LRB-3723/2
GMM:skg:mkd
1995 - 1996 LEGISLATURE
October 26, 1995 - Introduced by
Committee on Labor and Employment, by
request of Departmet of Industry, Labor and Human Relations. Referred to
Committee on Labor and Employment.
AB632,2,2
1An Act to repeal 66.293 (2), 66.293 (3) (b) and 103.49 (4);
to renumber and
2amend 66.293 (3) (intro.), 66.293 (3) (a), 66.293 (3) (c), 66.293 (3) (d), 66.293 (3)
3(e), 66.293 (3) (f), 66.293 (3) (g), 66.293 (3) (h), 66.293 (3) (i), 66.293 (3) (j), 66.293
4(3) (k), 66.293 (3) (m), 66.293 (3) (n), 103.49 (1) (c), 103.49 (3), 103.49 (5) and
5103.49 (6);
to amend 103.49 (1) (a), 103.49 (1) (b), 103.49 (1) (d), 103.49 (2),
6103.49 (7) (a), 103.49 (7) (b), 103.49 (7) (d), 103.50 (1) (a), 103.50 (1) (b), 103.50
7(1) (c), 103.50 (1) (d), 103.50 (2), 103.50 (3) (a), 103.50 (4), 103.50 (5), 103.50 (6),
8103.50 (7) (a), 103.50 (7) (b), 103.50 (7) (c), 103.50 (8), 227.01 (13) (t), 946.15 (1)
9and 946.15 (2);
to repeal and recreate 66.293 (1), 66.293 (5), 103.49 (3g) and
10103.50 (3) (b); and
to create 66.293 (3) (title), 66.293 (3) (br), 66.293 (3) (cm),
1166.293 (4), 66.293 (7), 66.293 (9) (title), 66.293 (10) (title), 66.293 (11) (title),
1266.293 (11) (b), 103.49 (1) (title), 103.49 (1) (c) 1. to 8., 103.49 (1) (e), 103.49 (1)
13(f), 103.49 (2m), 103.49 (3) (title), 103.49 (3) (b), 103.49 (3) (c), 103.49 (3) (d),
14103.49 (3r), 103.49 (4r), 103.49 (5) (title), 103.49 (5) (a), 103.49 (5) (c), 103.49
15(6m), 103.49 (7) (title), 103.50 (1) (e), 103.50 (2m), 103.50 (3) (c), 103.50 (3g),
16103.50 (7) (d) and (e), 946.15 (3) and 946.15 (4) of the statutes;
relating to:
1prevailing wage rates and hours of labor for workers employed on state or local
2public works projects and providing penalties.
Analysis by the Legislative Reference Bureau
Under current law, contracts to perform construction work on state or local
public works projects, that is, state or local building projects, local street projects or
state highway projects, are governed by provisions regarding prevailing wage rates
and hours of labor. In general, those provisions require contractors and
subcontractors performing work on a project to pay their employes working on the
project the prevailing wage rate in the area from which labor for the project would
normally be secured for the employe's trade or occupation and to pay those employes
overtime pay, that is, 1.5 times the employe's usual hourly basic rate of pay, for all
hours worked in excess of the prevailing hours of labor. This bill makes various
changes to the prevailing wage and hours law as follows:
Determination of prevailing wages and hours
Under current law, a state agency or local governmental unit, before entering
into a contract for a project of public works, other than a local street project, and the
department of transportation (DOT), before entering into a contract for a state
highway project, must request the department of industry, labor and human
relations (DILHR) to determine the prevailing wage rate and prevailing hours of
labor for each trade or occupation in the area from which labor for the project would
normally be secured, except that DILHR may exempt a local governmental unit from
requesting a determination if the local governmental unit adopts standards that are
at least as high as those under the prevailing wage and hours law. Currently, a local
governmental unit determines the prevailing wage rates for a local street project.
This bill eliminates the responsibility of a local governmental unit to determine the
prevailing wage rates for a local street project and instead requires a local
government unit to request DILHR to determine the prevailing wage rates and hours
of labor in the area of the proposed project for those trades or occupations that are
commonly employed in the highway construction industry.
