Report: Worker-misclassification fight nets $1.4M

Posted by National Alliance for Fair Contracting on

By: Erika Strebel
March 16, 2018 1:25 pm

In 2017 alone, Wisconsin’s work to crack down on employers who misclassify workers as independent contractors instead of direct employees has netted nearly $1.4 million.

Because of seasonal layoffs that can muddy the distinction between permanent employees and someone hired for a specific job, worker misclassification is believed to be rampant in the construction industry.

Industry officials have said deliberate misclassification not only deprives the state of taxes and other resources but also gives dishonest companies an unfair advantage by letting them avoid costs that their more honest rivals roll into bid prices.

In 2017, the DWD continued its crackdown on misclassified workers, identifying 6,230 of them and collecting $1.4 million dollars that went back into the state’s unemployment-benefits system, according to a report released by the state Department of Workforce Development. The department also reported conducting 500 field investigations into worker misclassification.

About this same time last year, state officials had reported recovering nearly $1.13 million over the course of more than three years. The state started ramping up its enforcement of worker-misclassification laws in May 2013.

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Sen. Wirch’s bill takes aim at ‘wage theft’ (WI)

Posted by National Alliance for Fair Contracting on

RICARDO TORRES
Tuesday, October 26, 2017

MADISON – Whether it’s not being paid for overtime, forcing employees to work off the clock or violating minimum wage laws, wage theft is an issue for employees across the country and some new legislation in Madison is looking to reduce the problem.

State Sen. Bob Wirch, D-Somers, testified at a public hearing on Thursday in support of Senate Bill 371, which he hopes will have a positive impact for workers, if passed.

“The changes I am proposing are reasonable solutions that will address some of the legal loopholes that have allowed this practice to grow, level the playing field for the many business owners who play within the rules and take care of their employees,” Wirch said.

The proposed law would penalize employers who violate their workers rights starting with a $500 fine for the first violation, $750 for the second violation and $1,000 for every violation after that.

Wirch said he’s hoping to have bipartisan support for the bill and that it will be voted on before the end of the session

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Fair Wage? What repeal of the prevailing wage could mean for the construction trades (WI)

Posted by National Alliance for Fair Contracting on

TABLE OF EXPERTS
Aug 29, 2017

The Wisconsin Legislature is considering a full repeal of the prevailing wage statute, which sets construction wages for public projects. Proponents say it will save taxpayers money, but will it? And what are the potential negative impacts of a repeal? The Milwaukee Business Journal recently assembled a panel of experts representing the building trades to explore the issue.

STEVE BROAS (MODERATOR): THERE HAS BEEN A LOT OF DISCUSSION ABOUT THE PREVAILING WAGE. WHAT EXACTLY IS IT, AND WHY WAS IT STARTED?

DAN BUKIEWICZ: That’s a great way to start this conversation, because you really have to go back to the beginning to understand what prevailing wage is all about. It started during the Great Depression. Communities were seeing a lot of transient workers coming into their communities to do work, and they wanted to protect their own local economy and workers. So, prevailing wage was started first and foremost to protect local workers. It established a rate at what it cost to do business and live in that area.

DALE POWELEIT: It started in New York originally. An Alabama company came up and starting undercutting local contractors on construction projects. The people in the community said that was not fair to the area workers, and they decided to go to the federal government, which passed the Davis Bacon Act in 1931. Wisconsin passed its law three or four years after that and other states followed suit.

JEFF MEHRHOFF: The Wisconsin legislation was modeled after the Davis Bacon Act and sets standard local wages. It is not a statewide standard. It is based on the average of construction wages in that area. Milwaukee’s standard wage is different than Madison and different than Appleton.

MODERATOR: HOW DOES IT IMPACT PUBLIC AND PRIVATE PROJECTS?

BUKIEWICZ: Usually, prevailing wage applies only if tax dollars are attached. In Wisconsin, it includes state projects and projects for the University of Wisconsin system. It does not apply to private projects, but there are responsible contractors who pay prevailing wages on private projects, because they want to do the right thing. But that is strictly their call.

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Leroy Miller: Repealing prevailing wage will hurt vets (WI)

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Leroy Miller
7/19/17

I love my country. I’ve fought for my country. My brothers and sisters have died for this country. I want to continue to serve my country.

I am a heavy-equipment operator, happily and dutifully building new infrastructure for Wisconsin communities.

My concern is, and has been, what state legislators are proposing in a full repeal of the state’s longstanding prevailing wage law. This is the law that protects Wisconsin workers from low-wage-paying, out-of-state contractors who will be free to pay their workers substandard wages in the interest of undercutting Wisconsin contractors and effectively stealing jobs here. And guess what? It’s working.

Last legislative session our elected leaders in Madison partially repealed prevailing wage for municipal-funded projects, which went into effect this January. Since then, a state review of projects to-date found there has been a more than 53 percent increase in out-of-state contractors securing Wisconsin work. Those are Wisconsin jobs being lost, Wisconsin tax dollars leaving the state and hard-working Wisconsin families being hurt. You don’t have to be a political wonk to understand how and who this hurts – Wisconsin workers.

Why as a proud veteran am I involved? Many of us veterans are drawn especially to two lines of work after our service – law enforcement and construction. I’ve chosen construction because I want to continue to serve my country in a meaningful way but lacked the necessary skills to make the transition. Thanks to many of the construction trades in Wisconsin they have specifically designed apprenticeship programs for veterans to provide them the necessary training and skills to transition into the construction industry.

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Report: Republicans Did Not Consider Social Costs of Prevailing Wage Law Repeal

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By Jim Lundstrom, Peninsula Pulse
June 30th, 2017

Republican lawmakers have set their sights on repealing the state’s prevailing wage law for public projects as a way to save taxpayer money on infrastructure costs, but opponents say it is an attack on the middle-class, blue-collar worker.

The bill would end all prevailing wage laws for state-funded construction projects, and Senate sponsor Leah Vukmir (R-Brookfield) claims it will save taxpayers hundreds of millions of dollars. Yet the nonpartisan Legislative Fiscal Bureau recently reported “existing research on the impact of prevailing wage laws on construction costs is mixed and inconclusive.”

A report released June 19 by the Midwest Economic Policy Institute say advocates for repeal have not considered the social costs of such a move.

“The worst-case potential social costs of repealing prevailing wage range from $224 million to $337 million every year,” the report states. “When worker wages are cut, they contribute less in state and federal income taxes. At the same time, more workers qualify for and rely on government assistance. This results in less money in the state economy and less money in the pockets of hardworking citizens.”

The report goes on to say “between four and 12 percent of construction workers in Wisconsin would newly qualify for government assistance if prevailing wage were repealed, depending on the severity of the wage cut. This is in addition to the 14.5 percent who already qualify for government assistance in the state.”

…

In April, Gumieny and others in the construction business attended the 3rd Annual Construction Workers’ Memorial Service in Madison to recognize individuals who lost their lives in construction accidents in the state. As the memorial procession walked from Monona Terrace to St. Patrick’s Church for a memorial service, Gumieny said they passed four infrastructure construction projects near the state Capitol, and three of those were being done by out-of-state outfits.

“Since January of this year, we’ve lost 53 percent of that work that used to be here for Wisconsinites,” Gumieny said. “The study was from January through last month. Fifty-three percent of that work went to out-of-state contractors. It will not benefit anybody for that loss of work here for Wisconsinites in the construction industry. For what this legislation is doing, it’s unfair to the people of Wisconsin. The only time you see fair government is when you put them in gridlock and have equal Republican to Democrats. At that point the only thing that really comes out are things that are truly good for the people.”

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Frank Manzo IV: Lawmakers should consider the social cost of construction wage cuts

Posted by National Alliance for Fair Contracting on

June 28, 2017
Frank Manzo IV | Policy Director
Midwest Economic Policy Institute

According to the conservative Wisconsin Taxpayers Alliance (WTA), state legislators and Gov. Scott Walker may soon act to cut the wages of private construction workers by as much as 44 percent.

How? By repealing Wisconsin’s prevailing wage law – the minimum wage standard on state-funded construction projects such as highways, bridges, and other critical infrastructure.

What they haven’t told you is that their own numbers suggestthat this could actually cost taxpayers more than $300 million per year. This is the social cost of wage cuts that would remove thousands of Wisconsin’s working families from the middle class.
The math is really quite simple.

According to the Bureau of Labor Statistics data on which WTA’s analysis relies, the skilled construction workers who would be affected by prevailing wage repeal earn an average of $51,000 per year. The 44 percent savings scenario that WTA and their allies in the Legislature and Walker administration have promised would require that average wage to drop to about $29,000 per year.

When you add up all of the health-care, home-heating, and food subsidies for which these workers and their families would then qualify, as well as low-income tax credits and the lost income tax revenue that the state would have to find from other taxpayers, the total cost of Wisconsin’s wage cut exceeds $300 million annually.

How can any legislator – especially those who campaigned on promises of lifting wages and fiscal responsibility – defend such a position?

The short answer is by ignoring basic math, the fundamental realities of the construction industry and the economy, or both.

Construction is dangerous work. When it comes to the things the public relies on – schools, roads, transit systems and water facilities – having well-trained professionals on the job matters. By establishing criteria that reflect local market standards and incentivize contractors to invest in workforce training, research shows that prevailing wage laws dramatically increase local hiring, productivity, efficiency and safety on the worksite. In doing so, they simultaneously reduce waste, and reduce spending on fuels, materials, equipment and purchased services.

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Prevailing wage repeal will hurt taxpayers, workers

Posted by National Alliance for Fair Contracting on

Beth Meyers represents the 74th Assembly District of Wisconsin

Jun 26, 2017

MADISON- The citizens of Wisconsin have seen their fair share of legislative proposals this year that could dramatically change the status quo for our state. From changes to how the Wisconsin Department of Natural Resources addresses high capacity wells to new limits on campus free speech, there are always controversial issues being brought up and debated in Madison. While, the biennial budget is still being discussed and negotiated with Majority Party leaders in both houses, important issues such as transportation funding and K-12 education funding need to be negotiated before the budget comes to the Assembly floor.

However, there is another plot being hatched in Madison which has significant implications not only for Wisconsin’s skilled workers but for taxpayers as well. Just this week, I stood beside my colleagues, laborers, and construction groups for a press conference which focused on a new report from the Midwest Economic Policy Institute. This report considered the potential repeal of the state’s prevailing wage law, and its impact on our state’s workforce and on taxpayers’ pocketbooks. Prevailing wage laws require that construction workers on state projects be paid the wages and benefits prevailing for similar work in the surrounding area. This prevailing wage rate helps prevent a race to the bottom that could lead to a less productive workforce and inferior construction practices.

In 2015, the Legislature ended prevailing wage for local construction projects, and the impact was disastrous for Wisconsin’s workers. Since the repeal came into effect, there has been a 50 percent increase in construction projects going to out-of-state contractors. Now, Republican legislators want to repeal prevailing wage for state projects as well.

According to the Midwest Economic Policy Institute’s research, a construction worker would see their average yearly salary of $51,000 be cut to $29,500, under a prevailing wage repeal. That is a 44 percent cut in pay! This hard-earned income is not only taken away from workers who receive prevailing wage – it has a far-reaching negative multiplier effect for all Wisconsinites. We all know that the economy is interconnected, and cutting income for workers in one area has an impact on all of us. Northern Wisconsin can’t endure a 44 percent wage loss for workers who want to buy homes, raise families, and support local businesses in our communities.

Our workforce is at a crossroads. Now more than ever, we need to protect Wisconsin’s workers and make sure there is ample opportunity for them to succeed in highly skilled trades.

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Democrats, Veterans Continue Battling Possible Prevailing Wage Repeal

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GOP Proposal Would Eliminate Prevailing Wage On State-Funded Construction

Tuesday, June 20, 2017, 3:55pm
By Laurel White

Democrats and veterans groups are continuing to fight a repeal of Wisconsin’s prevailing wage laws.

The laws set minimum salary requirements for workers on government-funded construction projects. In 2015, GOP lawmakers repealed those requirements on local projects. This session, they’ve introduced a bill that would extend that to state-funded projects.

At a state Capitol press conference Tuesday, Democratic lawmakers argued the change would lower wages in a field that employs a proportion of veterans.

Matt Bell, an Army veteran and owner of a contracting business in McFarland, said the repeal of prevailing wage would hurt his business.

“If you create a work environment that suppresses wages, drives people from a meaningful career in construction and encourages out of state construction companies to take Wisconsin jobs, you will drive people of out their jobs that they love and deny them the ability to provide for their families,” Bell said.

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Prevailing Wage Repeal Could COST Wisconsin Taxpayers Over $300 Million Per Year

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Analysis of studies cited by advocates of prevailing wage repeal highlights massive social costs

FOR IMMEDIATE RELEASE: June 19, 2017
Wednesday, May 31, 2017

Madison: While critics of Wisconsin’s prevailing wage law have long claimed that repeal would save money by cutting the wages of blue-collar construction workers, a Midwest Economic Policy Institute (MEPI) analysis of two reports frequently cited to support the claims of prevailing wage critics shows that repeal could actually cost Wisconsin taxpayers over $300 million each year.

For its study, MEPI examined how construction wage cuts would affect overall state tax revenues and reliance on five different government assistance programs utilizing the Wisconsin Taxpayers Alliance’s recent claim of a 44% cut, and a 2015 Wisconsin Legislative Fiscal Bureau analysis that suggested repeal of prevailing would reduce wages by 14.1%.

“If an entire segment of Wisconsin’s blue-collar workforce faced a wage cut of 14% to 44%, it would mean thousands more Wisconsin workers would be on government assistance, and Wisconsin’s state government would have significantly less tax revenue to pay for these benefits,” said MEPI Policy Director Frank Manzo IV. “Using the wage cut figures promised by the law’s critics, we can assess that prevailing wage repeal would impose a potential social cost to Wisconsin taxpayers of hundreds of millions of dollars each year-without producing any real savings in total project costs.”

The current average wage for skilled construction workers, on which MEPI’s analysis is based, is $51,600 per year. The 44% wage cut claimed by the Wisconsin Taxpayer Alliance would reduce this average to less than $29,000 per year for those employed on public works projects. This would leave affected construction working families of four eligible for well-over $16,000 per year in government subsidized health, food and heating assistance, plus another $5,000 per year in Earned Income Tax Credits (EITC). The reduction in wages would also reduce their state and federal income tax payments by an average of $4,800 per year, for a potential annual social cost of more than $26,000. Similarly, a 14% wage cut would result in a potential social cost of over $17,000 per year for a family of four.

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(Full PDF of Report)