Prevailing wage crucial for construction workers

Posted by National Alliance for Fair Contracting on

BY SAMANTHA DRAPER
POSTED 02.20.2018

It is sadly ironic that portions of the construction industry have been fighting for years to reduce wages on these important but dangerous jobs are now claiming they face a skilled labor shortage.

Just last year, California’s housing industry spent millions of dollars lobbying against minimum labor standards in any part of the residential construction sector. Even though research shows that construction labor represents a paltry 15% of total housing construction costs, they tried making the mathematically absurd claim that paying their workers enough to pay the rent -even in exchange for less red tape on certain projects – would somehow make California’s housing affordability crisis worse.

Some California contractors talking about labor shortages were trying to convince California municipalities to become “charter cities” so they could circumvent prevailing wage rules.

But they haven’t been the only ones.

Since 2015, five U.S. states have repealed their prevailing wage laws – laws that establish minimum wages for different skilled crafts on publicly funded projects and promote privately financed training programs that are designed to prevent skilled labor shortages. Other states are considering following suit, even though labor represents just over 20% of the total cost of public works projects – a historically small and declining share in what constitutes fully one-third of all output in America’s fourth-largest economic sector.

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Prevailing wage a better value

Posted by National Alliance for Fair Contracting on

Henry Yanez
Published 11:00 p.m. ET Feb. 12, 2018

This year, special interests collected signatures to put the question of repealing Michigan’s long-standing prevailing wage law before the Legislature or on the ballot – often misconstruing the true intent of what their petition would do. They tell you it’s about saving you money. Nothing could be further from the truth. Let me tell you what prevailing wage is.

Michigan’s prevailing wage law ensures that our publicly financed buildings, roads, bridges and utilities are constructed using highly skilled and trained workers who are paid the regional average for their trade. The law doesn’t artificially inflate wages or the cost of construction and doesn’t force workers to be union members.

It just ensures that the people building our infrastructure earn a fair wage and benefits, and that their pay reflects their level of training. The law keeps skilled tradespeople and their families here in Michigan, where they spend money, grow the local economy and pay taxes.

Lowering wages reduces job productivity and lengthens the project schedule. Mistakes also happen when inexperienced, lesser-trained workers do the work. Michigan has already experimented with repealing prevailing wage in the mid-1990s. Costs went up and our skilled workforce went down. A study of highway and bridge work in 10 states found that high-wage workers built 74.4 more miles of roadbed and 32.8 more miles of bridges for $557 million less, compared to low-wage workers. Better and more efficient work for less money isn’t a difficult idea to get behind. …

Rep. Henry Yanez, D-Sterling Heights, represents Michigan’s 25th House district.

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Murphy signs executive order creating Jobs and Economic Opportunity Council

Posted by National Alliance for Fair Contracting on

BY Michael Hill, Correspondent
February 27, 2018, 5PM EST

At the International Union of Operating Engineers Training Center Local 825, Gov. Phil Murphy painted New Jersey’s economy as stuck in the mud.

“For eight years, we have slogged behind every competitor state in multiple categories,” said Murphy.

His list went on – challenging his new role to lead the state to a stronger and fairer economy.
“It’s time for New Jersey to get back to leading by doing,” said the governor.

With the stroke of a pen, the governor signed another executive order, his 12th in six weeks. This time, creating the Jobs and Economic Opportunities Council within the Governor’s Office made up of the lieutenant governor and several cabinet members.
“Specifically, I’m directing the council to analyze state and national economic trends and data to design the policies needed to attract, expand and retain good jobs. I am asking them to identify potential funding sources,” said Murphy.

The governor said the council’s scope will be broad and do what he’s already ordered his cabinet to begin doing – streamline state government by considering how best to use technology.

“Turning New Jersey around must begin with fixing our economy, making us a place that creates jobs and new opportunities in innovation and infrastructure” continued Murphy.