Under current law, the prevailing wage rate for a trade or occupation that is
employed on a state or local building project is the wage, plus fringe benefits, paid
to the majority of the persons working in that trade or occupation in the area from
which labor for the project is normally secured or, if there is no rate at which a
majority of the persons working in that trade or occupation in the area are paid, the
prevailing wage rate is the rate paid to the largest number of individuals working
in that trade or occupation in the area. Currently, the prevailing wage rate for a trade
or occupation that is employed on a state highway project is the wage, plus fringe
benefits, paid to the largest number of persons engaged in the same class of labor in
the area from which labor for the project is secured. Currently, DILHR also
determines truck rental rates for persons who own and operate their own trucks
when working on a state highway project.
This bill eliminates truck rental rates and provides instead that a truck driver,
including the owner-operator of a truck, must be paid at a prevailing wage rate that
is determined by DILHR in the same manner as prevailing wage rates are
determined for workers in other trades or occupations. The bill also provides one
uniform method of determining prevailing wage rates for persons employed on all
state and local public works projects. Under the bill, the prevailing wage rate for a
trade or occupation that is employed on a state or local building project is the wage,
plus fringe benefits, paid for a majority of the hours worked in that trade or
occupation on building projects in the county in which the proposed project is located
and in the counties contiguous to that county that are not subject to the prevailing
wage law (private sector projects) or, if there is no rate at which a majority of the
hours worked in the trade or occupation on private sector projects in those counties
is paid, the prevailing wage rate is the average hourly wage, weighted by the number
of hours worked, plus the average hourly fringe benefits, weighted by the number of
hours worked, paid to all persons employed in the trade or occupation on private
sector projects in those counties. For local street projects and state highway projects,
the bill provides that wages, plus fringe benefits, paid for hours worked on public
sector projects, as well as private sector projects, are also considered in determining
the prevailing wage rate.
Under current law, the prevailing hours of labor for a trade or occupation in an
area are the hours per day and per week worked within the area from which labor
for a project would normally be secured by a larger number of persons than are
employed in the trade or occupation for any other number of hours per day and per
week, except that the prevailing hours of labor for any trade or occupation may not
exceed 8 hours per day and 40 hours per week. This bill eliminates the prevailing
hours of labor per day, but retains the prevailing hours of labor per week and specifies
that the prevailing hours of labor may not include any hours worked on a Sunday or
holiday so that, for example, if a person's normal work week consists of 4 10-hour
days, the person need not be paid overtime pay for the 9th and 10th hours worked
each day. Instead the person must be paid overtime pay only for the hours worked
in excess of 40 in a week and any hours worked on a Sunday or holiday.
Under current law, when a local governmental unit or state agency requests
DILHR to determine the prevailing wage rates and prevailing hours of labor for a
proposed public works project, DILHR must make that determination within 30 days
after the request. Current law also provides a procedure for local building projects
under which any person may request a review of DILHR's determination if the
person submits evidence showing that DILHR's determination does not represent
the actual prevailing wage rate or prevailing hours of labor for a trade or occupation
in the area of the proposed project. Current law, however, does not provide a similar
review procedure for state building projects. This bill permits any person to request
a review of a determination by DILHR of the prevailing wage rates or hours of labor
for a state building project along the same lines that a person may request such a
review under current law for a local building project. The bill also permits a local
governmental unit or state agency to request a review of a determination by DILHR
of the prevailing wage rates or hours of labor for a proposed public works project if
the local governmental unit or state agency submits evidence, including wage rate
or hours of labor information on at least 3 similar projects located in the city, village
or town in which the proposed project is located, showing that DILHR's
determination does not represent the prevailing wage rate or hours of labor in that
city, village or town. If DILHR modifies its determination, then the prevailing wage
rate or prevailing hours of labor is the prevailing wage rate or prevailing hours of
labor in the city, village or town, rather than in the county and contiguous counties.
