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San Diego County adopts prevailing wage policy for projects on county land

Posted by National Alliance for Fair Contracting on

BY DEBORAH SULLIVAN BRENNAN
FEB. 17, 2022 5 AM PT

San Diego — Construction projects on county land must use skilled, trained workers and pay them prevailing wages, the Board of Supervisors decided in a split vote last week. Supervisors Jim Desmond and Joel Anderson, the two Republicans on the board, opposed the measure, while Democratic Supervisors Nathan Fletcher, Terra Lawson-Remer and Nora Vargas voted in favor.

Prevailing wages are set by the state to establish pay and benefits for public works projects based on compensation rates for similar work in the same area. The federal government and the state of California set prevailing wages on public projects under their jurisdiction, as do some local governments including the city of San Diego.

The county’s action, called the Working Families Ordinance, requires contractors for construction projects on county land to use skilled, trained workers and pay prevailing wages on projects over $1 million. It also requires employers on county-leased land to provide paid sick leave and to ensure worker protections against retaliation and discrimination.

(Read More)

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AG’s Office accuses Framingham companies of underpaying workers of public projects

Posted by National Alliance for Fair Contracting on

Zane Razzaq
MetroWest Daily News
Dec. 29, 2021

FRAMINGHAM — A Hollis Street construction company and its owners will be fined more than $540,000 over allegations they failed to pay prevailing wages to employees who worked on public projects at the Middleborough and Westport police stations, according to the Attorney General’s Office.

Superior Carpentry Inc. and its president, Fernando Barroso, and vice president, Felipe Drumond, were issued five citations by Attorney General Maura Healey’s office for failing to pay prevailing wages, not submitting accurate payroll records and falsifying records, according to a press release.

Another Framingham company, BPI Construction Management Inc. on 110 Mill St., also received a separate complaint from the office alleging it knowingly facilitated the submission of fraudulent payroll records.

BPI subcontracted the work to Superior Carpentry.

“These companies cheated workers out of the wages they earned while working on public construction projects and then repeatedly lied about it to the municipalities involved,” said Healey in a statement. “Contractors and constructions companies at every level, in every trade, are responsible for performing their work in accordance with the law. It is a priority of our office to ensure that workers are paid the wages owed to them.”

(Read More)

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New York Significantly Expands Application of Prevailing Wage Requirements

Posted by National Alliance for Fair Contracting on

December 27, 2021
Cole Schotz

On January 1, 2022, an expansion of prevailing wage law in New York will become effective. The new law will significantly increase the universe of construction projects subject to prevailing wage requirements.

In brief, when a project is subject to prevailing wage requirements, workers must be paid set hourly wage rates and hourly benefit amounts as determined by the fiscal officer of each New York county. These rates are substantially higher than minimum wage and also traditionally far greater than average non-union rates largely due to the added benefits amount.

Under the Budget Bill, S.7508-B A.9508-B, signed into law by former Governor Cuomo on April 3, 2020, workers must be paid prevailing wages on “covered projects,” which refer to “construction work done under contract which is paid for in whole or in part out of public funds where the amount of all such public funds, when aggregated, is at least thirty percent of the total construction project costs” and “where such project costs are over five million.”

Previously, projects were subject to prevailing wage requirements only if a public entity was a party to a construction project and the purpose of the work was to benefit the public.

The law broadens the definition of “public funds” from the traditional definition of direct public investment. “Paid for in whole or in part out of public funds” refers to money from the following sources:

  1. “The payment of money, by a public entity, or a third party acting on behalf of and for the benefit of a public entity, directly to or on behalf of the contractor, subcontractor, developer or owner that is not subject to repayment;”
  2. “The savings achieved from fees, rents, interest rates, or other loan costs, or insurance costs that are lower than market rate costs; savings from reduced taxes as a result of tax credits, tax abatements, tax exemptions or tax increment financing; savings from payments in lieu of taxes; and any other savings from reduced, waived, or forgiven costs that would have otherwise been at a higher or market rate but for the involvement of the public entity;”
  3. “Money loaned by the public entity that is to be repaid on a contingent basis; or”
  4. “Credits that are applied by the public entity against repayment of obligations to the public entity.”

