Thoughts on labor, unions and prevailing wages (OR)

Posted by National Alliance for Fair Contracting on

I’ve come to my support of labor, unions and prevailing wages in several ways.

Theresa Kohlhoff
Thursday, August 29, 2019

Labor Day signals the end of summer, kids going back to school, my birthday, late season harvests and barbecues. This Labor Day, given the PERS vote in the legislature and the LO council goal to advocate against our state prevailing wage law, as the sole dissenter on the council to this “goal,” I wanted to also make some observations about the significance of the holiday itself.

Oregon’s prevailing wage law, “Little” Davis-Bacon Act, is modeled after the federal law. The statutory purposes are progressive: “To ensure that contractors compete on the ability to perform work competently and efficiently while maintaining community-established compensation standards; to recognize that local participation in publicly financed construction and family wage income and benefits are essential to the protection of community standards; to encourage training and education of workers to industry skills standards and to encourage employers to use funds allocated for employee fringe benefits for the actual purchase of those benefits.”

If a public works project – e.g. schools, roads, pipelines and other public facilities – is going to cost over $50,000, LO must pay prevailing wages. These wages are generally, but not precisely, the rate that union workers get paid in a particular geographical area and are set by the Bureau of Labor and Industries. So for example, the prevailing rates for a public contract in the Portland metropolitan area will generally be higher than, say, in Eastern Oregon.

On the other far end, non-union, non-prevailing wage construction workers may be paid at a cheaper rate, and with or without benefits. Touted as choice and freedom for the worker, it is touted as fiscal responsibility: Paying the differential between the two rates – prevailing and non-prevailing – is denounced as a waste of tax payer money.

I disagree.

If one only focuses on the cost of prevailing wage labor in public contracting versus cheaper non-prevailing wage labor, the economic analysis completely overlooks equal or greater cost savings and the major benefits derived from prevailing wage – to the public entity, to the worker and to the community. Note: I am not advocating for public projects that are beyond our means, or for disregarding prudent budgeting. Raw cost to taxpayers obviously matters. It’s just that true costs have to include far more economic and community factors than just the one criteria: cheapest contract bid. One only has to look at the dismal prospects of our youth as the dark cloud of income inequality and the gig economy reveals who is benefitted by the squeeze and who is gasping from being squeezed.

I’ve come to my support of labor, unions and prevailing wages in several ways. For one, I’ve had practical experience as a lawyer representing a private contractor doing major projects in five states.

He preferred to use union labor and continues to support a strong union.

He got better ratings and therefore cheaper insurance. He was rewarded with an enhanced reputation, even in a fast moving environment, for getting jobs done well and on time. Nothing in this world is perfect but to this business owner the extra labor cost was really minimal when the issue was considered as a whole.

Research confirms and expands these observations. For example, see www.smartcitiesprevail.org/benefits-prevailing-wage/. A union construction worker earns as much as 17% more, lowering the poverty rate by 30%; worksite injuries and fatalities are reduced by as much as 18%; apprenticeships for veterans and POC are expanded by 40%; unfair competition from employers cutting corners on safety/quality is reduced; job productivity is improved by as much as 20%; up to $367 million is saved on food stamps and tax credits. Every $1 of prevailing wage produces $1.50 for the economy! Is this not the way to opportunity? Is this not the way to have confidence and NOT scare ourselves into recessions? The way to build/rebuild a vibrant, resilient, capable middle class that benefits and supports the entire community? I certainly think so.

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Winchester construction company failed to pay workers minimum wage (MA)

Posted by National Alliance for Fair Contracting on

Posted Aug 1, 2018 at 5:46 PM

A Winchester construction company J. Donlon and Sons Inc. has paid more than $121,000 in wages and penalties for violating the Massachusetts prevailing and minimum wage laws by failing to properly pay workers on a Medford public works project, Massachusetts Attorney General Maura Healey announced today. The company is located at 86 Cross St. in Winchester.

“This company and its owners gained an unfair advantage by cheating their workers out of the wages they earned,” said Attorney General Healey in a press release announcing the settlement. “With this settlement, we are sending a message that there are serious consequences to breaking our laws.”

J. Donlon and Sons Inc.’s owner Joseph M. Donlon Sr., and his two sons Joseph M. Donlon Jr. and Sean Donlon, were cited for intentionally failing to pay prevailing wage, failing to submit true and accurate certified payroll records, failing to pay the state minimum wage and failing to maintain true and accurate general payroll records from January 2012 through December 2016, according to the release. As part of the settlement, the company and all three corporate officers are prohibited from bidding or working on any public works construction project in Massachusetts for 10 years.

The attorney general’s Fair Labor Division began investigating J. Donlon and Sons after a former employee submitted a complaint alleging he was not paid the proper prevailing wage rate for work performed on a city of Medford utility trench patching public works project. According to the release, the attorney general’s office determined that employees on the project were paid far less than the established prevailing wage rate. During one three-year period, for example, employees were paid an hourly rate of between $8 and $20 when they should have been paid between $51.35 and $54.10 per hour.

The company also submitted certified payroll records to the city of Medford during certain years that listed only members of the Donlon family as having worked on the project and omitted other employees, the attorney general’s office stated. The investigation found that general payroll records were also inaccurate, and two employees were paid less than the applicable minimum wage.

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Democratic leaders: Prevailing wage is good for Delaware (DE)

Posted by National Alliance for Fair Contracting on

Senators David McBride, Margaret Rose Henry and Nicole Poore
Published 2:07 p.m. ET July 21, 2017
Updated 2:33 p.m. ET July 21, 2017

The 2017 budget debate is behind us, and plenty of page space in this publication and others has been committed to its finer details. We’re perplexed, though, by how much of the Republican dialogue continues to be dominated by an issue completely peripheral to the budget: the prevailing wage paid to blue-collar workers on public works projects.

Partisan misinformation has clouded the truth surrounding both the budget and the prevailing wage. We believe that the public deserves a discussion that cuts through political spin and cocktail napkin math and offers a straightforward inventory of the facts.

Prevailing wage laws ensure fairness in government contracts by basing laborers’ total compensation on a survey of similar workers in their area, just as anyone would expect wages commensurate with their skills, occupation, and cost of living.

You may have heard some of the following myths:

Myth: The prevailing wage is a budget issue that affects the $354 million deficit closed by the General Assembly earlier this month.

Fact: Public works projects are funded almost entirely by the capital budget, or “bond bill,” a completely separate balance sheet. Our operating deficit was caused by a unique combination of factors: growing public school enrollment, special education costs, national health care prices, and a tax portfolio that works more like a scratch-off ticket than a speedometer for our economy. Our colleagues across the aisle who sit on the budget-writing Joint Finance Committee are perfectly aware of that fact.

Myth: Reducing or repealing the prevailing wage would lower public construction costs by as much as 24 percent.

Fact: Multiple studies and real-world examples show that this is simply untrue. States that slash public works wages rarely realize the cost savings that are promised in campaign years, while middle class wages tumble and the economy suffers. That actually does hurt the state’s bottom line.

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AG: Company failed to pay correct wages at Bresnahan, other public works jobs

Posted by National Alliance for Fair Contracting on

Bresnahan School one of public works projects involved

Staff Reports
July 13, 2017

NEWBURYPORT – A New Hampshire construction company was fined more than $160,000 in restitution and penalties for failing to properly pay employees on nine public works projects, including Bresnahan Elementary School, the attorney general said Wednesday.

Attorney General Maura Healey’s office issued three citations against Northeast Partition Specialties Inc. and owner Fredrick Breth for their failure to pay the prevailing wage, pay overtime and submit accurate certified payroll records for the projects done in 2014-15.

