Columbus, OH, tests plan to increase apprenticeships, local hires

By Kim Slowey
Nov. 2, 2017

Dive Brief:

  • The city of Columbus, OH, is testing a new construction apprenticeship and local hiring plan for public projects that it hopes will boost the local construction workforce, according to The Columbus Dispatch.
  • The agreement between the city and the Columbus Building & Construction Trades Council, AFL-CIO, requires the organization to host apprenticeship fairs, use 20% Columbus and 25% regional residents on the project, and collect five cents for every hour each member works to help fund an apprentice scholarship fund. City officials said non-union contractors will also be able to bid the project.
  • The first project to operate under the program is the construction of an $8 million firehouse. The local chapter of the Associated General Contractors of America expressed concern that the new workforce requirements would make it more difficult for contractors to bid on projects competitively.

Dive Insight:

It’s not uncommon for state and local governments to specify hiring requirements for publicly funded projects. Local activists often see it as a way to get a return on invested taxpayer money. However, while the goal of using as many locals as possible is not one with which many would disagree, the details of these initiatives are up for debate.

First, in some markets, contractors have difficulty finding enough workers to meet local mandates. For example, contractors working on the new Little Caesars Arena in Detroit were fined almost $3 million through March of this year for failing to meet the local hiring requirements laid out by the city. By all accounts, the contractors did their best to recruit local workers, but the skilled talent pool was just too thin.

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AGC of Ohio Chief Debunks Prevailing Wage Detractors

Submitted by Karen Andryscik on
August 28, 2017 – 8:19am

By Richard J. Hobbs, Executive Vice-President – AGC Columbus

After 36 years at the helm of the Associated General Contractors of Ohio (an organization composed of open shop/nonunion and union commercial contractors throughout the state), I’ve heard many outrageous, false claims about significant savings by removing Ohio’s prevailing-wage law. I respond to the Aug. 19 op-ed by Butch Valentine, Laurelville’s volunteer fire chief, blaming the Ohio wage law for the inability to build a new fire station.

Valentine contended that the law inflates the cost of a new facility by 37.5 to 50 percent. This is an outrageous statement. Construction labor represents on average 22-25 percent of a project cost, depending on complexity. Valentine indicated that the cost of a $800,000 fire station would be increased by $300,000 to $400,000. Either his original architectural plans excluded labor costs or he was counting on volunteer construction labor.

He went on to cite inaccurate claims as factual. His referred to the Legislative Service Commission study of 2002 that was thoroughly debunked by Ohio State University Professor Herbert Weisberg, and by a 2017 study from researchers at Bowling Green State, Kent State and Colorado State universities. It found that “LSC had no valid basis” to its claimed cost savings. Valentine further asserted that prevailing-wage projects had less competition. Wrong again. The 2017 study found that projects covered by prevailing wages had more competition, and that more of those contracts went to Ohio construction companies, not out-of-state firms.

Valentine also suggested that Indiana has seen significant savings by repealing its prevailing-wage law. Once again, false. The Indiana Republican assistant House majority leader candidly admitted this year that his state hasn’t “seen a dime of savings out of it,” and that claims of huge savings from repeal, like Valentine’s, were just “rhetoric.”

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Ohio House eyes prevailing wage law for public works projects

By Marc Kovac, staff writer
Published: May 9, 2017 3:50 PM

COLUMBUS – The Ohio House launched hearings Tuesday on legislation that would give local communities discretion on whether to follow the state’s prevailing wage law on public works projects.

Backers of HB 163 and companion legislation in the Ohio Senate say the proposal stops well short of an outright repeal, as has been attempted in the legislature in past sessions.

Instead, Rep. Kristina Roegner (R-Hudson) said, it would give affected local governing authorities the power opt out of “state-mandated wage” requirements.

But Democrats on the Economic Development, Commerce and Labor Committee voiced concern about the bill Tuesday. Rep. Thomas West (D-Canton) questioned whether the bill would lead to fewer jobs, lower wages and more people needing public assistance.

“Is this bill worth losing billions of economic activity…?” he asked.

And Rep. Michele Lepore-Hagan (D-Youngstown) asked whether it would be more appropriate to increase local government funding.

Union groups also do not support the change – according to the Ohio State Building & Construction Trades Council, Ohio’s prevailing wage law “protects and preserves local area wages on federal and state construction projects. It guarantees that workers are paid fairly.”

Matt Szollosi, executive director of the Affiliated Construction Trades of Ohio, who attended Tuesday’s hearing, said his group is “adamantly opposed” to the legislation.

“Based on data that we have from a recent study that was commissioned and completed by professors at Kent State University, Bowling Green State University and Colorado State University, a severe weakening or repeal of prevailing wage would result in construction workers’ incomes being reduced by 16 percent and would push a significant percentage of construction workers below poverty level and onto public assistance,” he said.

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Proposed Prevailing Wage Changes Would Hurt the Ohio Economy

Midwest Economic Policy Institute – Blog

A new study finds that weakening or repealing Ohio’s prevailing wage standard is unlikely to save taxpayer dollars. In fact, a weaker policy would increase taxpayer burdens as construction worker incomes decrease and their reliance on public assistance increases. A weaker law would also mean fewer resources for apprenticeship training in this fast-growing sector, less work for Ohio businesses and Ohio workers, and negative overall impacts on the Ohio economy.

The study was conducted by researchers at Kent State University, Bowling Green State University, Colorado State University-Pueblo, and the Midwest Economic Policy Institute.

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(Fact Sheet)

(See PDF Copy of Study)

Ohio cities could stop paying prevailing wage to construction workers



COLUMBUS – Local governments could opt out of paying Ohio’s prevailing wage on public construction projects under a new proposal from state Sen. Matt Huffman.