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AG investigation convicts Queens construction companies of ripping off employees

Posted by National Alliance for Fair Contracting on

By Mark Hallum
FEBRUARY 20, 2018

State Attorney General Eric Schneiderman announced the conviction of three Queens construction companies after they pleaded guilty to misclassifying employees as independent contractors to avoid paying overtime.

Lotus-C Corporation of Jackson Heights, Johnco Contracting Inc. of Bayside, and RCM Painting Inc. of Maspeth were all convicted of felony counts of grand larceny and falsifying business records in Queens Supreme Court on Feb. 7 and will pay over $730,000 in restitution for missed wages and unpaid taxes.

“Led by pure greed, the defendants in this case attempted to sidestep the law – misclassifying their employees as a way to stiff them on the overtime pay they rightfully earned,” Schneiderman said. “My office will continue to crack down on those who seek to steal from their workers in order to line their own pockets.”

The investigation by the attorney general’s office revealed the defendant corporations failed to properly pay employees – usually carpenters and painters – for overtime by falsely filing them as independent contractors. Over 150 workers were affected and did not receive the time and half pay for working over 40 hours a week required by law.

…

As part of the plea deal, the three corporations will be dissolved and Cesar Agudelo of Lotus-C and John Massino of RCM Painting and Johnco will be barred from bidding on public works contracts for up to five years.

About $371,000 will go to the workers as restitution while another $360,000 from the defendants will go to unpaid unemployment insurance contributions.

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California DA: Contractors failed to pay $200K in prevailing wages, state taxes

Posted by National Alliance for Fair Contracting on

Kim Slowey
Feb. 26, 2018

Dive Brief:

  • The Orange County (California) District Attorney’s Office has charged a group of contractors that performed work on the Pacific Amphitheater at the Orange County Fair and Event Center in Costa Mesa between 2013 and 2015 with underpaying workers and failure to pay state taxes, an amount totaling $200,000, according to the Los Angeles Times.
  • Prosecutors allege that the owners of AWI Builders, Zhirayr “Robert” Mekikyan and his wife, Anna Mekikyan of Pico Rivera, California, did not pay workers the prevailing wage rate established for the $10 million project, which was a new lobby and entrance area for the amphitheater, and created fraudulent records to conceal the supposed fraud. The DA’s office also claims that AWI did not report the correct amount of wages to the California Employment Development Department to avoid paying its fair share of state payroll taxes.
  • Also named in the suit is another one of the Mekikyans’ companies, Construction Contractors Corp., and a family member’s business, TOSC, Inc. Prosecutors allege that those companies also submitted forged apprenticeship certificates. An attorney for the Mekikyans said the charges against his clients are false.

Dive Insight:

Prevailing wage fraud is a problem nationwide, and local authorities have their hands full trying to root it out.

The Manhattan District Attorney’s office has categorized this underpayment of workers as wage theft and, in December, charged area construction companies, as well as their owners, with stealing nearly $3 million in wages from more than 400 construction workers. Manhattan DA Cyrus R. Vance Jr. said the companies stole employee pay through checks returned for insufficient funds, hourly rates lower than the prevailing wage, not paying overtime or not paying workers at all. The amounts not paid per construction company ranged from $13,000 to $700,000.

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Ninth Circuit Considers Challenge to Prevailing Wage Law

Posted by National Alliance for Fair Contracting on

BIANCA BRUNO
February 5, 2018

(CN) – The Ninth Circuit Monday considered arguments by nonunionized construction groups challenging a California wage law they claim prevents the open-shop industry from exercising its free speech rights.

The Associated Builders and Contractors of California Cooperation Committee and Interpipe Contracting appealed the dismissal of their case brought against Attorney General Xavier Becerra, Labor Commissioner Julie Su and Department of Industrial Relations director Christine Baker, which challenged the constitutionality of an amendment to the state wage law that went into effect in 2017.

