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Prevailing Wage Requirements Expanded To Private Construction Projects (CA)

Posted by National Alliance for Fair Contracting on

by Richard E. Donahoo
Posted on July 19, 2019
Construction Law Wage and Hour Law

The San Jose Mercury News reported recently that prevailing wage requirements were expanded by San Jose to certain private construction projects. Labor groups herald this decision as a step toward better labor protections.

The San Jose City Council voted in June to require prevailing wage pay from contractors getting subsidies from the city for their projects. There are exceptions to the new ordinance that came in the wake of the sentencing of Silvery Towers project contractor Job Torres Hernandez.

Exceptions to the new requirements include:

  • Some affordable housing projects
  • Certain land-use categories where construction is unlikely without a subsidy

Additional requirements such as local hiring are expected to come up again when the council is back in session. Labor groups are particularly interested in adding local hiring guidelines, apprentice programs and programs for hiring disadvantaged workers associated with downtown high-rise development.

Some business groups including Silicon Valley Organization backed the prevailing wage vote in order to advance the downtown development.

Read the full story in “San Jose expands prevailing wage requirements on private construction projects” …

Prevailing wage rates are set to ensure that workers are fairly compensated for their work and that a strong and skilled workforce remain in place to provide quality construction skills for local construction projects. Prevailing wage rates for specific construction trade classifications (i.e. Laborer, Carpenter, Iron Worker, Traffic Control Technician, Operator and Teamsters) in California are set primarily by the Department of Industrial Relations, and are applied to projects funded by the public and awarded to contractors by public agencies also referred to as the “awarding bodies.” These projects often are also subject to apprenticeship requirements.

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SunCal Signs Project Labor Agreement with Building and Construction Trades For ‘6AM’ Development in Los Angeles Arts District (CA)

Posted by National Alliance for Fair Contracting on

by SunCal
Posted on Aug. 13, 2019
Construction Law Wage and Hour Law

LOS ANGELES, Aug. 13, 2019 /PRNewswire/ — SunCal, the developer of 6AM, planned to be a world-class, mixed-use development at 6th & Alameda in the heart of the Downtown Los Angeles Arts District, has entered into a Project Labor Agreement (PLA) with the Los Angeles/Orange Counties Building and Construction Trades Council and the unions they represent, it was announced today by SunCal and labor officials.

As envisioned, 6AM will be a mixed-use complex featuring live/work residences, creative offices, hotel and retail uses, and public gathering spaces on a 14.5-acre site. The project is currently proceeding through the entitlement process with the City of Los Angeles.

“We are very pleased to enter into this agreement with the Building and Construction Trades Council,” said David Soyka, Senior Vice President, SunCal. “This partnership between the developer and local, skilled construction workers will help ensure the project brings increased job opportunities and economic development to this area of Southern California.”

“The Building Trades are enthusiastic about contributing to the growth of the Arts District,” said Ron Miller, Executive Secretary, Los Angeles/Orange Counties Building and Construction Trades Council. “Together with SunCal, we’re bringing top-quality skills to this world-class project and enriching the LA economy by hiring union members who are LA residents.”

The 6AM development features a contemporary design by Herzog & de Meuron, one of the most acclaimed architects in the world and a winner of the coveted Pritzker Prize.

Inspired by the stark contrast between the vertical and horizontal in Los Angeles, the building design will be characteristic of the neighborhood which includes low and mid-rise warehouse buildings and narrow “in-between” passageways. The project will be located at the virtual center of the Arts District, and with the completion of the new 6th Street Viaduct, will become a gateway to the East; the Viaduct is also being constructed by the Building Trades.

The 6AM development program proposes: 1,305 rental apartments; 431 condominiums; 510 guest rooms in two hotels; 128,000 square feet of retail uses; 254,000 square feet of creative office space; a 29,000 square-foot school; and a 23,000 square-foot opportunity space. It is also planned to include two large open spaces; extensive integration of terraces and roof decks; and pedestrian-only open spaces, incorporating two major urban parks. Visually prominent at the complex will be two 58-story residential towers that respond to the shapes and scale of the Downtown skyline.