State law requires counties, cities, villages and townships to pay minimum wages and benefits, called prevailing wages, to construction workers on projects exceeding a certain cost.

Huffman plans to introduce a bill next week that would allow jurisdictions to decide whether they pay prevailing wages and for what projects. He said the bill has the support of the Ohio Municipal League and Ohio Association of County Commissioners.

The Affiliated Construction Trades of Ohio, which represents Ohio’s skilled trades, opposes the idea.

Executive Director Matt Szollosi said Huffman’s proposal would cause drive more work to out of state contractors who pay their employees less. Szollosi said that would drive down participation in trade apprenticeship programs, are funded with a portion of hourly pay.

“Labor costs are 23 percent of overall costs so the notion that you can elicit significant savings on the labor side by cutting wages and benefits for workers is unfounded,” Szollosi said.

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Cleveland-area contractor sentenced to prison for paying workers criminally low wages (OH)

By Eric Heisigon January 17, 2017 at 2:54 PM, updated January 17, 2017 at 5:47 PM

CLEVELAND, Ohio — A Cleveland-area contractor who paid his employees criminally low wages while working on projects for the Cuyahoga Metropolitan Housing Authority was sentenced Tuesday to 21 months in federal prison.

Marcus Butler, who operated of L & B Electric of Northeast Ohio, lied on forms between 2011 and 2013 and said he paid his employees $126,514.80 more than he actually had when doing subcontracting work at three CMHA properties.

The work was part of a federally-funded project, as the CMHA receives money from the U.S. Department of Housing and Urban Development. Under federal law, employers working on federal projects are supposed to pay their workers a certain rate, known as a “prevailing wage.”

Butler, 32, of Bedford was indicted in 2015. He pleaded guilty in September to 61 counts of making false statements.

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Viking Village pool workers to get back pay

By Fatima Hussein | July 25, 2016

More than 20 pipefitters and bricklayers constructing the Viking Village Shared Facility Pool in Sharonville will recover a total of $147,000 in back wages and benefits following an investigation by the U.S. Department of Labor’s Wage and Hour Division.

Federal investigators found Kitchener, Ontario-based Gall Construction of America LTD, operating as Acapulco Pools, underpaid 21 workers up to $17 per hour in salary and benefits.

The company violated provisions of the Davis-Bacon and Related Acts, which cover areas of prevailing wage laws and the Contract Work Hours and Safety Standards Act, which govern wage rates for projects receiving federal funds, the labor department said.

In a news release, the department said it determined the company had classified the bricklayers and other workers as general laborers and failed to pay them prevailing wages, fringe benefits and overtime at the rate due for their job titles.

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WHD News Release: 07/11/2016

Release Number: 16-1439-CHI

CINCINNATI, Ohio – Pipefitters and bricklayers constructing the Viking Village Shared Facility Pool in Sharonville under a federal contract will recover a total of $147,000 in back wages and benefits following an investigation by the U.S. Department of Labor’s Wage and Hour Division.

Federal investigators found Gall Construction of America LTD underpaid the workers up to $17 per hour in salary and benefits, and violated provisions of the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act, which govern wage rates for projects receiving federal funds. The company operates as Acapulco Pools.

The division determined the company classified 21 bricklayers and pipefitters as general labors and failed to pay prevailing wages, fringe benefits and overtime at the rate due for their job titles. Gall also failed to keep accurate time and payroll records for employees. To resolve these violations the company agreed to pay the workers the monies owed in back wages and benefits.

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(Mayor) Cranley proposes minimum wage boost for city employees to $15 per hour

Sen. Sherrod Brown joins mayor for announcement

BY: Kristen Swilley, Austin Fast
POSTED: 11:53 AM, Mar 29, 2016
UPDATED: 5:54 PM, Mar 29, 2016

CINCINNATI — Full-time city employees could soon be earning a minimum wage of $15 per hour, among other labor reforms aimed at strengthening the middle class that were announced Tuesday morning by Sen. Sherrod Brown (D-OH) and Mayor John Cranley

The reform package announced Tuesday includes three components:

  • Raising Cincinnati’s living wage from $12.58 to $15 per hour for its full-time (at least 30 hours per week) employees and from $8.25 to $10.10 per hour for its part-time and seasonal workers. Going forward, these increase wage rates are indexed to the Consumer Price Index and will be adjusted annually;
  • Creating a city prevailing wage law that dramatically expands the types and number of government subsidies that trigger prevailing wage requirements. If triggered, the city’s prevailing wage requirements would apply when the state’s requirements are not triggered.
  • Implementing crane safety measures (following a crane accident at The Banks in February) to ensure all crane operators in the city are qualified and all crane operators are appropriately insured.


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Sen. Brown and Labor Secretary Perez Outline Efforts to Address Worker Misclassification (OH)

Publish Date: 2015-11-03

CLEVELAND, OH – Alongside workers who have been denied wages, benefits, and protections because they have been misclassified, U.S. Sen. Sherrod Brown (D-OH) and U.S. Secretary of Labor Thomas E. Perez outlined efforts that would protect workers and businesses that play by the rules. In Cleveland, Brown announced plans to introduce new legislation that would close a loophole in the tax code that allows employers to openly treat full-time workers as independent contractors in order to avoid providing them with earned safeguards and benefits – like payroll tax withholding, overtime, unemployment insurance, and workers’ compensation.

“We should call this what it is: fraud,” Brown said. “We see it in industries from trucking and construction, to service sectors like landscaping and home health care. If employees are classified as independent contractors, then an employer doesn’t have to pay them overtime or contribute to their Social Security or Medicare benefits. When companies cheat tax law and misclassify employees, workers lose, honest businesses lose, and taxpayers lose. This is unfair to workers, unfair to businesses that play by the rules, and it must stop.”

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