Amendment ASA1-AB32

MED&GMM:cjs&kjf

2015 - 2016 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO ASSEMBLY BILL 32

July 6, 2015 - Offered by Representative Hutton.

AB32-ASA1,2,9 An Act to repeal 66.0903 (1) (a), (am), (b), (cm), (dr), (em), (hm) and (im), 66.0903 (1m) (a) 1. to 3., 66.0903 (2) to (12), 103.49 (title), 103.49 (1) (a), (bg) and (d), 103.49 (3), (4r) and (5), 103.49 (6m) (f), 103.49 (7), 103.50 (title) and (1), 103.50 (3) to (5), 103.50 (7) (f), 104.001 (3) (a), 227.01 (13) (t), 229.682 (2) and 229.8275; to renumber 103.49 (1) (intro.), (am), (b), (bj), (br), (c), (em), (f), (fm) and (g), (1m) and (3g), 103.49 (6m) (title) and 103.49 (6m) (b) to (e); to renumber and amend 66.0903 (1m) (a) (intro.), 103.49 (2), 103.49 (2m), 103.49 (6m) (ag), 103.49 (6m) (am), 103.50 (2), 103.50 (2g), 103.50 (2m), 103.50 (6), 103.50 (7) (title) and (a) to (e) and 103.50 (8); to consolidate, renumber and amend 104.001 (3) (intro.) and (b); to amend 19.36 (12), 66.0129 (5), 66.0903 (1) (c), 66.0903 (1) (f), 66.0903 (1) (j), 66.0903 (1m) (b), 84.41 (3), 103.005 (12) (a), 103.503 (1) (a), 103.503 (1) (c), 103.503 (1) (e), 103.503 (1) (g), 103.503 (2), 103.503 (3) (a) 2., 106.04 (1) (d), 109.09 (1), 111.322 (2m) (a), 111.322 (2m) (b), 111.322 (2m) (c), 946.15 (1), 946.15 (2), 946.15 (3), 946.15 (4) and 978.05 (6) (a); to repeal and recreate 66.0903 (title) and 66.0903 (1) (g); and to create 16.856 and 84.062 of the statutes; relating to: elimination of the requirement that laborers, workers, mechanics, and truck drivers employed on the site of a local project of public works be paid the prevailing wage, enforcement and administration of the prevailing wage laws, calculation of the prevailing wage rate, persons covered under the prevailing wage law, remedies available for a violation of the prevailing wage law, providing an exemption from emergency rule procedures, and granting rule-making authority.

Analysis by the Legislative Reference Bureau

This substitute amendment: 1) repeals the prevailing wage law that applies to local projects of public works; 2) requires the use of federally determined prevailing wage rates on state projects of public works, instead of rates determined by the Department of Workforce Development (DWD); 3) transfers much of DWD's existing role in enforcing and administering the prevailing wage law to the Department of Administration (DOA); 4) eliminates various statutory provisions with respect to the enforcement and administration of the prevailing wage law for state projects other than state highway projects and provides DOA with rule-making authority to enforce and administer the prevailing wage law for those state projects; 5) excludes certain persons from coverage under the prevailing wage law; 6) restricts the remedies that are available for a violation of the prevailing wage law; and 7) makes certain other changes regarding enforcement of the prevailing wage law.

Applicability of the prevailing wage law

Under the current prevailing wage law, laborers, workers, mechanics, and truck drivers employed on the site of certain state and local projects of public works (generally single-trade projects whose estimated cost of completion is $48,000 or more and multiple-trade projects whose estimated cost of completion is $100,000 or more) 1) must be paid at the rate paid for a majority of the hours worked in the person's trade or occupation in the area in which the project is located, as determined by DWD; and 2) may not be required or permitted to work a greater number of hours per day and per week than the prevailing hours of labor, which is no more than 10 hours per day and 40 hours per week, unless they are paid 1.5 times their basic rate of pay (commonly referred to as overtime pay) for all hours worked in excess of the prevailing hours of labor. Also under current law, no local government may enact or administer a prevailing wage law ordinance or any similar ordinance.

This substitute amendment eliminates the prevailing wage law with respect to projects of public works undertaken by local governmental units, but retains the prohibition against local governmental units enacting or administering their own prevailing wage laws or similar ordinances.