Senate Bill 954 only allows employers who make payments to an “industry advancement fund” as required by a collective bargaining agreement to receive a prevailing wage credit through a state subsidy.

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(Order in ABC vs. Becerra)

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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Column: Trump expected to tout infrastructure plan this week, but funding remains murky

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By Mary Wisniewski
Jan 28, 2018

The long-promised Trump plan to rebuild the nation’s roads, bridges and other public works could finally be released in the next few weeks – the president is expected to tout his program in Tuesday’s State of the Union address, and more details may come in February.

But President Donald Trump’s plan could act like a derailed train and go nowhere fast because of funding questions. Everyone likes better roads and water systems, but many Republicans will balk if a gas tax hike is needed to pay for it, and Democrats have expressed doubts about what they see as its over-reliance on local government and private dollars.

“When they built the Hoover Dam, they didn’t say, ‘Let the states do it,’ ” said Democratic Illinois Congressman Mike Quigley in an interview. “(President Dwight D.) Eisenhower didn’t say ‘We’re going to build the interstate system and the states will pay for it.’ ”

How to fund the program is the big unanswered question, both on the local and the federal side, noted Frank Manzo, policy director for the Illinois Economic Policy Institute, a nonpartisan think tank whose members include representatives from the construction industry.

“The devil is in the details …” said Manzo in an interview. “The actual funding side is going to be very difficult and even more difficult in the wake of a tax reform plan that will result in fewer resources for government spending, let alone infrastructure projects.”

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(See Full PDF of Fact Sheet)

Hail the Prevailing Wage!

Posted by National Alliance for Fair Contracting on

A prevailing wage has come under attack from advocates looking for something cheaper. And it’s shameful!

BY GARY LABARBERA
MARCH 8, 2018 1:54 PM

This is New York. We don’t do “race to the bottom” here.

We don’t invite in bottom-fishers and corner-cutters to build our buildings. And we don’t scapegoat workers.

That’s because we need the best. So we build the best.

As a Commercial Observer reader, the same goes for you, too.

You don’t “race to the bottom” when it comes to staffing up your brokerage, your development company, or your investment firm.

Yet in the world of public-sector construction, prevailing wage laws have again come under attack from advocates of bottom fishing.

But prevailing wage laws are not just good for construction workers and the agencies undertaking public projects. These laws are also good for all New Yorkers.
For more than a century, New York State has maintained an important and progressive social compact: fair wages for fair work. The pay of workers engaged in public projects must align with local prevailing wage and benefit levels. Hard-working New Yorkers thus have access to good-paying jobs and proper protection from unsafe working conditions.
And with the State’s FY 2018 capital budget exceeding $14 billion, it’s critical to shake off faulty assumptions-and recognize that prevailing wage requirements also save taxpayers money.

New data now show how these rules ensure effective cost management on public projects.

…

Gary LaBarbera is the president of the Building & Construction Trades Council of Greater New York.

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Prevailing Wage, Local Workers Sought for Affordable Housing Projects

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Posted by Debbie L. Sklar
March 14, 2018

Builders who receive city money for affordable housing and public works projects would be required to hire skilled, local workers and pay them a prevailing wage under a proposal advanced by a City Council committee Wednesday.

Councilwoman Georgette Gomez’s “HireSD” program would aim to lift people out of poverty by requiring developers in certain projects to hire workers who have completed apprenticeships or other training because those workers are paid a higher wage. The resulting demand for skilled workers would create an incentive for economically disadvantaged people to complete that training as a “pipeline to middle-class jobs,” the councilwoman’s Chief of Staff Dominika Bukalova said.

The plan would also require developers of certain projects to hire local people and pay a prevailing wage, a minimum wage currently paid in certain public works projects.

The rules would apply to projects that receive money from the city’s affordable housing fund and a business subsidy program. Part of the proposal is an expansion of a 2013 prevailing wage ordinance that applies to public works projects.

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