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Unlicensed subcontractor that installed sprinkler system kicked off Whiskey Row hotel project (KY)

Posted by National Alliance for Fair Contracting on

By JOE SONKA | August 6, 2019 4:35 pm

The Metro Department of Codes and Regulations issued a written warning on May 31 to a contractor working on the construction of a new twin hotel project on Whiskey Row downtown, declaring that it was violating state and city law by subcontracting an unlicensed company to install the hotels’ fire sprinkler system.

A spokeswoman from Louisville Forward also confirmed that the unlicensed subcontractor improperly installed the hotels’ sprinkler system, which was now being replaced by new contractors.

The 14-story twin hotels being constructed on First and Main streets are that of Hotel Distiland Moxy, a project of Indiana-based hospitality company White Lodging that is scheduled to open in November.

The Codes and Regulations administrative warning was sent to SimplexGrinnell – a fire sprinkler company that is a subsidiary of international giant Johnson Controls – which was the designated contractor permitted by the city to install the hotels’ sprinkler system, having received the proper licensing from the city and state.

However, the warning letter went on to state that the subcontractor hired by SimplexGrinnell to install the sprinkler system “did not hold any type of Kentucky Fire Sprinkler License,” adding that it is a violation of state law to have such a system worked on by someone other than the certificate holder.

The warning letter from Codes and Regulations executive administrator Paul Nicholson added that it was the department’s understanding that SimplexGrinnell “remedied the situation” and was now in compliance with the law, but warned that any further violations “may be subject to further action being taken, up to and concluding suspension of your current license with Metro Louisville.”

A Louisville Forward spokeswoman, Caitlin Bowling, confirmed to Insider Louisville that the unlicensed subcontractor was IMP Mechanical, a firm based in Fayetteville, Ga., and that some of its work on the fire sprinkler system was improper and had to be reinstalled.
Bowling said that Codes and Regulations is “making sure things are installed correctly and there are licensed workers,” adding that the department has been “working with the developers and contractors to make sure everything is in order.” She also stated that warnings are typically issued before formal citations for violating city and state codes, as it gives contractors an opportunity to rectify the problem.

Spokespersons for White Lodging, SimplexGrinnell and Johnson Controls have not yet replied to emailed questions for this article.

Thomasina Brown, a registered agent with IMP Mechanical, told Insider that she vigorously disagreed with the assertion of Codes and Regulations in the warning letter about the subcontractor having to be licensed in Kentucky, saying that since the company’s workers were independent contractors instead of employees, only Johnson Controls had to be licensed.

Todd Johnson, a local union organizer for the Road Sprinkler Fitters UA Local 669, told Insider that he and others warned state and city departments weeks before the Codes and Regulations letter in May, expressing concern about what he called untrained and uncertified workers improperly installing safety features at the behest of an unlicensed, out-of-state subcontractor.

In a May 15 letter to the Department of Housing, Building and Construction in Frankfort, the prominent Kentucky labor attorney Dave Suetholz wrote that IMP was committing “major code violations” that were under investigation by Metro Codes and Regulations after an informal complaint was submitted, asking the state department to assist in that effort.

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Illinois lawmakers consider bill to make general contractors responsible for other’s unpaid wages (IL)

Posted by National Alliance for Fair Contracting on

By Cole Lauterbach
The Center Square | Jul 19, 2019

Illinois lawmakers are considering sending Gov. J.B. Pritzker legislation that would put general contractors on the hook for any wages a subcontractor failed to pay workers.

The House passed the legislation this spring. Should Pritzker sign the bill into law, any general contractor who hires a subcontractor that doesn’t properly pay employees could be sued for those wages.

Sponsoring Senator Laura Fine, D-Glenview, said wage theft has become common

“Wage theft could range anything to not paying workers for hours they work to not paying the legal minimum wage,” she said.

Fine said she wanted to get as much feedback from opponents as possible, signaling that she may amend the bill.