Under current law, DOT may appeal to the governor if it considers any portion
of DILHR's determination of the prevailing wage rates or hours of labor for a state
highway project to be incorrect. This bill permits a local governmental unit or a state
agency other than DOT that believes that payment of any prevailing wage rate
determined by DILHR for a project would pose a dire financial hardship to the local
governmental unit or state agency to petition the secretary of industry, labor and
human relations to reduce that prevailing wage rate for the project. If the secretary
finds that payment of that prevailing wage rate would pose a dire financial hardship,
the secretary may reduce that rate by not more than 20%.
Finally, with respect to the determination of prevailing wage rates and hours
of labor, under current law, information relating to wages and hours submitted to
DILHR by contractors, subcontractors and agents for the purpose of assisting
DILHR in determining prevailing wage rates and hours of labor for a project are
subject to inspection and copying by the public under the open records law. This bill
requires DILHR to withhold from inspection and copying under the open records law
all personally identifiable information submitted to DILHR by contractors,
subcontractors and agents for the purpose of assisting DILHR in determining
prevailing wage rates and hours of labor.
Employes and projects covered
Under current law, contractors, subcontractors and agents performing work on
a state or local public works project must pay to employes working on the site of the
project the prevailing wage rate plus overtime pay for all hours worked in excess of
the prevailing hours of labor. Currently, employes engaged in the processing,
manufacture or delivery of materials or products by or for commercial
establishments that have a fixed place of business from which they regularly supply
those materials or products are not covered under the prevailing wage and hours law,
except that employes who deliver mineral aggregate, such as sand, gravel and stone,
to the site of the project and deposit the mineral aggregate substantially in place are
covered under the prevailing wage and hours law.
This bill further clarifies which employes are covered under the prevailing
wage and hours law. Under the bill, in addition to the employes specifically covered
under current law, employes are also covered for all time spent in transporting
material or spoil from the site of a project and returning to the project and employes
who are engaged in manufacturing or furnishing materials, articles, supplies or
equipment on the site of a project or from a facility dedicated exclusively, or nearly
so, to a project are covered under the prevailing wage and hours of labor law.
The bill also specifies that a volunteer working on a state or local building
project or on a local highway project is not covered under the prevailing wage and
hours of labor law.
Current law provides a threshold below which the prevailing wage and hours
law does not apply to a state or local building project. Currently, the prevailing wage
and hours law does not apply to a project involving a single trade if the estimated cost
of completion of the project is below $11,000 or to a project involving multiple trades
if the estimated cost of completion of the project is below $110,000. Those figures are
adjusted by DILHR every 2 years in proportion to changes in the cost of construction.
This bill eliminates the single-trade threshold and raises the multiple-trade
threshold to $150,000 effective on the publication of the bill and to $200,000 effective
on January 1, 1999, with DILHR to begin adjusting that amount every 2 years, but
no sooner than January 1, 2001.
Under current law, state and local public works projects that receive $2,000 or
more in federal funding are subject to a federal prevailing wage and hours law known
as the Davis-Bacon act. This bill exempts from coverage under the state prevailing
wage and hours law projects that are covered under the Davis-Bacon act.
Finally, with respect to coverage of employes and projects, contracts currently
made by a state agency for the erection, construction, remodeling or repairing of a
public building are subject to the prevailing wage and hours law. This bill specifies
that contracts made by state agencies for the demolition of a public building are also
covered by that law.
Administration and enforcement
Under current law, the prevailing wage rates and prevailing hours of labor
determined by a local governmental unit or DILHR for a local public works project
must be incorporated into and made a part of any contract for that project. Currently,
the prevailing wage rates and prevailing hours of labor determined by DILHR for a
state public works project must be specifically set forth in the proposal and contract
for that project. This bill requires the prevailing wage rates and hours of labor for
all state and local public works projects to be physically incorporated into and made
a part of any proposal, contract and subcontract for that project.
