Employers short Iowa workers $900 million annually, report says

Posted by National Alliance for Fair Contracting on

Erin Murphy | The Gazette
Nov. 25, 2022

Iowa Workforce Development says it works hard to ensure employees are paid fairly

DES MOINES — Iowa workers are not paid an estimated $900 million owed to them annually, affecting one in seven workers in the state, and state oversight agencies are doing little to enforce violations, according to a report from a liberal-leaning issue advocacy group.

The report is from Common Good Iowa, which describes itself as a nonpartisan, not-for-profit organization. The group is staffed by policy advocates and researchers, and advocates for “people-centered policy solutions for our state’s most pressing issues.”

According to the report, 250,000 Iowa workers are not paid $900 million owed to them annually:

  • $501 million in overtime violations
  • $241 million in minimum wage violations
  • $163 million in other violations, including the forced sharing of tips, forcing people to work off the clock, making illegal deductions from paychecks or mis-classifying employees as contractors.

The report was written for Common Good Iowa by Sean Finn, whose focus for the group is on labor standards and practices.

Finn analyzed data from the federal Bureau of Labor Statistics and Iowa Workforce Development, and U.S. Department of Labor enforcement records.

“This insidious and growing problem costs Iowans 10 times more than all other forms of theft combined,” Finn said in a news release.

According to the report, in addition to those unpaid wages, state and federal government agencies are doing little to punish businesses for any violations. For every $1,000 in wage theft, only $2 is recovered by government agencies — less than 1 percent — the report says.

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Reject road swap program (IA)

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Quad-City Times Editorial Board
May 26, 2019

On Tuesday, members of the Bi-State Regional Commission’s Transportation Policy Committee are scheduled to decide whether to take part in the federal aid swap program authorized by the Iowa Legislature in 2017.

For months, labor unions and local contractors have been lobbying against the program, which state officials say is a way to deliver projects faster and at less expense. The state says it has the experience managing projects that come with the overhead and regulations that are part and parcel of federal-aid projects.

Unions say this would be a way to avoid federal prevailing wage requirements, and that it will lead to lower-cost, out-of-area contractors winning jobs that previously had gone to local companies. They also say the swap will bypass federal requirements to buy American products and ensure some contracts go to minority- and women-owned businesses.

The swap program basically works like this: The state would give local governments state dollars in exchange for their federal dollars for road and bridge projects. According to the Bi-State Regional Commission, about $15 million dollars in swap-eligible funds are in its four-year Transportation Improvement Program.

Iowa’s Department of Transportation says this concept is not unique. Other states in the Midwest are doing it. And on these pages last week, Mark Lowe, the DOT director, wrote that the same amount of federal money, with all the attendant federal requirements, will be spent in this area – it will just be administered by the state DOT rather than local authorities.

Our concern is the impact this will have on local contractors. Consider Michelle DeCap, chief financial officer of Phoenix Corporation, of Rapids City, Ill. This Quad-City company has done projects on both sides of the river for years. DeCap told us that, even though the same amount of federal money might be spent locally, she believes the funds will be rolled into larger state jobs and there will be a smaller number of projects for her firm to bid on – meaning fewer opportunities for Phoenix, a certified woman-owned business, to win local projects.

A number of area organizations, many of them labor unions, have opposed this move. But so has the Quad-Cities Chamber of Commerce. The chamber worried that participating in the swap program “may allow for more businesses from outside the Quad-Cities region that don’t follow [federal wage and discrimination] guidelines to garner work, which would have a direct negative impact on our region.”

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Iowa MPOs Should Opt-Out of “Federal-Aid SWAP” Program (IA)

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PUBLISHED NOV 27, 2018 AT 3:38 PM

In 2017, the Iowa General Assembly passed legislation that authorized the Iowa Department of Transportation to create a “Federal-Aid SWAP” program (Iowa DOT, 2018). This legislation essentially eliminated federal requirements on public infrastructure projects, including the historically bipartisan Federal Davis-Bacon Act which creates a level playing field for all federal construction contractors by ensuring that public expenditures maintain and reflect local area standards for wages and benefits. Under Iowa’s “Federal-Aid SWAP” program, federal dollars that were designated for local construction projects are now retained through the state and fail to include Davis-Bacon Act standards. Local metro planning organizations in Iowa should opt-out of participating in the program.

The main purpose of the Davis-Bacon Act is to support middle-class American families by protecting local standards for compensation and craftsmanship in the competitive public bidding process. Federal construction bidding is not like the private sector. Government procurement agents are required to select the lowest bidder. In the low-bid model used on federally-funded construction projects, contractors aim to lower their bid however possible, including by lowering wages and by reducing apprenticeship training. The Davis-Bacon Act levels the playing field, allowing local contractors and local workers a fair shot at these government projects and incentivizing competition based on core competencies in construction (Duncan et al., 2017).

The Davis-Bacon Act boosts local economies and provides great value to taxpayers. The Davis-Bacon Act protects work for local contractors and construction workers, supports training programs, and provides pathways into the middle class for all blue-collar workers– keeping them off government assistance programs. Local metro planning organizations in Iowa should opt-out of participating in the “Federal-Aid SWAP” program and instead choose to maintain Davis-Bacon Act standards on taxpayer-funded construction projects.

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Iowa Senate OKs bills on minimum wage, wage theft

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POSTED: TUESDAY, FEBRUARY 24, 2015 5:13 PM | UPDATED: 5:13 PM, TUE FEB 24, 2015.

 

 

DES MOINES (AP) – The Iowa Senate voted Tuesday to raise the state’s minimum wage and try to curtail cases of wage theft.

By a 27-22 vote, the Senate approved increasing the minimum wage level to $8.75.

Sen. Tony Bisignano, D-Des Moines, said a minimum wage increase would help Iowa’s workforce.

“We are trying to build a high wage, high skill economy. We don’t want to become a regional haven for low wage employers,” he said in prepared remarks.

Senators also voted 26-23 to establish more rules to avoid alleged wage theft by employers.

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Iowa [Legislators] say wage theft bill would curtail fraud

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Posted: Wednesday, January 28, 2015 7:57 am

DES MOINES (AP) – A bill introduced in the Senate would curtail wage theft in Iowa by requiring businesses to be more direct with workers about employment terms, Democrats said Tuesday.

Sen. Bill Dotzler, a Democrat from Waterloo, is co-sponsor of a measure that would require employers to share a written record of employment terms with an employee at the start of a job. Such an agreement would help the worker if there’s suspicion of wage theft in the future and the worker needs to file a formal complaint, Dotzler said.

“This legislation is common sense,” Dotzler said.

The bill would also define penalty terms and expand protection for whistleblowers. It’s identical to a bill that was introduced last session, according to Dotzler. That bill didn’t get very far, but he said he is hopeful a new legislature would seriously consider the latest measure.

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State Suspends Concrete Contractor After Price-Fixing Plea

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A concrete contractor convicted of fixing prices for ready-mix concrete in Iowa can no longer receive contracts from the Minnesota Department of Transportation.
This month’s MnDOT suspension order for GCC Alliance Concrete grew out of a federal probe that revealed four concrete makers in Iowa conspired for three years to fix prices and rig bids for contracts. The investigation sent at least two executives to prison, including former GCC sales manager, Steven VandeBrake, who is close to finishing a 48-month sentence.

Under state law, Minnesota has to cut ties with contractors convicted of crimes. The company itself was charged criminally (yes, that can happen) and pleaded guilty in 2011 to violating anti-trust laws. Its punishment: 18 months probation, as well as $100,000 in free concrete for the paving and masonry needs of local non-profit organizations.

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