Determination of prevailing wage rate; enforcement and administration of prevailing wage law

Under current law, the prevailing wage rate is defined as the hourly basic rate of pay, plus the hourly contribution for bona fide economic benefits, paid for a majority of the hours worked in a trade or occupation in the area in which the project is located, except that, if there is no rate at which a majority of those hours is paid, "prevailing wage rate" means the average hourly basic rate of pay, plus the average hourly contribution for bona fide economic benefits, paid for the highest-paid 51 percent of hours worked in a trade or occupation in the area. Current law requires DWD to conduct investigations and hold public hearings as necessary to define the trades or occupations that are commonly employed on projects that are subject to the prevailing wage law and to inform itself as to the prevailing wage rates in all areas of the state for those trades or occupations, in order to determine the prevailing wage rate for each trade or occupation. Current law also contains certain other provisions regarding the calculation of prevailing wage rates by DWD, including provisions allowing for persons to request recalculations of the prevailing wage rates.

The substitute amendment repeals all provisions directing DWD to determine prevailing wage rates and redefines "prevailing wage rate" to instead mean the applicable prevailing wage rate as determined by the U.S. Department of Labor under the federal Davis-Bacon Act.

The substitute amendment eliminates DWD's other powers and responsibilities with respect to enforcing and administering the prevailing wage laws on state projects of public works, except that the substitute amendment retains DWD's authority to enforce the prevailing wage law through the wage claim enforcement law. The substitute amendment also eliminates a requirement that state agencies post prevailing wage rates and hours of labor on the sites of state projects other than state highway projects. The substitute amendment instead requires DOA to promulgate rules to enforce the prevailing wage laws on state projects other than state highway projects. The substitute amendment retains enforcement and oversight of the prevailing wage law on state highway projects by the Department of Transportation (DOT).

Coverage under prevailing wage law

Under current law, a person employed to process, manufacture, pick up, or deliver materials or products from a commercial establishment that has a fixed place of business from which the establishment supplies processed or manufactured materials or products or from a facility that is not dedicated exclusively, or nearly so, to a project of public works that is subject to the prevailing wage law is not covered under the prevailing wage law unless: 1) the person is employed to go to the source of mineral aggregate such as sand, gravel, or stone and deliver that mineral aggregate to the site of a project of public works that is subject to the prevailing wage law by depositing the material directly in final place; or 2) the person is employed to go to the site of a project of public works that is subject to the prevailing wage law, pick up excavated material or spoil from the site of the project, and transport it away from the site of the project.

The substitute amendment instead provides that persons who are employed to transport mineral aggregate to the site of a project or to transport excavated material or spoil away from the site of a project are not covered under the prevailing wage law.

Remedies for a violation of the prevailing wage law

Under current law, with respect to projects other than state highway projects, a contractor that fails to pay the prevailing wage rate or overtime pay to an employee as required under the prevailing wage law is liable to the affected employee for the amount of unpaid wages and overtime pay, plus liquidated damages in an amount equal to 100 percent of the unpaid wages and overtime pay.

This substitute amendment eliminates a contractor's liability for those liquidated damages.

Other changes

In addition, the substitute amendment:

1. Provides that DOA or DOT must conduct an investigation to determine compliance with the prevailing wage law upon request, but only if the requestor is a person who is an employee performing work on a prevailing wage project. Current law requires such an inspection on the request of any person.

2. Requires a person not employed by DOA, DOT, or DWD or by a contracting state agency who contacts an employee performing work on a project for the purpose of investigating compliance with the prevailing wage law to provide a written statement to the employee stating that the person is not affiliated with DOA, DOT, or DWD or the contracting state agency and disclosing the principal source of funding for the investigation.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB32-ASA1,1 Section 1. 16.856 of the statutes is created to read:

AB32-ASA1,4,4 16.856 Prevailing wage. (1) (f) "Prevailing wage rate" means the applicable prevailing wage rate for an area, as determined by the U.S. department of labor under 40 USC 3142.

AB32-ASA1,5,4 (5) Disclosure. If a person who is not an employee of the department or the contracting state agency or who is not an employee of the department of workforce development conducting an investigation under s. 109.09 contacts an employee performing the work described in sub. (2m) for the purpose of investigating compliance with this section, the person shall provide a written statement to the employee stating that the person is not affiliated with the department, the contracting state agency, or the department of workforce development and disclosing the principal source of funding for the investigation.

AB32-ASA1,5,7 (7) Rules; enforcement. (a) The department shall promulgate any rules that the department determines are necessary to implement and ensure compliance with this section.