Under current law, DILHR, on the request of any person, must inspect the
payroll records of a contractor, subcontractor or agent performing work on a local
building project to ensure compliance with the prevailing wage and hours law. If the
contractor, subcontractor or agent who is subject to the inspection is found to be in
compliance, the person requesting the inspection must pay for the cost of the
inspection. Current law, however, does not require DILHR to make a similar
inspection of the payroll records of a contractor, subcontractor or agent performing
work on a state building project. This bill requires DILHR, on the request of any
person, to inspect the payroll records of a contractor, subcontractor or agent
performing work on a state building project to ensure compliance with the prevailing
wage and hours law. Under the bill, if the contractor, subcontractor or agent who is
subject to the inspection is found to be in compliance and if the person making the
request is a covered employe, DILHR must charge that person the actual cost of the
inspection. If the contractor, subcontractor or agent who is subject to the inspection
is found to be in compliance and if the person making the request is not a covered
employe, DILHR must charge that person $250 or the actual cost of the inspection,
whichever is greater.
Under current law, before a local governmental unit may authorize final
payment for a public works project, each contractor performing work on the project
must file with the local governmental unit an affidavit stating that the contractor has
complied with the prevailing wage and hour law and that the contractor has received
evidence of compliance from each of the contractor's agents and subcontractors.
Current law, however, does not require a contractor performing work on a state
building project to file a similar affidavit before the state agency contracting for the
work may authorize final payment. This bill requires agents and subcontractors who
have performed work on a state or local public works project to file with the
contractor an affidavit stating that the agent or subcontractor has complied with the
prevailing wage and hours law before the contractor may authorize final payment
to the agent or subcontractor. The bill also requires a contractor who has performed
work on a state or local public works project to file with the local governmental unit
or state agency contracting for the work an affidavit stating that the contractor has
complied with the prevailing wage and hours law and has received affidavits of
compliance from each of his or her agents and subcontractors. The local
governmental unit or state agency may not authorize final payment until the
contractor's affidavit has been filed in proper form and order. If a local governmental
unit or state agency authorizes final payment before the contractor's affidavit has
been filed in proper form and order or if DILHR determines that any employe covered
by the prevailing wage and hours law has not or may not have been paid the
prevailing wage rate or overtime pay for all hours worked in excess of the prevailing
hours of labor, the local governmental unit or state agency is liable for all back wages
owed to the employe up to the amount of the final payment.
Penalties
Current law provides for a variety of penalties that may be imposed for a
violation of the prevailing wage and hours law. Currently, a contractor who does not
pay the wage scale set by a local governmental unit for a local street project may be
fined not more than $500 per offense. Currently, a contractor who does not pay the
prevailing wage rate or overtime pay for all hours worked in excess of the prevailing
hours of labor on a local building project is liable for the amount of back wages owed
plus an equal amount as liquidated damages. Currently, a state officer or employe
who executes a contract for a state building project without complying with the
prevailing wage and hours law, and a contractor, subcontractor or agent who does not
pay the prevailing wage rate or overtime pay for all hours worked in excess of the
prevailing hours of labor on a state building project, may be fined not more than $200
or imprisoned for not more than 6 months, or both, with each day counting as a
separate offense. Currently, a contractor, subcontractor or agent performing work
on a state highway project who violates the prevailing wage and hours law may be
fined not less than $50 nor more than $200 or imprisoned for not more than 18
months, or both, with each day counting as a separate offense. This bill eliminates
the liability of a state employe or officer who executes a contract for a state building
project without complying with the prevailing wage and hours law. The bill also
standardizes the penalties for a contractor, subcontractor or agent performing work
on a state or local public works project who violates the prevailing wage and hours
law at a fine of not more than $200 or imprisonment for not more than 6 months, or
both, with each day counting as a separate offense.
Finally, in addition to penalties for failure to pay the prevailing wage or to pay
overtime pay for all hours worked in excess of the prevailing hours of labor, current
law also prohibits an employer from inducing an employe employed on a local public
works project to give up, waive or return any part of the compensation to which the
employe is entitled under DILHR's prevailing wage determine (commonly known as
a "kickback"). Current law, however, does not prohibit employers performing work
on state public works from inducing employes on those projects to pay kickbacks.