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Gov. Whitmer to Reinstate Prevailing Wage for State Construction Projects

Posted by National Alliance for Fair Contracting on

FOR IMMEDIATE RELEASE
October 7, 2021
Contact: Press@Michigan.gov

Gov. Whitmer to Reinstate Prevailing Wage for State Construction Projects

State contractors and subcontractors required to pay prevailing wage, uplifting working people and ensuring Michigan has high-quality infrastructure

LANSING, Mich. - Today, Governor Gretchen Whitmer announced that the State of Michigan will require state contractors and subcontractors to pay prevailing wage for construction projects. The move reinstates the prevailing wage requirement, which was repealed in June 2018, and ensures that any construction worker working on a state construction project receives a fair wage. The governor is proud to lead by example at the state-level and deliver real change for working people in Michigan. 

“By reinstating prevailing wage, we are ensuring that working people get treated with dignity and respect, which starts with a fair wage,” said Governor Whitmer. “As governor, I am proud to stand shoulder to shoulder with working people and unions who built the middle class. By reinstating prevailing wage, we are ensuring working people can earn a decent standard of living, saving taxpayers money and time on crucial infrastructure projects, and offering Michigan a highly-trained workforce to rely on as we build up our roads and bridges, replace lead pipes, install high-speed internet, and more.” 

“We applaud Governor Whitmer’s decision to restore prevailing wage requirements on state projects.” said Tom Lutz, Executive Secretary-Treasurer of the Michigan Regional Council of Carpenters and Millwrights. “This decision protects Michigan’s investments in infrastructure because when prevailing wages are the expectation, contractors have to compete on a level playing field based on quality of their skilled work, not on the exploitation of their workers.” 

“The actions that have been taken today, help to restore confidence by workers and employers alike,” said Steve Claywell, President of the Michigan Building and Construction Trades Council. “The restoring of prevailing wage provides a fair and equal bidding process allowing for highly trained men and women to be paid a good wage. We appreciate the courage of this Governor and stand ready to build Michigan with her.” 

History of Prevailing Wage

Michigan’s prevailing wage was repealed by the Michigan legislature in June 2018. A total of 24 states have repealed their prevailing wage laws. Michigan’s repeal eliminated the state’s prevailing wage requirement, but left the door open for DTMB to require prevailing wage under its authority to develop the terms of state contracts. Governor Whitmer is proud to make that call and reinstate prevailing wage.

Today’s action rewards hard work and ensures working people can earn a decent standard of living, take care of their families, and have a secure retirement. By reinstating prevailing wage, Michigan can continue making progress on critical infrastructure, including roads, bridges, water infrastructure, high-speed internet, and more.

Budget

Last week, the governor signed the Fiscal Year 2022 budget bill that delivers on the kitchen-table fundamental issues that matter most to working families. The budget puts 167,000 Michiganders on a tuition-free path to higher-education or skills training through the Michigan Reconnect and Futures for Frontliners programs, expands low or no-cost childcare to 105,000 kids, repairs or replaces 100 bridges while creating 2,500 jobs, and more. …

(See Press Release)

Two Florida companies underpaid workers $175,000. Now, one can’t bid on federal contracts (FL)

Posted by National Alliance for Fair Contracting on

BY DAVID J. NEAL
MARCH 05, 2020 06:54 AM

Two Florida electrical contractors paid $175,413 in back wages and fringe benefits to workers after they violated numerous federal guidelines while working on a West Palm Beach apartment building.

The Department of Labor said Monday the back compensation went to 46 workers or $3,813.32 per worker of Tampa’s Southern Integrated Systems and subcontractor West Palm Beach’s J & Brothers Electrical Corp. This all happened while working on Royal Palm Place in West Palm Beach.

Also, Southern is debarred or banned from bidding on federal contracts for three years.

The company run by manager Jason Dinger, according to state of Florida records, didn’t pay electricians overtime when they earned it, Labor said.

On top of that, Southern “submitted falsified certified payroll records that failed to report accurately all the hours employees worked on the project. Although the employees worked overtime every workweek, the certified payroll did not reflect those hours.”

J & Brothers, run by Juan Vincente Escalante, also tried some shucking and jiving with payroll records. Labor’s Wage and Hour Division investigators saw records that said overtime hours had been paid properly, “despite the employer’s admission that they paid their workers at straight-time rates for all the hours that they worked.”

When some workers spent part of the day or week on other projects, J & Brothers didn’t keep a proper record when they were working on the Royal Palm, a federal project – thus requiring paying the area’s prevailing wages and fringe benefits – and when they were on another project. There was no way for J & Brothers to pay employees accurately.

The “prevailing wages” requirement comes from Davis Bacon and Related Acts. Paying straight time for all hours worked, when there should’ve been overtime violates the Fair Labor Standards Act and the Contract Work Hours and Safety Standards Act (CWHSSA).

(Read More)

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Shortchanging Workers in Concord Won’t Pencil Out (CA)

Posted by National Alliance for Fair Contracting on

Why prevailing wage standards are good for workers – and even good for developers.

By Matthew Miller
MARCH 04, 2020

The development and re-use project at the former Concord Naval Weapons Station has now been nearly 15 years in the making. With plans for 13,000 housing units, a college, and more than 8 million square feet of commercial space, the Naval Weapons Station could be a regional economic engine for decades.

In winning the Concord City Council’s selection as master developer for the project, the Florida-based developer Lennar made a number of commitments to the community, and has entered into discussions with the city and relevant labor stakeholders regarding the best ways to honor them. Among them, an agreement that would cover things like the hiring of local construction workers and paying the local market prevailing wage.

Recently however, reporting indicates that Lennar may not sign onto an agreement that does right by the skilled workers by paying them prevailing wages, because it claims that doing so does not pencil out. Before any hasty decisions are made, it is important to dispel such myths.

Prevailing wage is the local market wage floor for specific types of skilled construction work. It includes not just wages, but investments in apprenticeship training that ensure communities can meet their long-term construction labor force needs. Both the federal government and 25 states, including California, have laws that prescribe these standards for schools, roads, and other types of public construction to ensure taxpayer-funded projects are done right the first time.

Over the years, armies of economists have studied whether prevailing-wage standards make construction projects more expensive. The overwhelming consensus of peer-reviewed studies is that they do not. The reason why is because construction labor constitutes less than a quarter of total project expenditures on average. In other words, it is simply not what drives costs. And research also shows that projects paying prevailing wage consistently offset higher wages with higher levels of productivity and less spending on materials, equipment, and other purchased services.

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STUDY: Should Prevailing Wages Prevail? Reexamining the Effect of Prevailing Wage Laws on Affordable Housing Construction Costs

Posted by National Alliance for Fair Contracting on

Matt Hinkel, Michigan State University, Dale Belman, Ph.D., Michigan State University (ICERES, Institute for Construction Economic Research)

A current policy debate surrounding state prevailing wage laws is centered on whether they are costly to state governments and taxpayers. The authors contribute to this debate by extending and utilizing data from a 2017 prevailing wage study to replicate and investigate a controversial paper often cited in this debate. The authors examine the relationship between California’s prevailing wage law and the costs of building affordable housing, and they do so by going beyond the 2017 study’s estimates and estimating a carefully-constructed two-stage model. The authors find no causal effect of prevailing wages on affordable housing construction costs, contradicting previous literature. Further, in a supplemental analysis, the authors examine and highlight key methodological deficiencies present in a prior study. This timely research is designed to contribute to the current prevailing wage debate, which has important implications for researchers, practitioners, and legislators.

