HF 10

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 04/18/2023 01:53pm

A bill for an act
relating to labor and industry; providing for use of skilled and trained contractor
workforces at petroleum refineries; amending Minnesota Statutes 2022, section
177.27, subdivision 4; proposing coding for new law in Minnesota Statutes, chapter
181.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2022, section 177.27, subdivision 4, is amended to read:

Subd. 4.

Compliance orders.

The commissioner may issue an order requiring an
employer to comply with sections 177.21 to 177.435, 181.02, 181.03, 181.031, 181.032,
181.101, 181.11, 181.13, 181.14, 181.145, 181.15, 181.172, paragraph (a) or (d), 181.275,
subdivision 2a, 181.722, 181.79, deleted text begin and deleted text end 181.939 to 181.943, new text begin and 181.987, new text end or with any rule
promulgated under section 177.28. The commissioner shall issue an order requiring an
employer to comply with sections 177.41 to 177.435 new text begin or 181.987 new text end if the violation is repeated.
For purposes of this subdivision only, a violation is repeated if at any time during the two
years that preceded the date of violation, the commissioner issued an order to the employer
for violation of sections 177.41 to 177.435 new text begin or 181.987 new text end and the order is final or the
commissioner and the employer have entered into a settlement agreement that required the
employer to pay back wages that were required by sections 177.41 to 177.435. The
department shall serve the order upon the employer or the employer's authorized
representative in person or by certified mail at the employer's place of business. An employer
who wishes to contest the order must file written notice of objection to the order with the
commissioner within 15 calendar days after being served with the order. A contested case
proceeding must then be held in accordance with sections 14.57 to 14.69. If, within 15
calendar days after being served with the order, the employer fails to file a written notice
of objection with the commissioner, the order becomes a final order of the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024.
new text end

Sec. 2.

new text begin [181.987] USE OF SKILLED AND TRAINED CONTRACTOR
WORKFORCES AT PETROLEUM REFINERIES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Contractor" means a vendor that enters into or seeks to enter into a contract with
an owner or operator of a petroleum refinery to perform construction, alteration, demolition,
installation, repair, maintenance, or hazardous material handling work at the site of the
petroleum refinery. Contractor includes all contractors or subcontractors of any tier
performing work as described in this paragraph at the site of the petroleum refinery.
Contractor does not include employees of the owner or operator of a petroleum refinery.
new text end

new text begin (c) "Registered apprenticeship program" means an apprenticeship program registered
with the Department of Labor and Industry under chapter 178 or with the United States
Department of Labor Office of Apprenticeship or a recognized state apprenticeship agency
under Code of Federal Regulations, title 29, parts 29 and 30.
new text end

new text begin (d) "Skilled and trained workforce" means a workforce in which each employee of the
contractor or subcontractor of any tier working at the site of the petroleum refinery in an
apprenticeable occupation in the building and construction trades meets one of the following
criteria:
new text end

new text begin (1) is currently registered as an apprentice in a registered apprenticeship program in the
applicable trade;
new text end

new text begin (2) has graduated from a registered apprenticeship program in the applicable trade;
new text end

new text begin (3) has completed all of the related instruction and on-the-job learning requirements
needed to graduate from the registered apprenticeship program their employer participates
in; or
new text end

new text begin (4) has at least five years of experience working in the applicable trade and is currently
participating in journeyworker upgrade training in a registered apprenticeship program in
the applicable trade or has completed any training identified as necessary by the registered
apprenticeship training program for the employee to become a qualified journeyworker in
the applicable trade.
new text end

new text begin (e) "Petroleum refinery" means a facility engaged in producing gasoline, kerosene,
distillate fuel oils, residual fuel oil, lubricants, or other products through distillation of
petroleum or through redistillation, cracking, or reforming of unfinished petroleum
derivatives. Petroleum refinery includes fluid catalytic cracking unit catalyst regenerators,
fluid catalytic cracking unit incinerator-waste heat boilers, fuel gas combustion devices,
and indirect heating equipment associated with the refinery.
new text end

new text begin (f) "Apprenticeable occupation" means any trade, form of employment, or occupation
approved for apprenticeship by the commissioner of labor and industry or the United States
Secretary of Labor.
new text end

new text begin (g) "OEM" means original equipment manufacturer and refers to organizations that
manufacture or fabricate equipment for sale directly to purchasers or other resellers.
new text end