This bill extends the coverage of the kickback prohibition to employers performing
work on state public works projects. The bill also specifically prohibits 2 other types
of kickbacks as follows: 1) reducing the hourly basic rate of pay normally paid to an
employe for work done on a nonpublic works project during a week in which the
employe works both on a public works project and a nonpublic works project; and 2)
inducing an employe to permit any part of the wages to which the employe is entitled
for work done on a project that is subject to the prevailing wage law to be deducted
from his or her pay and deposited with a labor organization for the purpose of
subsidizing bids on other projects (commonly referred to as "targeting").
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB632, s. 1
1Section
1. 66.293 (1) of the statutes is repealed and recreated to read:
AB632,7,22
66.293
(1) Definitions. In this section:
AB632,7,63
(a) "Area" means the county in which a proposed project that is subject to this
4section is located and those counties that are contiguous to that county or, if the
5department modifies a wage determination under sub. (3) (br), "area" means the city,
6village or town in which a proposed project that is subject to this section is located.
AB632,7,87
(b) "Department" means the department of industry, labor and human
8relations.
AB632,7,99
(c) "Hourly basic rate of pay" has the meaning given in s. 103.49 (1) (b).
AB632,8,4
1(d) "Local governmental unit" means a political subdivision of this state, a
2special purpose district in this state, an instrumentality or corporation of such a
3political subdivision or special purpose district, a combination or subunit of any of
4the foregoing or an instrumentality of the state and any of the foregoing.
AB632,8,55
(e) "Prevailing hours of labor" has the meaning given in s. 103.49 (1) (c).
AB632,8,226
(f) 1. "Prevailing wage rate" for any trade or occupation engaged on any project
7of public works, except highway, street or bridge construction, in any area means the
8hourly basic rate of pay, plus the hourly contribution for health insurance benefits,
9vacation benefits, pension benefits and any other bona fide economic benefit, paid
10directly or indirectly, for a majority of the hours worked in the trade or occupation
11on projects, except highway, street or bridge construction, in the area that are not
12subject to this section, or if there is no rate at which a majority of the hours worked
13in the trade or occupation on projects, except highway, street or bridge construction,
14in the area that are not subject to this section is paid, then the prevailing wage rate
15for any trade or occupation engaged on any project of public works, except highway,
16street or bridge construction, in any area shall be the average hourly basic rate of pay,
17weighted by the number of hours worked, plus the average hourly contribution,
18weighted by the number of hours worked, for health insurance benefits, vacation
19benefits, pension benefits and any other bona fide economic benefit, paid directly or
20indirectly to all persons employed in that trade or occupation on projects, except
21highway, street or bridge construction, in that area that are not subject to this
22section.
AB632,9,1023
2. "Prevailing wage rate" for any trade or occupation in any area engaged on
24any project of highway, street or bridge construction means the hourly basic rate of
25pay, plus the hourly contribution for health insurance benefits, vacation benefits,
1pension benefits and any other bona fide economic benefit, paid directly or indirectly,
2for a majority of the hours worked in the trade or occupation in the area, or if there
3is no rate at which a majority of the hours worked in the trade or occupation in the
4area is paid, then the prevailing wage rate for any trade or occupation engaged on
5any project of highway, street or bridge construction in any area shall be the average
6hourly basic rate of pay, weighted by the number of hours worked, plus the average
7hourly contribution, weighted by the number of hours worked, for health insurance
8benefits, vacation benefits, pension benefits and any other bona fide economic
9benefit, paid directly or indirectly to all persons employed in that trade or occupation
10in that area.
AB632,9,1111
(g) "Secretary" means the secretary of industry, labor and human relations.
AB632,9,1212
(h) "Truck driver" has the meaning given in s. 103.49 (1) (f).
AB632, s. 2
13Section
2. 66.293 (2) of the statutes is repealed.
AB632, s. 3
14Section
3. 66.293 (3) (title) of the statutes is created to read:
AB632,9,1515
66.293
(3) (title)
Prevailing wage rates and hours of labor.
