Interested persons are invited to appear at a hearing and will be afforded the opportunity to make an oral presentation of their positions. Persons making oral presentations are requested to submit their facts, views, and suggested rewording in writing.
Visitors to the GEF 1 building are requested to enter through the left East Washington Avenue door and register with the customer service desk. The entrance is accessible via a ramp from the corner of Webster Street and East Washington Avenue. If you have special needs or circumstances that may make communication or accessibility difficult at the hearing, please call (608) 267-9403 at least 10 days prior to the hearing date. Accommodations such as ASL interpreters, English translators, or materials in audiotape format will be made available on request to the fullest extent possible.
Analysis Prepared by the Department of Workforce Development
Statutory authority: Section 49.141 (5) (bm), as created by 2003 Wisconsin Act 173, and 227.11, Stats.
Statutes interpreted: Section 49.141 (5) (am), Stats., as renumbered by 2003 Wisconsin Act 173
Relevant federal law: 42 USC 607(f) and 45 CFR 261.70
Federal law. 42 USC 607(f) and 45 CFR 261.70 prohibit an adult in a family receiving assistance under a state program funded by a federal Temporary Assistance for Needy Families (TANF) block grant from being employed or assigned to a position in the following circumstances:
Any other individual is on layoff from the same or any substantially equivalent job.
The employer has terminated the employment of any regular employee or otherwise caused an involuntary reduction of its workforce in order to fill the vacancy with a participant in a TANF-funded program.
States are required to establish and maintain a grievance procedure for resolving complaints of alleged violations of this prohibition.
Explanation of agency authority. Section 49.141 (5) (am), Stats., as renumbered by 2003 Wisconsin Act 173, provides that no Wisconsin Works employment position may be operated so as to do any of the following:
Have the effect of filling a vacancy created by an employer terminating a regular employee or otherwise reducing its work force for the purpose of hiring a W-2 participant.
Fill a position when any other person is on layoff or strike from the same or a substantially equivalent job within the same organizational unit.
Fill a position when any other person is engaged in a labor dispute regarding the same or a substantially equivalent job within the same organizational unit.
Section 49.141 (5) (bm), Stats., as created by 2003 Wisconsin Act 173, directs the Department to promulgate rules specifying a grievance procedure for resolving complaints of alleged violations of the nondisplacement provisions.
Summary of the proposed changes. The current rule requires employers to provide a grievance procedure for regular employees to resolve complaints of employment displacement by a W-2 participant. The proposed rule provides that employers shall comply with the procedure developed by the Department.
The proposed rule requires each W-2 agency to designate staff responsible for receiving, investigating, and resolving complaints of violations of the nondisplacement provisions or maintain an agreement with a department grantee or contractor in the same locality to receive, investigate, and resolve such complaints. Each W-2 work training provider or employer of a participant in a W-2 employment position shall inform its employees of the right to file a complaint and provide information about how to obtain further information on the grievance procedure.
An employee, former employee, or employee's representative may file a written complaint with the W-2 agency or its designee that alleges facts that may constitute a violation of the nondisplacement provisions. The complaint must be filed within one year from the date of the alleged violation. Upon receipt of a complaint alleging a violation of the nondisplacement provisions, the W-2 agency or its designee shall investigate the complaint and assist the parties in attempting to reach an informal resolution to the complaint. If an informal resolution cannot be reached, the W-2 agency or its designee shall conduct a hearing within 30 calendar days from the date the complaint was filed. The W-2 agency or its designee shall issue a hearing decision to the parties within 60 calendar days from the date the complaint was filed.
A party may file a request for a department review within 10 days of receiving an adverse decision from the W-2 agency or its designee or within 15 days from the date the decision was due if the parties did not receive a decision. The review shall be conducted by the administrator of the department's division of workforce solutions. The department's final decision shall be issued within 30 calendar days from the date the request for departmental review was filed.
A W-2 employer or work training provider who is found to have violated any of the nondisplacement provisions may be subject to termination of existing W-2 or other work training agreements with the department or its contractors, termination of grants from the department or its contractors and disqualification for future grants, and disqualification for future work training agreements with the department or its contractors.
No employer or W-2 work training provider may retaliate against an employee, employee's representative, or witness who initiates or participates in the grievance procedure.
Summary of analytical methodology used to develop the proposed rule. The grievance procedure adopted for employment displacement by W-2 participants is similar to the grievance procedure that the Department developed for complaints of employment displacement by participants in employment and training programs funded by grants under the federal Workforce Investment Act (WIA) and Welfare to Work. (The Welfare to Work program no longer exists.)