AB32-ASA1,5,11 (b) If requested by any person performing the work described in sub. (2m), the department shall inspect the payroll records of any contractor, subcontractor, or agent performing work on a project of public works that is subject to this section to ensure compliance with this section.

AB32-ASA1,5,13 (c) Section 111.322 (2m) applies to discharge and other discriminatory acts arising in connection with any proceeding under this section.

AB32-ASA1,2 Section 2. 19.36 (12) of the statutes is amended to read:

AB32-ASA1,5,24 19.36 (12) Information relating to certain employees. Unless access is specifically authorized or required by statute, an authority shall may not provide access to a record prepared or provided by an employer performing work on a project to which s. 66.0903, 103.49, or 103.50 16.856 or 84.062 applies, or on which the employer is otherwise required to pay prevailing wages, if that record contains the name or other personally identifiable information relating to an employee of that employer, unless the employee authorizes the authority to provide access to that information. In this subsection, "personally identifiable information" does not include an employee's work classification, hours of work, or wage or benefit payments received for work on such a project.

AB32-ASA1,3 Section 3. 66.0129 (5) of the statutes is amended to read:

AB32-ASA1,6,5 66.0129 (5) Bids for construction. The nonprofit corporation shall let all contracts exceeding $1,000 for the construction, maintenance or repair of hospital facilities to the lowest responsible bidder after advertising for bids by the publication of a class 2 notice under ch. 985. Sections Section 66.0901 and 66.0903 apply applies to bids and contracts under this subsection.

AB32-ASA1,4 Section 4. 66.0903 (title) of the statutes is repealed and recreated to read:

AB32-ASA1,6,7 66.0903 (title) Prevailing wage.

AB32-ASA1,5 Section 5. 66.0903 (1) (a), (am), (b), (cm), (dr), (em), (hm) and (im) of the statutes are repealed.

AB32-ASA1,6 Section 6. 66.0903 (1) (c) of the statutes is amended to read:

AB32-ASA1,6,12 66.0903 (1) (c) "Hourly basic rate of pay" has the meaning given in s. 103.49 16.856 (1) (b).

AB32-ASA1,7 Section 7. 66.0903 (1) (f) of the statutes is amended to read:

AB32-ASA1,6,15 66.0903 (1) (f) "Prevailing hours of labor" has the meaning given in s. 103.49 16.856 (1) (c) (e).

AB32-ASA1,8 Section 8. 66.0903 (1) (g) of the statutes is repealed and recreated to read:

AB32-ASA1,6,18 66.0903 (1) (g) "Prevailing wage rate" includes the meanings given under s. 66.0903 (1) (g), 2013 stats., and s. 16.856 (1) (f).

AB32-ASA1,9 Section 9. 66.0903 (1) (j) of the statutes is amended to read:

AB32-ASA1,6,21 66.0903 (1) (j) "Truck driver" has the meaning given in s. 103.49 16.856 (1) (g) (j).

AB32-ASA1,10 Section 10. 66.0903 (1m) (a) (intro.) of the statutes is renumbered 66.0903 (1) (h) and amended to read:

AB32-ASA1,7,6 66.0903 (1) (h) In this subsection, " publicly "Publicly funded private construction project" means a construction project in which the developer, investor, or owner of the project receives direct financial assistance from a local governmental unit for the erection, construction, repair, remodeling, demolition, including any alteration, painting, decorating, or grading, of a private facility, including land, a building, or other infrastructure. "Publicly funded private construction project" does not include a project of public works or a housing project involving the erection, construction, repair, remodeling, or demolition of any of the following: .

AB32-ASA1,11 Section 11. 66.0903 (1m) (a) 1. to 3. of the statutes are repealed.

AB32-ASA1,12 Section 12. 66.0903 (1m) (b) of the statutes is amended to read:

AB32-ASA1,7,22 66.0903 (1m) (b) The legislature finds that the enactment of ordinances or other enactments by local governmental units requiring laborers, workers, mechanics, and truck drivers employed on projects of public works or on publicly funded private construction projects to be paid the prevailing wage rate and to be paid at least 1.5 times their hourly basic rate of pay for hours worked in excess of the prevailing hours of labor would be logically inconsistent with, would defeat the purpose of, and would go against the spirit of this section and the repeal repeals of s. 66.0904, 2009 stats, and s. 66.0903 (2) to (12), 2013 stats. Therefore, this section shall be construed as an enactment of statewide concern for the purpose of providing uniform prevailing wage rate and prevailing hours of labor requirements throughout the state purposes of facilitating broader participation with respect to bidding on projects of public works, ensuring that wages accurately reflect market conditions, providing local governments with the flexibility to reduce costs on capital projects, and reducing spending at all levels of government in this state.