AB632, s. 4
16Section
4. 66.293 (3) (intro.) of the statutes is renumbered 66.293 (3) (am) and
17amended to read:
AB632,9,2518
66.293
(3) (am) Every
municipality
local governmental unit, before making a
19contract by direct negotiation or soliciting bids on a contract, for any project of public
20works
except, including highway, street or bridge construction, shall apply to the
21department
of industry, labor and human relations to ascertain to determine the
22prevailing wage rate
, and prevailing hours of labor
and hourly basic pay rates in all
23trades and occupations for each trade or occupation required in the work
24contemplated. The department shall determine the prevailing wage rate
, and
25prevailing hours of labor
and hourly basic pay rates for each trade or occupation
1under s. 103.49, make its determination within 30 days after receiving the request
2and file the same with the
municipality local governmental unit applying therefor.
AB632,10,15
3(bm) A Any person may request
for the a review of
any portion of a wage
4determination
may be made within 30 days
from after the determination date if
the
5person submits evidence
is submitted with the request showing that the
prevailing 6wage rate or
prevailing hours of labor for any given trade or occupation included in
7the determination does not represent the prevailing wage rate or
prevailing hours
8of labor for that trade or occupation in the area
where the proposed project is located.
9Such evidence shall include wage rate and hours of labor information for the
10contested trade or occupation on at least one similar project located in the
11municipality area where the proposed project is located and on which some work has
12been performed
during the current or any of within the previous 12 months. The
13department shall affirm or modify the original determination within 15 days
from 14after the date on which the department receives the request for review.
Reference
15to such
AB632,11,6
16(dm) The prevailing wage rates and
prevailing hours of labor determined by
17the department or a
municipality local governmental unit exempted under
par. (d) 18sub. (6) shall be published in the notice issued for the purpose of securing bids for the
19project. If any contract
or subcontract for a project of public works
except, including 20highway, street or bridge construction
, is entered into, the
prevailing wage rates and
21prevailing hours
of labor determined by the department or exempted
municipality 22local governmental unit shall be
physically incorporated into and made a part of the
23contract
or subcontract and may not be changed during the time that the contract
24or subcontract is in force. No
laborer, worker or mechanic employed directly upon
25the site of the project by the contractor or by a subcontractor, agent or other person,
1doing or contracting to do any part of the work, person described in sub. (4) may be
2paid less than the prevailing wage rate in the same or most similar trade or
3occupation; nor may he or she be permitted to work a greater number of hours
per
4day or per calendar week than the prevailing hours of labor determined under this
5subsection, unless he or she is paid for all hours
worked in excess of the prevailing
6hours
of labor at a rate of at least
1-1/2 1.5 times his or her hourly basic rate of pay.
AB632, s. 5
7Section
5. 66.293 (3) (a) of the statutes is renumbered 66.293 (11) (a) and
8amended to read:
AB632,11,239
66.293
(11) (a) Any contractor, subcontractor or agent thereof, who fails to pay
10the prevailing
wage rate
of wages determined by the department under
this
11subsection or sub. (3) or who pays less than
1-1/2 1.5 times the hourly basic rate of
12pay for
all hours worked
on the project in excess of the prevailing hours
of labor 13determined under
this subsection sub. (3), shall be liable to
the employes any affected
14employe in the amount of
their his or her unpaid
minimum wages or
their his or her 15unpaid overtime compensation and
in an additional equal amount as liquidated
16damages.
Action An action to recover the liability may be maintained in any court
17of competent jurisdiction by any
one or more employes
employe for and in behalf of
18that employe
or those employes and other employes similarly situated. No employe
19shall may be a party plaintiff to any such action unless the employe consents in
20writing to become such a party and the consent is filed in the court in which the action
21is brought.
The Notwithstanding s. 814.04 (1), the court shall, in addition to any
22judgment awarded to the plaintiff, allow
a reasonable
attorney's fee attorney fees 23and costs to be paid by the defendant.
AB632, s. 6
24Section
6. 66.293 (3) (b) of the statutes is repealed.
AB632, s. 7
25Section
7. 66.293 (3) (br) of the statutes is created to read: