Indiana, Illinois, Iowa Foundation for Fair Contracting Applauds Updates to Valparaiso, in Responsible Bidder Ordinance

Posted by National Alliance for Fair Contracting on

FOR IMMEDIATE RELEASE: May 30, 2024
CONTACT: Jill Gigstad, III FFC

In early July, the Valparaiso City Council voted unanimously to amend and strengthen the city’s local Responsible Bidder Ordinance (RBO), focusing on apprenticeship requirements for contractors bidding on publicly funded projects.

An RBO is a resolution incorporated into a public body’s procurement codes, outlining specific criteria contractors must meet to be eligible for public contracts. These ordinances ensure that public projects are awarded to contractors who are not only responsive but also responsible, employing skilled tradespeople, delivering superior work quality, and providing greater value to taxpayers by prioritizing training, labor, and safety. Since 2021, over 50 RBOs have been passed by local governments across Indiana.

Valparaiso has had an RBO in place since 2016. However, recognizing the need for more specific guidelines, the city has now updated the ordinance to include detailed requirements for apprenticeship graduation rates. The revised ordinance mandates that contractors and subcontractors bidding on Valparaiso public works projects worth at least $150,000 must participate in an apprenticeship training program that has graduated at least five apprentices each year for the last five years for each of the construction crafts the company will perform on the project.

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Updated federal grant guidance will help create good jobs

Posted by National Alliance for Fair Contracting on

Bart Sheard
June 28, 2024

Recently, the Biden-Harris administration issued important updates to the Office of Management and Budget’s Guidance for Federal Financial Assistance, also known as the “Uniform Grants Guidance,” which sets parameters for how states and localities, and others, can spend federal money and award it to private entities.

These updates streamline and clarify requirements that will give state and local governments more opportunities to ensure federal funds are used efficiently while also advancing specific community goals and initiatives like good jobs, equity in recruitment and hiring, environmental sustainability, and uninterrupted delivery of services.

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NJDOL: Prevailing Wage Reminder for School Construction Work

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New Jersey Business & Industry Association
June 25, 2024

Effective Aug. 15, contractors performing public work for schools and local governments are required to report certified payroll records via the online NJ Wage Hub portal as part of the state’s efforts to ensure compliance with prevailing wage laws.

Both public works contractors and contracting public bodies are urged to create their online accounts at the NJ Wage Hub well in advance of this date, the Department of Labor and Workforce Development said this week.

The DOL said that summer is typically a busy time for school districts that are hiring contractors to do construction work at their facilities and the state wants to ensure that both school boards and public contractors are following the rules.

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Minnesota Legislature Passes Prevailing Wage and Worker Protection Policies With Support From North Star Policy Action

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Jake Schwitzer
Sarah Hinde

May 22, 2024

Minnesota is now the first state in the nation to add prevailing wage requirements to LIHTC-funded affordable housing projects

Late Sunday, May 19, 2024, the Minnesota Legislature passed a large omnibus package that included prevailing wage requirements for affordable housing projects that receive funds from Low-Income Housing Tax Credits (LIHTC).

Wage theft and worker exploitation have been persistent problems in Minnesota’s construction industry. Since 2016, workers on 25 projects that received approximately $31 million in LIHTC funding were potentially at risk of exploitation by known problem contractors. North Star Policy Action (NSPA) played a critical role in passing the provisions that will prevent continued worker abuse and exploitation, including releasing a report in November of 2023 that detailed the flow of public funding to contractors with long histories of abusing workers. Jake Schwitzer, NSPA’s executive director, testified in numerous legislative committees during the 2024 Legislative Session about the issue, helping secure inclusion in the omnibus bill.

“The passage of these worker protection provisions is an historic step for worker’s rights, and displays national leadership coming out of Minnesota. Our research exposed disturbing facts about public funding supporting known bad actors in the construction industry, and we are so thankful that the legislature responded to our findings to protect Minnesota’s working people.” Executive Director of NSPA Jake Schwitzer said. “We hope that this bill serves as a roadmap for other states to ensure that taxpayer funded housing projects don’t continue to fuel wage theft, payroll fraud, and other forms of worker exploitation. Thank you to the members of the Minnesota Legislature, Minnesota Housing Finance Agency, Minnesota Department of Labor and Industry, and Governor Tim Walz for your commitment to making Minnesota the best state in the nation for working people.”

LIHTC is one of the most common sources of public financing for affordable housing projects, yet these programs rarely include robust labor standards such as prevailing wage requirements. This legislation makes Minnesota the first state in the nation to add prevailing wage requirements to LIHTC-funded affordable housing projects.