new text begin Subd. 2. new text end

new text begin Use of contractors by owner, operator; requirement. new text end

new text begin (a) An owner or operator
of a petroleum refinery shall, when contracting with contractors for the performance of
construction, alteration, demolition, installation, repair, maintenance, or hazardous material
handling work at the site of the petroleum refinery, require that the contractors performing
that work, and any subcontractors of any tier, use a skilled and trained workforce when
performing that work at the site of the petroleum refinery. The requirement to use a safe
and skilled workforce under this section shall apply to each contractor and subcontractor
of any tier when performing construction, alteration, demolition, installation, repair,
maintenance, or hazardous material handling work at the site of the petroleum refinery.
new text end

new text begin (b) The requirement under this subdivision applies only when each contractor and
subcontractor of any tier is performing work at the site of the petroleum refinery.
new text end

new text begin (c) The requirement under this subdivision does not apply when an owner or operator
contracts with contractors or subcontractors hired to install OEM equipment and to perform
OEM work to comply with equipment warranty requirements.
new text end

new text begin (d) A contractor's workforce must meet the requirements of subdivision 1, paragraph
(d), according to the following schedule:
new text end

new text begin (1) 30 percent by January 1, 2024;
new text end

new text begin (2) 45 percent by January 1, 2025; and
new text end

new text begin (3) 60 percent by January 1, 2026.
new text end

new text begin (e) If a contractor is required under a collective bargaining agreement to hire workers
referred by a labor organization for the petroleum refinery worksite, and the labor
organization is unable to refer sufficient workers for the contractor to comply with the
applicable percentage provided in subdivision 2, paragraph (d), within 48 hours of the
contractor's request excluding Saturdays, Sundays, and holidays, the contractor shall be
relieved of the obligation to comply with the applicable percentage and shall use the
maximum percentage of a skilled and trained workforce that is available to the contractor
from the labor organization's referral procedure. The contractor shall comply with the
applicable percentage provided in subdivision 2, paragraph (d), once the labor organization
is able to refer sufficient workers for the contractor to comply with the applicable percentage.
new text end

new text begin (f) This section shall not apply to a contractor to the extent that an emergency makes
compliance with this section impracticable for the contractor because the emergency requires
immediate action by the contractor to prevent harm to public health or safety or to the
environment. The requirements of this section shall apply to the contractor once the
emergency ends or it becomes practicable for the contractor to obtain a skilled and trained
workforce for the refinery worksite, whichever occurs sooner.
new text end

new text begin (g) An owner or operator is exempt from this section if:
new text end

new text begin (1) the owner or operator has entered into a project labor agreement with a council of
building trades labor organizations requiring participation in registered apprenticeship
programs, or all contractors and subcontractors of any tier have entered into bona fide
collective bargaining agreements with labor organizations requiring participation in registered
apprenticeship programs; and
new text end

new text begin (2) all contracted work at the petroleum refinery that is subject to this section is also
subject to the project labor agreement or collective bargaining agreements requiring
participation in such registered apprenticeship programs.
new text end

new text begin Subd. 3. new text end

new text begin Penalties. new text end

new text begin (a) The Division of Labor Standards shall receive complaints of
violations of this section. The commissioner of labor and industry shall fine an owner or
operator, contractor, or subcontractor of any tier not less than $5,000 nor more than $10,000
for each violation of the requirements in this section. An owner or operator, contractor, or
subcontractor of any tier shall be considered an employer for purposes of section 177.27.
new text end

new text begin (b) An owner or operator shall be found in violation of this section, and subject to fines
and other penalties, for failing to:
new text end

new text begin (1) require a skilled and trained workforce in its contracts and subcontracts as required
by subdivision 2, paragraph (a); or
new text end

new text begin (2) enforce the requirement of use of a skilled and trained workforce as required by
subdivision 2, paragraph (a).
new text end

new text begin (c) A contractor or subcontractor shall be found in violation of this section, and subject
to fines and other penalties, if the contractor or subcontractor fails to use a skilled and trained
workforce as required by subdivision 2, paragraph (a).
new text end

new text begin (d) Each shift on which a violation of this section occurs shall be considered a separate
violation. This fine is in addition to any penalties provided under section 177.27, subdivision
7. In determining the amount of a fine under this subdivision, the appropriateness of the
fine to the size of the violator's business and the gravity of the violation shall be considered.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to contracts
entered into, extended, or renewed on or after that date. Existing contracts entered into
before January 1, 2024, must be renegotiated to comply with section 2 by January 1, 2025.
new text end