Sherry Buchanan: Leave prevailing wage alone

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OpEd Sherry Buchanon
4/9/18

Once again, Republicans are trying to repeal Missouri’s prevailing wage. This law protects standards for decent wages, guarantees a fair bidding process, and demands safety and quality for public projects. The Kansas City Star recently called repeal efforts “the political lunacy of advocating for middle-class wage cuts during an era of stagnation and rising inequality.”

Prevailing wage protections started in 1931 when the Davis-Bacon Act was signed by Republican President Herbert Hoover. The act came about after two congressmen teamed up to protect their states from contractors who were bringing in low-paid labor from Alabama to do work on taxpayer-funded projects. Not only did the congressmen object to displacing local labor, they also recognized that these migrant workers would not be long-term taxpayers, consumers and constituents. They recognized that paying the lowest wages was not good overall economics.

Missouri’s prevailing wage law requires workers, union or nonunion, to be paid set wages on taxpayer-funded projects such as schools, jails and bridges. Wage rates are determined county-by-county from voluntary annual wage reports submitted by contractors who work in those counties. Those who pay union rates and those who do not are included in the average. So essentially, the “prevailing wage” in each county is the local going rate for various types of labor.

Because trade unions have successfully bargained for higher compensation, and because union-skilled labor is preferred by many local private and public builders, local wages are higher than they might otherwise be.

…

I want public policy that protects workers’ ability to make living wages so they can pay taxes and be vigorous consumers, helping our businesses and economy to prosper in ways that are good for everyone, not just the rich. I want public policy that supports a fair bidding process for contractors and rewards contractors willing to do quality work. I want public policy that guarantees safe construction of schools, roads, county jails and bridges. I want policy that supports spending local taxes to pay local workers who, in turn, spend locally.

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SOUTH BEND PASSES RESPONSIBLE BIDDER ORDINANCE

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By IUOE Local 150

On April 11, South Bend Mayor Pete Buttigieg signed a responsible bidder ordinance (RBO) which was passed by the Common Council on April 9th. It sets conditions for contractors to be classified as “responsible” and eligible for work on projects of less than $150,000 in value.

An RBO is meant to protect taxpayer dollars as well as small businesses by making sure public works projects are completed efficiently and held to a high standard. They typically contain requirements such as participation in a training program and a clean safety record.

Mayor Buttigieg told WVPE radio that this ordinance was something that the city has been working on for a while. “I really view this as a community effort, there was a lot of leadership on the council,” Buttigieg said, “It was something we’ve been kicking around for a long time, but it took us a while to get it right and make sure that what we came up with really fit South Bend.”

“Ensuring that responsible contractors are prioritized for work opportunities in South Bend protects workers and delivers the best outcome for taxpayers,” said IUOE Local 150 President-Business Manager James M. Sweeney. “The residents funding this work deserve the assurance that their money will go to contractors who are qualified, capable and have a track record of quality and safety.”

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New Jersey bill seeks P3 expansion

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By Andrew Coen
Published April 13 2018, 11:08am EDT

New Jersey lawmakers are pushing again for an increase in the use of public-private partnerships to jump-start infrastructure improvements in the cash-strapped state.

Two and a half years after former Gov. Chris Christie conditionally vetoed an expansion of New Jersey’s P3 program, a state senate committee advanced legislation on April 5 that if enacted would permit localities to enter into P3 agreements for building and highway infrastructure projects. The measure would make local governments, school districts, public authorities and state colleges eligible to enter into P3s where the private entity would assume full or partial financial and administrative responsibility for capital projects.

“The whole purpose is to provide another tool for flexibility in financing,” said State Sen. Steven Oroho, R-Franklin., who co-sponsored the bipartisan bill with Senate President Steve Sweeney, D-Gloucester. “Any capital asset that has a revenue stream associated with it could benefit.”