Prevailing wage laws establish minimum wage and benefit levels based on the wages paid for similar jobs in the county where the construction project is taking place. These laws ensure that work on government-funded projects does not undermine local wage standards. The legislation also extends new worker protections across all projects supported by Minnesota Housing Finance Agency, like transparency of who is working on these projects, a Responsible Contractor Standard, and accountability for developers that repeatedly allow wage theft to occur on their projects.

“I want to thank North Star Policy Action for shining a light on what is an egregious problem that we need to solve, said Representative Mike Howard, Chair of the Housing Finance and Policy Committee earlier this legislative session. “When I first read this report I viewed it as a call to action. There is no way, no how that public dollars should ever support the kind of worker exploitation that is detailed in that report. We absolutely can and must build more affordable housing across Minnesota and we absolutely can and must do so in a way that pays living wages and honors and respects the Minnesotans who are building these homes, and that’s what this bill will do.”

Worker protection policies have tangible impacts on Minnesotans and families, such as Arturo Hernandez, who faced labor abuses while working for Painting America, a drywall and painting contractor. In 2019, he testified before the Minnesota House of Representatives Labor Committee, stating that his foreman had insisted on paying him with drugs, claiming he could make more money by selling them. Arturo refused and reported the incident to both Painting America and an enforcement agency. However, no action was taken against the company or the contractor, and Arturo has not been compensated for his three weeks of work. Legislation such as this ensures workers will be protected from similar exploitation.

“I’ve personally been a victim of exploitation in the housing construction industry,” said Hernandez.. “I was very glad to see the legislature take action on this issue and hope that it will protect me and workers like me from these abuses in the future.”

Minnesota Session Laws – 2024, Regular Session

Parents Sue Over Construction Worker Death at Metro School

Posted by National Alliance for Fair Contracting on

Stephen Elliott

June 3, 2024

The case partially inspired the proposed contract compliance board aimed at workplace safety, wage theft allegations

The parents of a 20-year-old Guatemalan laborer who died last year after falling from the roof at South Nashville’s Glencliff High School are suing Metro, the school system, an insurance company and two contractors, alleging negligence, wrongful death and discrimination.

The parents of Denis Geovani Ba Ché, who live in rural Guatemala, filed the lawsuit Friday afternoon in Davidson County Circuit Court, represented by Stranch, Jennings & Garvey attorney Kerry Dietz. She also represented the family of 16-year-old Gustavo Ramirez, who died in 2020 while working on a hotel project near Nissan Stadium.

“I’ve really seen how easy it is for workers — especially minority workers, especially immigrant workers — how easy it is for them to slip through the cracks,” Dietz told the Banner. “There are very few, if any, mechanisms in place to catch safety violations on projects like this.”

In addition to the Metro government and Metro Nashville Public Schools, the complaint names primary contractor Eskola, subcontractor Jr. Roofing & Construction and Builders Mutual Insurance Company as defendants. The complaint allows other plaintiffs to join the case, alleging that the young worker was not adequately trained or supervised. Additionally, the complaint links the worker’s Latino heritage to the majority Latino population at Glencliff.

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Federal Court Orders 4 Arizona Contractors to Pay Over $3.2m in Owed Wages, Damages to 890 Workers after Department of Labor Investigations

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: April 22, 2024
Release Number: 24-608-NAT

Employers also liable for $95K in penalties for overtime, minimum wage violations

PHOENIX – The U.S. Department of Labor announced today that efforts to protect residential construction workers from unlawful pay practices have recovered a total of $3.2 million in wages and damages from four Arizona contractors for 890 workers.

After a series of investigations, the department’s Wage and Hour Division determined that 4-E Painting LLC and Liberty Constructors LLC in Mesa and BCK Coatings Inc. and Geronimo Wall Systems LLC in Tempe willfully and recklessly shortchanged the affected workers and violated the overtime and minimum wage provisions of the Fair Labor Standards Act.

The division’s investigations found:

  • 4-E Painting LLC did not pay overtime wages when the employer paid employees piece-rate wages for painting work or a combination of hourly wages and piece-rate wages. The division determined 4-E Painting owed $432,633 in overtime wages and an equal amount in liquidated damages to 158 workers. The department also assessed $24,732 in penalties.
  • Liberty Constructors LLC denied employees required overtime pay and tried to conceal its violations by falsely showing a higher hourly rate or fewer hours worked on payroll records. The division found the contractor owes $401,049 in unpaid wages and $401,049 in liquidated damages to 100 employees. The department also assessed $17,900 in civil penalties.
  • Geronimo Wall Systems LLC denied overtime pay to 195 employees for hours over 40 in a workweek. The lath, stucco, siding and stone contractor misclassified many of the employees as independent contractors. The division determined the employer owes $443,115 in overtime wages and $443,115 in damages to 195 employees, and the department assessed $22,770 in civil money penalties.
  • BCK Coatings Inc. failed to pay required overtime wages for hours over 40 in a workweek. The apartment remodeling contractor misclassified employees as independent contractors, made improper deductions of up to $20 per week from employees’ pay, required workers to cash their paychecks at a check-cashing business that charged a fee and failed to pay one employee for eight weeks of work. The investigation found BCK owes $360,000 in unpaid minimum and overtime wages and an equal amount in liquidated damages to 437 employees. The department also assessed $30,000 in penalties for the employer’s willful violations.

“Our investigators have found that schemes to pay straight-time for all hours worked and avoid paying required overtime rates at time and one-half are pervasive among employers in Arizona’s construction industry,” said Wage and Hour Division District Director Eric Murray in Phoenix. “These unlawful practices create the false impression that piece-rate workers’ wages comply with the Fair Labor Standards Act when, in fact, these employees are being stripped of their earned wages. The Wage and Hour Division is committed to holding employers accountable and ensuring that they do not obtain an unfair competitive advantage by denying workers their full wages.”

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Study Shows that Project Labor Agreements Promote Bid Competition, Control Costs, and Expand Pathways to Skilled Construction Careers

Posted by National Alliance for Fair Contracting on

ILEPI – May 7, 2024

Analysis of Port of Seattle Projects Offers Key Insights Into Potential Impact of New Federal Contracting Rules

La Grange, IL: A first-of-its-kind analysis of construction projects from the Port of Seattle between 2016 and 2023—including airports and seaports—shows that project labor agreements (PLAs) promote competition amongst contractors, control construction costs, and deliver superior workforce development outcomes over projects completed without PLAs. The report was conducted by researchers at the Illinois Economic Policy Institute (ILEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign.

Read the Report, The Impact of Project Labor Agreements on Competition, Costs, Apprenticeships, and Diversity:  Evidence from Port of Seattle Projects here.

Project labor agreements are pre-hire agreements between construction project owners and labor organizations that establish the terms and conditions of employment for skilled craft workers on large infrastructure projects. They have a long history as a de-risking mechanism and construction management tool for both the public and private sectors, ranging from the Tennessee Valley Authority in 1930s to the construction of most modern NFL stadiums today. In 2022, President Biden signed an Executive Order to require PLAs on federal projects valued at more than $35 million. Most PLAs include provisions for preventing strikes and lockouts, creating uniform work rules and safety standards, harmonizing schedules between different types of crafts, and addressing skilled labor supply needs.

“As is the case with many policies involving labor standards, there is a great deal of mythology around PLAs and their impact on businesses seeking to compete for bids, on costs borne by project owners and taxpayers, and on the broader workforce supply needs of the construction industry,” said study coauthor and ILEPI Economist Frank Manzo. “With trillions in new infrastructure funding and an Executive Order from President Biden expanding the utilization of PLAs, data from Port of Seattle projects offers a useful comparative analysis that will help communities and policymakers separate myth from fact and maximize the impact of these investments.”

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Tennessee workers at VW plant vote to unionize with UAW

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Todd A. Price
Gary Estwick

April 19, 2024

Volkswagen workers in Chattanooga overwhelmingly voted to join the United Auto Workers late Friday, giving the union a decisive foothold in the historically anti-union South.

Nearly three quarters of the workers voted to support the UAW, according to the final results from the National Labor Relations Board. Of the 4,326 workers eligible to vote, more than 3,600 casts ballots over the three-day election.

As the votes were counted Friday night, first a trickle — and later, a wave — of bold, red T-shirts with white lettering peppered the union hall Friday evening at I.B.E.W. Local 175.

Joseph McMullen walked into the hall around 9 p.m. expecting many of his Volkswagen colleagues to have voted to establish a union. But he was not prepared for the overwhelming pro-union support displayed on a projection screen.

“I think that matters,” said McMullen, an Alabama native who works in the quality department. “It sends a message.”

When the news of the final victory was announced, members of the crowd jumped, cheered and hugged. Minutes later, UAW president Shawn Fain arrived to congratulate VW workers.

“Many of the talking heads and the pundits have said to me repeatedly, before we announced, that you can’t win in the South,” Fain told the cheering crowd. “But you all said, ‘Watch this.’ You all moved the mountain.”

The victory came despite strong opposition from a coalition of six Southern governors, including Tennessee Gov. Bill Lee. On Tuesday, Lee penned a letter which urged workers to reject unions.

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US Department of Labor Recovers $1.5m for Laborers, Mechanics Working On Multi-Billion-Dollar Federal Program at California Navy Base

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: March 20, 2024
Release Number: 24-468-SAN

35 contractors violated federal labor laws, shortchanging 413 workers

SACRAMENTO – Widespread violations of federal labor and contracting regulations by nearly three dozen employers with federally funded contracts at Naval Air Weapons Station China Lake resulted in the U.S. Department of Labor recovering more than $1.5 million in back wages and damages for more than 400 workers at the Ridgecrest facility.