AB32-ASA1,13 Section 13. 66.0903 (2) to (12) of the statutes are repealed.

AB32-ASA1,14 Section 14. 84.062 of the statutes is created to read:

AB32-ASA1,7,25 84.062 Prevailing wage. (1) Definitions. In this section:

AB32-ASA1,8,1 (a) "Hourly basic rate of pay" has the meaning given in s. 16.856 (1) (b).

AB32-ASA1,8,2 (b) "Prevailing hours of labor" has the meaning given in s. 16.856 (1) (e).

AB32-ASA1,8,3 (c) "Prevailing wage rate" has the meaning given in s. 16.856 (1) (f).

AB32-ASA1,8,4 (d) "Truck driver" has the meaning given in s. 16.856 (1) (j).

AB32-ASA1,8,10 (5) Disclosure. If a person who is not an employee of the department or the contracting state agency contacts an employee performing the work described in sub. (2m) for the purpose of investigating compliance with this section, the person shall provide a written statement to the employee stating that the person is not affiliated with the department or the contracting state agency and disclosing the principal source of funding for the investigation.

AB32-ASA1,15 Section 15. 84.41 (3) of the statutes is amended to read:

AB32-ASA1,8,16 84.41 (3) Employment regulations. Employment regulations set forth in s. 103.50 84.062 pertaining to wages and hours shall apply to all projects constructed under s. 84.40 in the same manner as such laws apply to projects on other state highways. Where applicable, the federal wages and hours law known as the Davis-Bacon act shall apply.

AB32-ASA1,16 Section 16. 103.005 (12) (a) of the statutes is amended to read:

AB32-ASA1,9,3 103.005 (12) (a) If any employer, employee, owner, or other person violates chs. 103 to 106, or fails or refuses to perform any duty required under chs. 103 to 106, within the time prescribed by the department, for which no penalty has been specifically provided, or fails, neglects or refuses to obey any lawful order given or made by the department or any judgment or decree made by any court in connection with chs. 103 to 106, for each such violation, failure or refusal, the employer, employee, owner or other person shall forfeit not less than $10 nor more than $100 for each offense. This paragraph does not apply to any person who fails to provide any information to the department to assist the department in determining prevailing wage rates or prevailing hours of labor under s. 103.49 (3) (a) or (am) or 103.50 (3) or (4).

AB32-ASA1,17 Section 17. 103.49 (title) of the statutes is repealed.

AB32-ASA1,18 Section 18. 103.49 (1) (intro.), (am), (b), (bj), (br), (c), (em), (f), (fm) and (g), (1m) and (3g) of the statutes are renumbered 16.856 (1) (intro.), (a), (b), (c), (d), (e), (g), (h), (i) and (j), (1m) and (3g).

AB32-ASA1,19 Section 19. 103.49 (1) (a), (bg) and (d) of the statutes are repealed.

AB32-ASA1,20 Section 20. 103.49 (2) of the statutes is renumbered 16.856 (2) and amended to read:

AB32-ASA1,9,25 16.856 (2) Prevailing wage rates and hours of labor. Any contract made for the erection, construction, remodeling, repairing, or demolition of any project of public works to which the state or any state agency is a party shall contain a stipulation that no person performing the work described in sub. (2m) may be permitted to work a greater number of hours per day or per week than the prevailing hours of labor, except that any such person may be permitted or required to work more than such prevailing hours of labor per day and per week if he or she is paid for all hours worked in excess of the prevailing hours of labor at a rate of at least 1.5 times his or her hourly basic rate of pay; nor may he or she be paid less than the prevailing wage rate determined under sub. (3) in the same or most similar trade or occupation in the area in which the project of public works is situated. A reference to the prevailing wage rates determined under sub. (3) and the prevailing hours of labor shall be published in the notice issued for the purpose of securing bids for the project. If any contract or subcontract for a project of public works that is subject to this section is entered into, the prevailing wage rates determined under sub. (3) and the prevailing hours of labor shall be physically incorporated into and made a part of the contract or subcontract, except that for a minor subcontract, as determined by the department, the department shall prescribe by rule the method of notifying the minor subcontractor of the prevailing wage rates and prevailing hours of labor applicable to the minor subcontract. The prevailing wage rates and prevailing hours of labor applicable to a contract or subcontract may not be changed during the time that the contract or subcontract is in force.