“Companies that do business in Massachusetts must play by the rules,” Healey said. “Prevailing wage laws are intended to ensure a level playing field for companies and provide a real, living wage to workers.”

Northeast is a small, privately held corporation in Manchester, New Hampshire.
The Attorney General’s Office began an investigation of the company after the Fair Labor Division received a complaint from a former employee claiming he was not paid the prevailing wage rate for two public works projects between April 2015 and September 2015.

The investigation found that Northeast failed to pay the proper prevailing wage rate to 27 employees for these public works projects: Staff Sergeant James J. Hill School, Revere; Bresnahan Elementary School, Newburyport; the Acushnet police facility; the Chelmsford Fire Department; Dracut Town Hall; the Sudbury Police Department; Park Avenue Elementary, Webster; West Bridgewater Middle-Senior High School; and the Westborough Fire Department.

…

Under the Massachusetts Prevailing Wage Law, contractors and subcontractors working on public projects must pay their employees a special minimum wage, which is based on the occupational classification for the type of work the employees perform.

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Prevailing Wage Violation Leads to $255,000 Settlement With Attorney General

Posted by National Alliance for Fair Contracting on

02/13/2017
By: Jonathon Sizemore

A contractor and a developer are to pay $255,000 for violating the New York False Claims Act and not paying workers a prevailing wage. On February 9, 2017, New York Attorney General Eric T. Schneiderman announced a settlement agreement with a New York City-based general contractor and a developer for failing to pay a prevailing wage to workers at their public works project.

The contractor, A. Aleem Construction Inc., and the developer, West 131st Street Development Corp., were both participants in the Neighborhood Entrepreneurs Program of the Department of Housing Preservations and Development. The program was intended to enable neighborhood-based private property managers to own and manage clusters of occupied and vacant city-owned buildings. Buildings selected for the program are sold to the Neighborhood Partnership Housing Development Fund Corporation and then leased to the participants. The participants then oversee the rehabilitation and design of the buildings with general contractors. The program is partially funded with federal money.

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Lawmakers put prevailing wage in crosshairs; laborers object (MO)

Posted by National Alliance for Fair Contracting on

Sunday, February 12, 2017
By Mark Bliss ~ Southeast Missourian

 

Missouri’s prevailing wage law may not prevail much longer.

The Republican-dominated Legislature has set its sights on repealing or revising the state law.

…

A pocketbook issue

Rick McGuire, business manager for Laborers Union Local 1140 in Cape Girardeau, said repealing the prevailing-wage law would leave workers with less income.
“We have members who make a living doing prevailing-wage construction work,” he said.
In the construction trades, “you don’t work every day,” he said.

McGuire said labor unions provide skills training for their members and health insurance. A portion of the hourly wages for a union worker goes to fund training, health insurance and a pension, he said.

The prevailing wage benefits union and nonunion workers, as both are paid the same rate on a public-works project, he said.

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Employees’ Actions Lead To Contractor’s Conviction And Level The Playing Field

Posted by National Alliance for Fair Contracting on

February 11, 2015

SACRAMENTO, Calif., 

 

Feb. 11, 2015/PRNewswire/ — Licensed electrical contractor  Calvin Harris, of Harris Electric, was convicted of eight felony counts on February 9 for not paying employees prevailing wages and falsifying documents to conceal his actions. The investigation was conducted jointly by the Alameda County District Attorney’s Office, the California Department of Industrial Relations and the California Department of Insurance. According to Alameda County District Attorney Nancy E. O’Malley’s press release, two of Harris Electric’s employees reported being victims of the wage theft on three public works’ projects – Alameda County General Services Agency (Santa Rita Jail Solar Project), the Port of Oakland and the City of Fremont – which led to the investigation of Harris.  According to the press release, “A comparison of Harris’ payroll records for the Alameda County projects revealed employee wage theft violations of $359,347.89,” which impacted 11 employees.