourly pay of just $7.25 for some construction workers laboring on taxpayer-funded projects, despite decades-old laws that promise them the “prevailing wage.”

Over the past year, the U.S. Department of Labor has formally given approval for contractors to pay $7.25 for specific government-funded projects in six Texas counties, according to letters reviewed by Bloomberg. Those counties are among dozens around the nation where the government-calculated prevailing wage listed for certain work-like some carpenters in North Carolina, bulldozer operators in Kansas and cement masons in Nebraska-is just the minimum wage.

That’s in part because, according to publicly available data from the Labor Department’s Wage and Hour Division, the agency is relying on wage survey data in more than 50 jurisdictions that’s from the 1980s or earlier. Experts said that’s a far cry from what Congress intended when, starting with the Depression-era Davis Bacon Act, it passed a series of laws meant to ensure that private companies contracted for government-backed projects pay their workers at least in the vicinity of what others get for the same work in the same geographic area.

In an emailed statement, the Labor Department didn’t address whether the decades-old data is a problem.

“The Wage and Hour Division carefully plans where to survey on an annual basis to ensure that prevailing wage rates reflect the reality of construction pay practices in a locality. The division identifies potential survey areas based on a number of criteria, including where available data on active construction projects in an area reveal changes in local pay practices such that a survey is necessary,” the department said.

Because government contracts are often required to go to the “lowest responsible bidder,” supporters say prevailing wage rules prevent a “race to the bottom” in which exploitative companies who pay workers less outbid safer, higher-quality firms, and in turn drive down industry standards to pocket more taxpayer dollars. Opponents of prevailing wage rules counter that they’re intrusive mandates that waste money, inflating construction costs in order to help unionized firms beat non-union competitors.

(Read More)