(PDF Copy of Full Study)

(Visit the ICERES Website)

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STUDY: Prevailing Wage Laws Boost Homeownership for Construction Workers

Posted by National Alliance for Fair Contracting on

February 19, 2020
By: Frank Manzo IV, Jill Gagstad, Robert Bruno, Ph.D.

Prevailing Wage and the American Dream: Impacts on Homeownership, Housing Wealth, and Property Tax Revenues

This study examines links between prevailing wage laws and homeownership, housing wealth, and property tax revenues for … workers and their communities. …

State prevailing wage laws promote the hiring, development, and retention of skilled workers by encouraging investment in apprenticeship programs. Prevailing wage rates often include a cents-perhour-worked contribution into workforce training institutions. As a result, apprenticeship training is 6 to 8 percent higher in states with prevailing wage laws, boosting worksite productivity by an average of at least 11 percent (Bilginsoy, 2003; Duncan & Lantsberg, 2015). Since state prevailing wage laws enhance productivity and labor costs are a small percentage of total costs in construction, the preponderance of the peer-reviewed research has concluded that state prevailing wage laws have no impact on total project costs (Duncan & Ormiston, 2017).

…despite a robust economic literature on apprenticeship training, safety, worker earnings, and costs, little research has been conducted showing the effect of state prevailing wage laws on construction worker homeownership.

This report, conducted jointly by the Illinois Economic Policy Institute (ILEPI) and Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign, fills that void in the economic research, assessing the impact of state prevailing wage laws on the homeownership rate of skilled construction workers. The impact of state prevailing wage laws on the home values of blue-collar construction workers is also analyzed, determining whether the policy allows construction workers to build household wealth and positively contribute to their communities through property tax revenues.

(PDF Copy of Full Report)

(Visit the ILEPI Website)

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City officials: Getting tax breaks on your project? Pay prevailing wage (MO)

Posted by National Alliance for Fair Contracting on

February 07, 2020

ST. LOUIS (KMOX) — St. Louis Mayor Lyda Krewson has signed an ordinance guaranteeing a prevailing wage for workers on all projects in that receive City of St. Louis incentives.

Krewson says the idea is to avoid developers who get tax breaks and then try to hire workers on the cheap.

“We want to make sure if the city is investing in a project, that the workers are treated fairly and the contractors are treated fairly,” Krewson told KMOX. …

“This is very important to our construction workers on city tax incentivized projects — they’ll be getting a fair wage and benefits on any of these projects,” said Alderwoman Sarah Martin, who sponsored the ordinance.

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Construction firms owe $1.1 million in back pay (IL)

Posted by National Alliance for Fair Contracting on

State decision on prevailing wage follows complaint by carpenters council.

By David Roeder
Feb 24, 2020

The Chicago Regional Council of Carpenters said Monday the developer and subcontractors that built a senior living center in Northbrook have been ordered to pay $1.1 million to employees for violating state law on prevailing wages and benefits.

The Illinois Department of Labor, responding to charges the council filed, ordered the back pay for employees who constructed the Lodge of Northbrook, a 164-unit facility at 2150 Founders Drive, Northbrook. The project benefited from bonds issued by the Illinois Finance Authority, making it subject to the state’s Prevailing Wage Act. …

Executive Secretary-Treasurer Gary Perinar of the carpenters council said the back pay award is the largest in its history. He said many workers will receive thousands of dollars paid out over a year.

“We have a new department dedicated to combating wage theft and are putting unscrupulous contractors on notice that cheating workers and taxpayers will not be tolerated,” he said. The council is a part owner of Sun-Times Media. …

“Wage theft and the loss of tax revenue affects everyone,” Perinar said. “It takes advantage of workers, many of whom are unaware of their right to receive fair wages and benefits for themselves and their families. It puts signatory union contractors at a disadvantage for competitively bid projects. And it cheats communities out of tax dollars to increase future growth, new projects and public services. Thanks to our research team for discovering this injustice and to the Department of Labor for enforcing the law.”

(Read More)