Michael Likosky, who heads the infrastructure practice at 32 Advisors, said incorporating more P3s in New Jersey would help the state realize savings from competitive bidding and incorporate better technologies with expertise of the private sector. He said this strategy has had success in neighboring Pennsylvania with bridge projects and provides potential to rethink financing strategies at New Jersey’s public universities, highways and New Jersey Transit.

“New Jersey has to focus again on economic development and growth, which has gone through a hiatus,” said Likosky, who has more nearly two decades of experience providing advice on P3s and infrastructure investment. “New Jersey has difficult choices to make if it wants to grow its infrastructure and economy.”

Likosky said since the bill includes a provision allowing availability payments for financing, there is a wide array of capital projects that could benefit from P3s, even if they don’t include dedicated revenue streams. He said not having P3 legislation on the books since late 2015 has limited the state’s options to address aging infrastructure.

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AG Healey Leads Multistate Effort to Curb Misclassification of Workers

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FOR IMMEDIATE RELEASE: 4/30/2018
Office of Attorney General Maura Healey
The Attorney General’s Fair Labor Division

The following are excerpts from the release:

Attorney General Maura Healey today led a coalition of 12 state attorneys
general in filing a brief to the National Labor Relations Board in support of a decision that
misclassification of employees as independent contractors constitutes an unfair labor practice in violation of the National Labor Relations Act.

…

“Employers that misclassify their employees cheat local and state governments from
collecting millions in taxes each year and create an unfair playing field for others,” said AG Healey. “I urge the National Labor Relations Board to uphold the decision in this case.”

According to the brief, misclassification is an increasingly common way for employers
to avoid their legal obligations to employees and to unfairly compete in the marketplace.
When employers misclassify their workers as independent contractors, it is significantly
harder for those employees to assert their workplace rights, including protections from wage theft, harassment and discrimination. Misclassified workers are also denied Occupational Health and Safety Act protections, and are unable to form unions, collectively bargain for wages and benefits, or join in concerted efforts to improve conditions in their workplace without fear of reprisal from employers.

Employers that misclassify their workers are also able to avoid paying unemployment
insurance and contributing to the worker’s compensation system, which poses significant cost in terms of lost revenue for state, local, and federal government. According to two studies cited in the brief, Massachusetts loses an estimated $259 million to $278 million annually, $87 million of which is in unpaid unemployment insurance taxes, because of misclassification. In 2015, the Massachusetts Council on the Underground Economy reported recoveries of more than $50 million from employers who misclassified their employees from 2013 to 2015.

…

The coalition of state attorneys general submitted today’s brief at the invitation of the National Labor Relations Board. Massachusetts and Pennsylvania led today’s brief, joined by Connecticut, Illinois, Maryland, Minnesota, New Jersey, New Mexico, New York, Oregon, Virginia and Washington.

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A.G. Schneiderman Leads 11 Attorneys General Opposing Trump Dept. of Labor Program to Offer Amnesty to Labor Law Violators

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PAID Program Encourages Violators to Require Employees to Waive State Law Protections – Like Higher Minimum Wage Levels – in Exchange for the Payment of Overdue Wages

Schneiderman Also Files Freedom of Information Act Request Seeking Information on Purposes of Program and Impacts on State Labor Enforcement Efforts

Schneiderman: We Won’t Hesitate to Prosecute Wage Theft – Even if the Federal Government Won’t

Posted on April 11, 2018 in Business News

NEW YORK – New York Attorney General Eric T. Schneiderman – leading a coalition of eleven Attorneys General – sent a letter to Labor Secretary Alexander Acosta raising serious concerns about the U.S. Department of Labor’s Payroll Audit Independent Determination (PAID) Program, a pilot program that allows certain employers who violate labor laws to avoid prosecution and penalties in exchange for simply paying the back wages their employees were already owed under federal law.

The letter makes clear that the PAID Program encourages employers to require their employees to waive important state law protections, like higher minimum wage levels and longer time periods to sue, in exchange for the employer’s payment of overdue wages. Even though such waivers may not be enforceable against state law enforcement entities, employees may be misled into believing they have no legal recourse to fully vindicate their workplace rights.