The grievance procedure was developed to comply with federal WIA and Welfare to Work regulations at 20 CFR 667.600 and 20 CFR 645.270. The preamble to the TANF regulations recommends that states use one set of grievance procedures for the TANF and Welfare to Work programs, 64 Federal Register 17797 (April 12, 1999). Although the Welfare to Work program no longer exists, the proposed rule allows for a common grievance procedure and a common complaint coordinator for complaints of employment displacement by participants in employment and training programs funded by grants under WIA and W-2.
Comparison with rules in adjacent states. Iowa. A complaint must be filed within one year with the program contractee. The contractee attempts to reach an informal resolution of the complaint. If informal resolution is not possible, a complainant may file a written appeal with the Department. The appeal procedures generally used for Department disputes are followed.
Illinois. A complaint may be filed with the Department. The Department holds an in-person conference to receive documents and statements and issues a decision.
Michigan. All complaints utilizing Michigan Department of Career Development/Office of Workforce Development funding sources follow the same complaint procedure. The complaint procedure is found in the WIA state plan.
Local agencies must make provisions for informal means to resolve complaints before they become grievances. If there is no informal resolution, the local agency conducts a hearing and issues a decision no later than 60 days from the date the grievance was filed. A grievance may be appealed to the Department and the Department may conduct a hearing. A decision is issued no later than 30 days after the filing of the appeal.
Minnesota. Minnesota has a state statute that applies to nondisplacement in union workplaces. They do not appear to have developed a grievance procedure that applies to all workplaces with a TANF-subsidized individual.
Anticipated costs incurred by private sector. There will be no significant fiscal effect on the private sector.
Effect on small business. The rule will affect privately-run W-2 agencies and small businesses that have a W-2 participant at their work site. The rule will not have a significant economic impact on a substantial number of small businesses.
Analysis and supporting documentation used to determine effect on small business. The rule merely outlines a procedure for resolving complaints. The grievance procedure is not expected to be used often.
Contact
The proposed rules are available at the web site http://adminrules.wisconsin.gov by typing "grievance procedure" in the search engine. This site allows you to view documents associated with this rule's promulgation, register to receive email notification whenever the Department posts new information about this rulemaking order, and submit comments and view comments by others during the public comment period. You may receive a paper copy of the rule by contacting:
Elaine Pridgen
Office of Legal Counsel
Dept. of Workforce Development
201 E. Washington Avenue
P.O. Box 7946
Madison, WI 53707-7946
(608) 267-9403
Written Comments
Written comments on the proposed rules received at the above address or through the http://adminrules.wisconsin.gov web site no later than August 17, 2004, will be given the same consideration as testimony presented at the hearing.
Small Business Regulatory Coordinator
Hal Bergan
(608) 266-8533
Notice of Hearing
Workforce Development
NOTICE IS HEREBY GIVEN that pursuant to Sections 66.0903, 103.005 (1), 103.49, and 227.11, Stats., the Department of Workforce Development proposes to hold a public hearing to consider rules relating to the prevailing wage rates on public works projects and affecting small business.
Hearing Information
Tuesday, August 17, 2004 at 1:30 p.m.
GEF 1 Building, Room B103
201 E. Washington Avenue
Madison
Interested persons are invited to appear at a hearing and will be afforded the opportunity to make an oral presentation of their positions. Persons making oral presentations are requested to submit their facts, views, and suggested rewording in writing.
Visitors to the GEF 1 building are requested to enter through the left East Washington Avenue door and register with the customer service desk. The entrance is accessible via a ramp from the corner of Webster Street and East Washington Avenue. If you have special needs or circumstances that may make communication or accessibility difficult at the hearing, please call (608) 267-9403 at least 10 days prior to the hearing date. Accommodations such as ASL interpreters, English translators, or materials in audiotape format will be made available on request to the fullest extent possible.
Analysis Prepared by the Department of Workforce Development
Statutory authority: Sections 66.0903, 103.005 (1), 103.49, and 227.11, Stats.
Statutes interpreted: Sections 66.0903 (1) (g) and 103.49 (1) (d), Stats.
Explanation of agency authority. The Department of Workforce Development administers the statutory requirements that the prevailing wage rate must be paid for covered employees in a trade or occupation engaged in erection, construction, remodeling, repairing, or demolition on a state or local public works project.
Sections 66.0903 (1) (g) and 103.49 (1) (d), Stats., delineate how the Department determines the prevailing wage rate for a trade or occupation on a public works project. First, a survey is done to collect data on the hourly wage rates and hourly fringe equivalent rates for a trade or occupation in that area. If there is a majority of hours worked at a particular wage rate plus fringe equivalent rate, those rates become the prevailing wage rate for that trade. If there is no rate at which a majority of the hours worked in that trade is paid, a weighted average methodology applies based on the pay of the highest-paid 51% of hours worked in that trade or occupation on projects in that area.