Bill Ward of the Homebuilders Association of Illinois said no one supports wage theft, but the bill, as it’s written, would increase costs for companies due to the increased risk of getting sued.

“This bill says an innocent person who has paid the subcontractor in whole, the general contractor, can be gone after,” he said.

Fine said the bill would allow general contractors to be exempt from the law if they get verification from the subcontractor that they’ve paid all of their people, but Republicans in the House said that would be a significant burden for a general contractor to undertake.

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Mendoza signs prevailing wage executive order (IL)

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By Jerry Nowicki
Aug. 14, 2019

SPRINGFIELD – With a $45 billion, six-year capital infrastructure plan becoming law earlier this year, Illinois Comptroller Susana Mendoza signed an executive order Tuesday aimed at refocusing enforcement of state prevailing wage laws for construction projects receiving state money.

“When I took office in 2016, we made sure to let folks know that … our goal is to continue to enforce this executive act. What we’re doing now is just reaffirming it and updating it and getting the word out as we embark on a $45 billion capital plan that this is state law, people need to be aware of it, they need to abide by it.”

Prevailing wage is the rate of compensation determined by the government that must be paid to workers for projects involving state government funding.

At a news conference in her office Tuesday, Mendoza warned of halted checks for any contractor if it comes to her attention workers are not receiving the prevailing wage.

Mendoza said anyone believing a company is in violation of the act could notify her office.

“They would notify us, we would look into that alongside the Department of Labor, and we have the potential to stop payments, further vouchers going out, further warrants, essentially, being sent out until that corrective action is taken,” she said.

Mendoza’s executive order outlines other steps her office will take to ensure contractors pay their employees the prevailing wage as well. The executive order says her office will not accept any grant or contract submissions without proof that the contractor is in compliance with the prevailing wage act, and would have the authority to “pre-audit” any state-funded contracts as well.

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Mendoza says she’ll withhold pay from capital plan contractors who don’t pay prevailing wage (IL)

Posted by National Alliance for Fair Contracting on

By Doug Finke
Posted Aug 13, 2019 @ 5:21 pm

Comptroller Susana Mendoza said Tuesday her office will monitor contracts awarded under the state’s new $45 billion capital program to ensure contractors are adhering to prevailing wage laws.

If someone doesn’t, Mendoza said, her office will take steps to halt any payments until the contractor comes into compliance.

“We know (prevailing wage) is the law, but not everybody follows it,” Mendoza said. “What we have is a $45 billion capital plan that we are about to embark on. Anything we can do to make sure that state taxpayer dollars are being utilized (in a way that) that state law says that they must is important to get the word out and educate the public.”

Mendoza said her office will monitor and conduct preaudits of contracts and grants awarded under the Rebuild Illinois capital plan. She said her office is prepared to receive complaints from people who are aware of prevailing wage violations and will also work with the Department of Labor on complaints it receives. Attempts will be made to bring a contractor into compliance, but if all else fails, the office has a nuclear option.

“What we have the ability to do that no other state agency or no other constitutional officer has the ability to do is withhold payment,” Mendoza said.

Mendoza acknowledged the problem of prevailing wage violations is not widespread.

“Every now and then we get complaints of folks who are in violation,” she said.

Mendoza said contractors with the state have to check a box on forms pledging to adhere to the prevailing wage, so the existence of the law should come as no surprise.

Some Republicans, notably former Gov. Bruce Rauner, believed the prevailing wage law forced up the cost of public works projects.

“I disagree with this being framed as bloated and higher costs,” said Illinois AFL-CIO President Michael Carrigan. “Prevailing wage is a product of collective bargaining. Unions and employers sit down and have hard negotiations across the table. Those are a product of negotiation.”

Former Comptroller Dan Hynes, who is now a deputy governor in Gov. J.B. Pritzker’s administration, signed a similar executive order in 2002. However, enforcement of the order has fallen off in recent years.