AB32-ASA1,21 Section 21. 103.49 (2m) of the statutes is renumbered 16.856 (2m), and 16.856 (2m) (a) (intro.) and (b), as renumbered, are amended to read:

AB32-ASA1,10,14 16.856 (2m) (a) (intro.) Subject to par. (b), all of the following employees shall be paid the prevailing wage rate determined under sub. (3) and may not be permitted to work a greater number of hours per day or per week than the prevailing hours of labor, unless they are paid for all hours worked in excess of the prevailing hours of labor at a rate of at least 1.5 times their hourly basic rate of pay:

AB32-ASA1,10,23 (b) A laborer, worker, mechanic, or truck driver who is employed to process, manufacture, pick up, or deliver materials or products from a commercial establishment that has a fixed place of business from which the establishment supplies processed or manufactured materials or products or from a facility that is not dedicated exclusively, or nearly so, to a project of public works that is subject to this section, including any of the following, is not entitled to receive the prevailing wage rate determined under sub. (3) or to receive at least 1.5 times his or her hourly basic rate of pay for all hours worked in excess of the prevailing hours of labor unless any of the following applies:

AB32-ASA1,11,3 1. The A laborer, worker, mechanic, or truck driver who is employed to go to the source of mineral aggregate such as sand, gravel, or stone and deliver that mineral aggregate to the site of a project of public works that is subject to this section by depositing the material directly in final place, from the transporting vehicle or through spreaders from the transporting vehicle.

AB32-ASA1,11,7 2. The A laborer, worker, mechanic, or truck driver who is employed to go to the site of a project that is subject to this section, pick up excavated material or spoil from the site of the project of public works, and transport that excavated material or spoil away from the site of the project.

AB32-ASA1,22 Section 22. 103.49 (3), (4r) and (5) of the statutes are repealed.

AB32-ASA1,23 Section 23. 103.49 (6m) (title) of the statutes is renumbered 16.856 (6m) (title).

AB32-ASA1,24 Section 24. 103.49 (6m) (ag) of the statutes is renumbered 16.856 (6m) (ag), and 16.856 (6m) (ag) 1., 2. and 3., as renumbered, are amended to read:

AB32-ASA1,11,19 16.856 (6m) (ag) 1. Any contractor, subcontractor, or contractor's or subcontractor's agent who fails to pay the prevailing wage rate determined by the department under sub. (3) or who pays less than 1.5 times the hourly basic rate of pay for all hours worked in excess of the prevailing hours of labor is liable to any affected employee in the amount of his or her unpaid wages or his or her unpaid overtime compensation and in an additional amount as liquidated damages as provided in subd. 2. or 3., whichever is applicable.

AB32-ASA1,12,3 2. If the department determines upon inspection under sub. (5) (b) or (c) that a contractor, subcontractor, or contractor's or subcontractor's agent has failed to pay the prevailing wage rate determined by the department under sub. (3) or has paid less than 1.5 times the hourly basic rate of pay for all hours worked in excess of the prevailing hours of labor, the department shall order the contractor to pay to any affected employee the amount of his or her unpaid wages or his or her unpaid overtime compensation and an additional amount equal to 100 percent of the amount of those unpaid wages or that unpaid overtime compensation as liquidated damages within a period specified by the department in the order.

AB32-ASA1,12,14 3. In addition to or in lieu of recovering the liability specified in subd. 1. as provided in subd. 2., any employee for and in behalf of that employee and other employees similarly situated may commence an action to recover that liability in any court of competent jurisdiction. If the court finds that a contractor, subcontractor, or contractor's or subcontractor's agent has failed to pay the prevailing wage rate determined by the department under sub. (3) or has paid less than 1.5 times the hourly basic rate of pay for all hours worked in excess of the prevailing hours of labor, the court shall order the contractor, subcontractor, or agent to pay to any affected employee the amount of his or her unpaid wages or his or her unpaid overtime compensation and an additional amount equal to 100 percent of the amount of those unpaid wages or that unpaid overtime compensation as liquidated damages.

AB32-ASA1,25 Section 25. 103.49 (6m) (am) of the statutes is renumbered 16.856 (6m) (am) and amended to read: