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

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

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IL: Attorney General Raoul Convenes First Meeting Of Worker Protection Task Force

1/23/20

Chicago, IL (WorkersCompensation.com) – Attorney General Kwame Raoul today convened the first meeting of a task force that will facilitate collaboration between the Attorney General’s office, county prosecutors and state agencies in order to better protect workers’ rights and law-abiding businesses in Illinois.

The Worker Protection Unit Task Force was created under Senate Bill (SB) 161, which was initiated by Attorney General Raoul and signed into law by Gov. JB Pritzker. The new law became effective on Jan. 1, 2020. The task force will bring together the state’s leading regulatory agencies that impact workers, law enforcement and worker protection advocates in order to better combat wage payment violations and unfair labor practices. …

… The new law established a Worker Protection Unit Task Force to facilitate information sharing and collaboration between the Attorney General’s office, local prosecutors, the Illinois Department of Labor, the Illinois Department of Human Rights, the Illinois Department of Employment Security and the Workers’ Compensation Commission. …

In addition to establishing the Worker Protection Unit Task Force, Senate Bill 161 codified the Worker Protection Unit within the Attorney General’s office to enforce violations of worker protection laws. The law also gives the Attorney General clear legal authority to investigate and bring enforcement actions against employers that commit wage theft and other workplace rights violations.

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AG Nessel Joins Effort Urging Regulators To Protect Workers From Harmful Anticompetitive Labor Practices

July 18, 2019 at 10:20 am

LANSING, Mich. – Michigan Attorney General Dana Nessel joined 17 other Attorneys General earlier this week in urging collaboration between Federal Trade Commission (FTC) regulators and state attorneys general to protect workers from anticompetitive labor practices that depress wages and limit job mobility and opportunities for advancement.

In a comment letter filed in connection with the FTC’s hearings on competition in the 21st Century, the coalition argues that the FTC should increase its focus on antitrust enforcement in labor markets and use their authority to crack down on non-compete and no-poach contract agreements-in addition to considering how workers are impacted by proposed mergers.

“In an era where wages continually decline and workers’ protections, like prevailing wage, are routinely stripped, we must begin reviving antitrust regulation in labor markets,” said Nessel. “We must do this to protect workers from harmful anticompetitive practices such as targeting low-income workers by forcing them to sign non-compete agreements and ultimately limiting their earning potential.”

Antitrust laws work to protect competition in markets, benefiting both consumers and workers. These laws typically work to prevent harmful practices such as monopolization, price-fixing and market allocation, which can result in higher prices, depressed wages, decreased supply of products, or lower quality products and services. State attorneys general and the FTC have a strong interest in protecting the competitiveness of markets and can work both independently and collaboratively to take enforcement action to stop antitrust law violations.

Recent labor related antitrust actions brought by state attorneys general have confronted restrictive contract agreements and proposed mergers. In fact, Nessel joined a multi-state lawsuit last month against the anticompetitive T-Mobile and Sprint mega-merger, where one of the main concerns is how potentially harmful it would be to thousands of hard-working laborers in the telecom industry across the nation. Nessel and the coalition also cited that the merger could result in substantial loss of retail jobs and lower pay for these workers in the near future.

In their comments, the attorneys general urge the FTC to consider the effect of non-compete, non-solicitation and no-poach agreements due to the limitations they impose on job mobility of workers by directly impacting their opportunity to seek better wages and/or opportunities. These agreements can also prevent competition amongst employers in offering suitable wages, benefits and work environments to obtain the best talent.

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The Department of Labor Has Your Back

The federal Department of Labor (DOL) budget for fiscal year 2015 is official, and it includes new programs and additional protections for workers and employees. This is exciting news for millions of Americans, including the long-term unemployed, students who want to work when they graduate, and current employees whose employers may not be following the law as they should. Check out the changes that are being put in place to help you.