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Gov. Whitmer Signs Executive Directive to Put Michigan Jobs First (MI)

Posted by National Alliance for Fair Contracting on

Posted: 9:39 PM, Jul 29, 2019
By: FOX 47 News

LANSING, Mich. – Today Governor Gretchen Whitmer signed the Michigan Jobs First executive directive at Lecom Utility Contractors in Roseville to revamp the State’s purchasing policies to ensure that the State awards contracts to companies that create good-paying jobs in Michigan and are good stewards of the state. Currently, only 70 percent of state contracts are awarded to in-state businesses.

“Michigan is home to the hardest working people and best businesses in the world, and our state should work to ensure that more of our Michigan tax dollars support Michigan workers and businesses at every opportunity,” Whitmer said. “We want Michigan to be a home for opportunity for everyone, which begins with supporting businesses that provide fair wages and good benefits. This executive directive will strengthen our commitment to these priorities and bring the greatest possible benefit to Michigan’s businesses, workers, and families.”

Executive Directive 2019-15 expands the list of factors used to determine whether a bid from a potential supplier would provide the best value to the state. Under this new directive, the state must also take into account the overall economic impact of the potential supplier’s bid on Michigan businesses and workers, the wages and benefits offered by the supplier to its workers, the supplier’s track record of labor and environmental compliance, and the supplier’s commitment to economically-disadvantaged zones.

In addition to expanding best value factors, the executive directive also ensures that Michigan businesses receive the full preference to which they are entitled under law when the State makes its purchasing decisions.

“Across Macomb County and the great state of Michigan, there are thousands of incredible businesses with innovative products and outstanding services,” said Macomb County Executive Mark A. Hackel. “It makes sense for the state to prioritize our homegrown job creators and I applaud this effort. Our business development team will engage Macomb County companies and take advantage of the Michigan Jobs First executive directive.”

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Sen. Gary Peters wants to hear from workers victimized by wage theft (MI)

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By Anne Runkle
August 5, 2019

U.S. Sen. Gary Peters (D-Michigan) wants to hear from workers who have been victims of wage theft.

Peters is conducting an investigation into wage theft practices, which could include:

  • Failure to pay the applicable minimum wage
  • Failure to compensate employees for overtime
  • Misclassifying employees as independent contractors to avoid paying certain benefits or taxes.

Peters, ranking member of the Senate Homeland Security and Governmental Affairs Committee, has directed the committee’s minority staff to conduct an investigation focused on these and other actions that prevent employees from receiving all of their pay.

If you have information to share regarding your personal experiences with wage theft, visit https://www.hsgac.senate.gov/contact/investigations.

“If you put in a hard day’s work, you deserve to get paid for it. Yet every day, workers in Michigan and across the country are denied wages or benefits they have earned on the job,” said Peters. “This investigation will help expose wage theft and develop ways to hold employers who break the rules accountable for actions that hurt hard-working families.”

Wage theft has serious financial consequences for workers and businesses, according to a release from Peters. The Economic Policy Institute estimates that American workers are shorted as much as $15 billion each year due to minimum wage law violations.

Michigan has the fifth highest total of unpaid earnings in the country due to minimum wage violations.

According to EPI, from 2013 to 2015, roughly $430 million in wages were improperly withheld from Michigan workers.

Misclassifying workers as “independent contractors” also negatively impacts taxpayers. According to the U.S. Department of the Treasury, millions of employers nationwide have failed to pay more than $45 billion in employment taxes.

These practices deprive the federal government of billions of dollars in unpaid employment taxes that are used to fund Social Security, Medicare and other benefits, according to the release.

In Michigan alone, a study released in 2008 found that Michigan loses tens of millions of dollars annually from improper classification practices – depriving the state of dollars for projects like highway and infrastructure upgrades, educational programs or public hospitals.

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Minnesota Building Trades Announce Plans to Fight Wage Theft, Exploitation, Labor Trafficking (MN)

Posted by National Alliance for Fair Contracting on

By Filiberto Nolasco Gomez
Workday Minnesota
July 26, 2019

BRAINERD
Leaders of 14 unions that represent Minnesota’s unionized construction workforce Thursday announced the launch of a new initiative to combat wage theft, exploitation, and labor trafficking, which they say pose a growing threat to the welfare of immigrant workers and the health of the state’s construction industry.

The Not On My Watch campaign will enlist union staff and rank-and-file members in efforts to identify cases of abuse, and to assist exploited construction workers. Union construction workers will be asked to wear hard-hat stickers that read “Not On My Watch” or “Ya No Mas” and participate in job-site actions to show solidarity with immigrant construction workers who may be vulnerable to exploitation by unscrupulous contractors.

“This initiative is about ensuring that no construction workers in our state are exploited and that all contractors are held accountable to the law,” said Jessica Looman, Executive Director of the Minnesota State Building and Construction Trades Council, “In Minnesota, workers stand-up for workers.”

Union members and nonunion workers joined forces last month at a rally to protest allegations of wage theft by immigrant concrete workers building the Digi-Key Expansion Project in Thief River Falls, Minnesota that was widely covered on TV and in print. A second major rally is planned for downtown Minneapolis on Monday, July 29, immediately before a Minneapolis City Council hearing on a proposed wage theft ordinance.

Minnesota Building Trades leaders were joined at the unveiling of their wage theft initiative by Attorney General Keith Ellison welcomed the announcement.

“Wage theft is theft, pure and simple. Not only does it rob workers of their ability to afford their lives, it robs them of their dignity,” Attorney General Ellison said. “It’s also often the canary in the coal mine for other serious abuses, like denial of healthcare and human trafficking, which we’ve seen right here in Minnesota. I’m proud that our new law against wage theft is the strongest in the country, but we in government can’t fight it alone. That’s why I’m grateful for the ‘Not On My Watch’ and ‘Ya No Más’ campaigns. It’s powerful that workers themselves will be on the front lines in helping us fight wage theft and helping all workers afford their lives and live with dignity and respect.”

Nancy Leppink, Commissioner of the Minnesota Department of Labor and Industry also welcomed the announcement. “The State of Minnesota is committed to combating wage theft, but we can’t do it alone,” said Commissioner Leppink. “We will need the help of labor, community leaders, responsible employers, and of course workers themselves, to make sure workers know their rights and can bring abuses to light.”

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ROCHESTER WAGE THEFT CASE IS THE FIRST INVESTIGATION UNDER A NEW LAW (MN)

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According to The North Central States Regional Council of Carpenters, worker exploitation is a common practice in the Med City.

Posted: Jul 9, 2019 7:22 PM
Posted By: Annalise Johnson

ROCHESTER, Minn. – A group of Rochester area workers are pursuing a wage theft claim against Ed Lunn Construction. Workers allege Ed Lunn Construction duped them out of thousands of dollars in wages after working the majority of 2018 on a $40 million, city-funded affordable housing project that’s now filling with residents.

Lunn denies legal responsibility and says a subcontractor employed the workers who are accusing him of wage theft.

A new bipartisan law went into effect July 1st aimed at cracking down on wage theft. It doubles the amount of state investigators working on wage theft cases. Violaters can face 5 years prison and a $10,000 fine. The law will be enforceable beginning August 1st.

KIMT spoke to Mike Wille, business agent for North Central States Regional Council of Carpenters. The union advocates for workers rights. He tells KIMT that a labor broker business model exploits workers. He says employees often work long hours without overtime pay and don’t receive workers compensation of unemployment insurance. “They don’t get paid for the work that they performed, or they’ll perform work and they’ll withhold the money and then they’ll pay them for the past work as they do work in the future, so it’s like they’re dangling a carrot in front of this person and the carrot is the money they’re owed,” he explains.

According to Wille, roughly 70% of apartments and hotels built in Rochester in the last five years are built under this business model. “Shirking their responsibilities back onto the employees helps them keep their costs down and enables them to basically cheat and win jobs from contractors that play by the rules,” he says.

Minnesota’s new wage theft prevention law is one of the strongest in the country. “I hope it sets a precedent and a standard across the country for all states and cities and counties to abide by because there is no place for this kind of practice anywhere in the United States,” says Wille. “We’re better than that and our workers deserve better than to be cheated out of their wages.”

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