“As we’ve said from the start, the PAID Program is nothing more than a Get Out of Jail Free card for predatory employers. Our coalition of Attorneys General won’t stand by as the Trump administration grants amnesty to those who commit wage theft and take advantage of their employees,” said Attorney General Schneiderman. “I want to be clear to those doing business in New York: we will continue to prosecute labor violations to the fullest extent of the law, regardless of whether employers choose to participate in the PAID Program – because all workers deserve a fair day’s pay for a fair day’s work.”

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California attorney general seeks to combat state’s growing underground economy

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by Mark Iandolo
Apr. 9, 2018, 10:44am

SACRAMENTO, Calif. (Legal Newsline) – California Attorney General Xavier Becerra announced April 2 that he is working with Sen. Cathleen Galgani on legislation to permanently establish the Tax Recovery and Criminal Enforcement (TRaCE) Task Force within the California Department of Justice.

“Here in California, home to the world’s sixth-largest economy, every worker who powers this engine deserves rights at work, every upstanding business owner deserves a fair market, and every taxpayer deserves to see their hard-earned money used to fund vital services,” Becerra said in a statement. “If you work hard and play by the rules, you should be able to get ahead. This legislation would provide the resources needed to enforce the law and protect the pocketbook of every hard working Californian.”

Senate Bill 1272 would expand TRaCE to all the state’s metropolitan regions- Sacramento, Los Angeles, San Diego, the Bay Area and Fresno. The bill seeks to combat California’s growing underground economy.

“The underground economy results in significant uncollected revenues that are desperately needed to fund basic government services,” said Galgiani in a statement. “The TRaCE Task Force, operating as a pilot program, has recovered millions of dollars in lost tax revenue for the state. I’d like to thank the agents for their rigorous work investigating and prosecuting the most egregious felony-level underground economic crimes in the state.”

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Trump signs bill that kills Obama-era rule targeting wage theft, unsafe working conditions

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By Kimberly Kindy – Washington Post
Mar 28, 2018, 8:56 am

President Donald Trump signed a bill Monday that killed an Obama-era worker safety rule that required businesses competing for large federal contracts to disclose and correct serious safety and other labor law violations.

Earlier this month, the Senate voted to eliminate the Fair Pay and Safe Workplaces rule, which applied to contracts valued at $500,000 or more. Votes on the bill in both the House and Senate divided along party lines.
said.

The Fair Pay and Safe Workplaces regulation was finalized in August but most of it was never implemented. Within days of it being finalized, the Associated Builders and Contractors (ABC) sued, securing a temporary injunction that prohibited the federal government from implementing it.

In a last-minute effort to fight for the rule earlier this month, Sen. Elizabeth Warren, D-Mass., released a staff report that showed that 66 of the federal government’s 100 largest contractors have at some point violated federal wage and hour laws. Since 2015, the report says, more than a third of the 100 largest OSHA penalties have been imposed on federal contractors.

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San Jose, Calif., Weighs Boost for Construction Project Workers

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By Joyce E. Cutler
March 27, 2018

Private construction projects in San Jose, Calif., that receive $3 million or more in tax breaks or other public financial support would have to pay prevailing wages and hire local workers under a proposal the city council is expected to consider next week.

“There are three basic challenges we’re trying to grapple with. One is a severe shortage of affordable housing and of housing supply generally; substantial shortage of construction labor, which are driving up construction costs; and third, a growing gap between those who are benefiting from the great prosperity here in the Bay Area and those who are gasping for air with the rising tide,” Liccardo said.

Local Standards

The proposal would require that employers on the projects pay a wage-and-benefits package that’s at least equivalent to the state-determined levels for the work and geographic area. At least 30 percent of the workers on a qualifying project within the city would have to live within 50 miles of the job site. A quarter of apprentice hours would have to go to disadvantaged workers. Projects would have monitoring and compliance provisions.