Summary of the proposed changes. The statutory language on determining prevailing wage rates was enacted in 1995 Wisconsin Act 215. Since that time, the Department has had an informal policy of looking at the hourly wage rate and hourly fringe equivalent rate as separate figures and requiring an exact match of both the hourly rate of pay and the hourly fringe equivalent rate in determining whether there is a majority of hours worked in a trade or occupation at a particular rate.
The Department's policy of requiring an exact match of both the hourly wage rate and the hourly fringe equivalent rate has resulted in situations that do not seem to comply with the intent of the prevailing wage law. For example, if a collective bargaining agreement is renegotiated and the hourly wage rate is reduced to cover the increased cost of health insurance in the fringe equivalent, the hours worked under the two different agreements will be considered as hours worked at different rates even though the total economic benefit and liability is the same. Counting the rates under the original and renegotiated collective bargaining agreements with the same total economic benefit and liability as different rates means that the union rates may not be selected as the prevailing wage rates even if a majority of hours worked in a trade were by union workers.
Section DWD 290.015 (3) provides that if the rates in a collective bargaining agreement are found to prevail for a particular trade in a particular area, any future increases or decreases in the collective bargaining agreement are to be included in the prevailing wage rate determinations. The proposed rule will make it less likely that a renegotiated collective bargaining agreement with the same total economic benefit and liability will negatively affect whether future increases or decreases under the collective bargaining agreement are incorporated in prevailing wage determinations. If the majority of hours worked in that trade in that area are by union workers, the future increases or decreases in the union contract will be reflected in the prevailing wage rates for that trade.
Under the proposed rule, the Department would determine whether there is a majority of hours reported that receive a total economic benefit that is the sum of the hourly rate of pay and hourly fringe equivalent. If there is a majority of hours worked at the rate that is that sum and there is more than one combination of hourly rates of pay plus hourly fringe equivalent rates that equal that sum, the prevailing wage rate will be the most commonly reported hourly basic rate of pay and corresponding hourly fringe equivalent rate that resulted in that sum.
Summary of analytical methodology used to develop the proposed rule. The statutory language that directs the Department to consider the "hourly basic rate of pay, plus the hourly contribution for health insurance benefits, vacation benefits, pension benefits and any other bona fide economic benefits paid directly or indirectly, for a majority of the hours worked in the trade" could be interpreted to require either an exact match of the hourly wage rate and the hourly fringe equivalent rate as separate figures or a match of the hourly wage rate and fringe equivalent rate as a combined rate that is the sum of the two rates. The Department has determined that the method of using the sum of the hourly wage rate and the hourly fringe equivalent more closely complies with statutory intent.
Federal law. There are no federal prevailing wage rate regulations that apply to state or local public works projects. The federal prevailing wage regulations that apply to federally-funded public works projects determine the prevailing hourly rate of pay and the prevailing fringe equivalent as completely separate inquiries. Under the federal system, the resulting combination of the hourly rate of pay and fringe equivalent issued by the U.S. Department of Labor may result in a combination of hourly pay and fringe equivalent that is not the most commonly paid total economic benefit on private projects.
Comparison with rules in adjacent states. Iowa. No prevailing wage law.
Minnesota. The prevailing hourly wage rate is set at the most commonly paid hourly wage rate. The fringe equivalent rate is set at the most commonly paid rate at that hourly wage rate.
Michigan. The prevailing wage rates are the collective bargaining agreement rates.
Illinois. Only employers who do work on public works projects are surveyed. The prevailing rates are the most commonly paid wage rates and the corresponding fringe equivalent rates.
Anticipated costs incurred by private sector. There will be no significant fiscal effect on the private sector.
Effect on small business. The proposed rule will affect small business as defined in s. 227.114 (1), Stats., but the rule will not have a significant economic impact on a substantial number of small businesses.
Analysis and supporting documentation used to determine effect on small business. Small businesses will have increased flexibility to offer "cafeteria-style" benefit plans to their employees and have their wage rates selected as the prevailing wage.
The proposed rules are available at the web site http://adminrules.wisconsin.gov by typing "prevailing wage" in the search engine. This site allows you to view documents associated with this rule's promulgation, register to receive email notification whenever the Department posts new information about this rulemaking order, and submit comments and view comments by others during the public comment period. You may receive a paper copy of the rule by contacting:
Elaine Pridgen
Office of Legal Counsel
Dept. of Workforce Development
201 E. Washington Avenue
P.O. Box 7946
Madison, WI 53707-7946
(608) 267-9403
Written Comments
Written comments on the proposed rules received at the above address or through the http://adminrules.wisconsin.gov web site no later than August 18, 2004, will be given the same consideration as testimony presented at the hearing.
Small Business Regulatory Coordinator
Hal Bergan
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