Part of an initiative by the department’s Wage and Hour Division, the investigations sought to ensure contractors working on the $3.9 billion earthquake recovery program at NAWS China Lake met federal regulations for the employment of workers on projects supported with federal funds. The initiative seeks to bring construction employers into compliance and hold them responsible for paying workers prevailing wages and health and welfare benefits as required.

In investigations of 35 contractors spanning a two-year period, division investigators recovered more than $1.5 million in back wages and $32,291 in liquidated damages for a total of 413 workers for violations of the Davis-Bacon and Related Acts, the Contract Work Hours and Safety Standards Act, the Service Contract Act and the Fair Labor Standards Act. The division also assessed employers with $14,020 in civil money penalties as a result.

“Federal projects like these often strengthen the region’s economy, but when employers fail to pay workers all the required wages and fringe benefits they’ve earned, the full benefits are not felt,” explained Wage and Hour Division Regional Administrator Ruben Rosalez in San Francisco. “Employers unclear of their legal obligations and workers unsure of their rights can contact us to learn what it takes to comply with federal laws.”

Among the largest violators were subcontractors working on projects awarded to Environmental Chemical Corp., a Burlingame design and construction company doing business as ECC. The company was awarded two contracts as part of the Earthquake Recovery Program, including the largest construction project, the South Airfield Complex at NAWS China Lake. The subcontractors found in violation include:

  • Adecco USA Inc., a Jacksonville, Florida, recruitment and staffing service, failed to pay required prevailing wage rates, health and welfare benefits, and overtime while providing temporary staffing for food service, clerical, maintenance and housekeeping work. The division recovered $626,341 in back wages for 115 workers – some of whom were owed nearly $40,000 – for the violations.
  • Blue Knight Security & Patrol Inc., a Rancho Cordova security guard and patrol service providing security at a temporary housing site for construction workers, failed to pay overtime wages, prevailing wage rates and health and welfare benefits as required by law. The division recovered $313,045 in back wages for 54 workers.
  • Hensel Phelps, a Greeley, Colorado, commercial and institutional building contractor providing construction services, failed to pay prevailing wage rates, health and welfare benefits, and overtime compensation. The division recovered $184,172 in back wages for 37 workers.
  • ATCO Structures and Logistics, a Spring, Texas, prefabricated wood building manufacturer building living units for construction employees, failed to pay prevailing wage rates and overtime wages. The division determined ATCO owed $104,935 in back wages to seven workers.

In addition to these contractors, 31 additional contractors violated federal labor laws. View a list of all employers cited in these investigations.

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Executive Order on Scaling and Expanding the Use of Registered Apprenticeships in Industries and the Federal Government and Promoting Labor-Management Forums

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White House
March 6, 2024

By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:

Section 1.  Policy.  My Administration’s Investing in America agenda includes a once-in-a-generation investment in our Nation’s infrastructure.  This agenda is also driving the creation of well-paying jobs and growing the economy sustainably and equitably, and it will continue to do so for decades to come.  To fully realize the benefits of these investments, students and workers at all stages of life need equitable access to education and training for the good jobs in their communities.

Critical to achieving these goals is promoting Registered Apprenticeships, as described in title 29, parts 29 and 30, of the Code of Federal Regulations, which provide substantial benefits to both workers and employers.  As the Nation’s largest employer and procurer of goods and services, the Federal Government can be a model for the use and promotion of skills-based hiring, such as the use of Registered Apprenticeships, which reduces barriers to employment and attracts a diverse workforce to meet our Nation’s critical needs.  My Administration has made strengthening and empowering the Federal workforce a management priority.  As a part of its overall strategy to hire, retain, and develop the people needed to accomplish executive department and agency (agency) missions and to create equitable, transparent, and transferable career-development pathways, the Federal Government can scale and expand Registered Apprenticeship programs to modernize and broaden avenues to Federal jobs, thereby improving access to opportunities for underserved workers.

Additionally, Labor-Management Forums provide an opportunity for managers, employees, and employees’ union representatives to discuss how Federal Government operations can promote satisfactory labor relations and improve the productivity and effectiveness of the Federal Government.  Labor-Management Forums, as complements to the existing collective bargaining process, allow managers and employees to collaborate in order to continue to deliver the highest quality goods and services to the American people.

It is the policy of my Administration to promote Registered Apprenticeships to meet employer needs while investing in workers’ skills; reducing employment barriers; and promoting job quality, equity, inclusion, and accessibility for the benefit of the Federal Government and the Nation.  Further, it is the policy of my Administration to establish cooperative and productive labor-management relations throughout the executive branch.

(See Full Executive Order)