The requirements would cover projects that receive at least $3 million in public subsidies, including money, land, or other direct financial assistance or a substantial reduction in fees or taxes.

“The end goal is to provide good quality jobs to local workers. And whether we do that by way of initiative or reaching a compromise by the more conventional channels is not so important to us,” Ben Field, South Bay Labor Council executive officer, told Bloomberg Law.

Union-Backed Initiative

The agreement was reached after negotiations with the South Bay Labor Council, Working Partnerships USA, the Santa Clara-San Benito Counties Building Trades, and the Mechanical, Electrical, Plumbing, and Sprinkler Fitters (MEPS) unions, Liccardo said in a memo to the council.

“One of the best ways to ensure that good quality jobs go to local workers is to provide a prevailing wage,” Field said March 23. “One of the basic problems that we’re seeing here is middle class jobs are disappearing. A large part of the reason is the construction workforce is not being paid adequately.” Would-be construction workers aren’t going into trades or crafts where the wages are depressed.

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LYNN COUNCIL VOTES TO PENALIZE CONTRACTORS WHO VIOLATE STATE LABOR LAWS

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BY THOMAS GRILLO

March 27, 2018

LYNN – The City Council adopted a sweeping ordinance Tuesday night to prohibit contractors who violate the state’s labor laws from doing business with the city.

In a unanimous vote, the 11-member panel approved a measure to bar employers who have failed to pay their workers from obtaining city contracts.

Before the meeting, more than 100 union protesters rallied in front of City Hall urging the City Council to vote yes.

“Wage theft hurts all of us, including honest businesses who are underbid and undercut by businesses that cheat the system,” said Kathryn Cohen, an organizer with the North Shore Labor Council. “Taxpayers lose as much as $200 million in tax revenue annually. Here in Lynn we are saying enough.”

Two hours later, the council adopted the regulation that would also impact developers who have received a tax break from the city.

“Someone has to speak up for the workers,” said City Councilor Peter Capano. “We’ve put a lot of serious thought into this.”

…

But Cynthia Mark, chief of the attorney general’s Fair Labor Division, testified that her department, which consists of 13 lawyers and 20 investigators, could use the help a local law would provide.

Over the last two years, her office has received 40 complaints about Lynn companies and has recovered $80,000 in wages, she said.

“We welcome your partnership,” she told the council. “We can’t do it alone.”

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Construction workers least likely to have health insurance, report finds

Posted by National Alliance for Fair Contracting on
March 27, 2018

 

Dive Brief:

  • Of the 20 professions least likely to have health insurance, 11 of them are in the construction industry, according to MarketWatch
  • The average uninsured rate for fulltime workers in the U.S. is 12%, but the percentage of certain categories of construction workers without health insurance is much higher, including roofers (50.5%); drywall hangers, finishers and ceiling tile installers (49.5%); plasterers and stucco masons (49.1%); fence installers (45.7%); carpet, tile and floor installers (45.2%); painters and paperhangers (43.1%); construction trade helpers (42.8%); installation, maintenance and repair helpers (40.5%); cement masons, concrete finishers and terrazzo workers (38.7%); brick masons, block masons, stonemasons and reinforced iron and rebar workers (38.6%); and construction laborers (37.5%)
  • At least some of the workers who reported not having health insurance coverage could be classified as independent contractors, which means that they are operating as a business and not entitle to benefits from another employer.

Dive Insight:

In most states, companies are required to carry workers’ compensation insurance so that if a worker is injured on the job, medical bills, partial salary, rehabilitation costs and training for a new trade, if necessary, will be paid regardless of whether the injured person has health insurance. However, is the worker is classified as an independent contractor or contract worker, then he or she is not covered by this benefit.
And, according to the Workers Defense Project, the southern U.S. is the region most likely to have construction workers laboring as independent contractors.
As part of its study, the Workers Defense Project reported that only 5% of the 1,435 workers it interviewed in six southern states
said workers’ compensation would cover the cost of their work injuries, and 57% said they earned less than $15 an hour.