1.1A bill for an act1.2relating to employment; modifying requirements concerning contractors; 1.3modifying prevailing wage provisions; providing penalties;amending Minnesota 1.4Statutes 2006, sections 16C.03, subdivision 2; 161.315, subdivisions 1, 2; 1.5177.27, subdivisions 1, 4, 8, 9, 10; 177.42; 177.43; 177.44; 471.345, by adding a 1.6subdivision; proposing coding for new law in Minnesota Statutes, chapter 177.1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:1.8    Section 1. Minnesota Statutes 2006, section 16C.03, subdivision 2, is amended to read:1.9    Subd. 2. Rulemaking authority. Subject to chapter 14, the commissioner may 1.10adopt rules, consistent with this chapter and chapter 16B, relating to the following topics:1.11    (1) solicitations and responses to solicitations, bid security, vendor errors, opening 1.12of responses, award of contracts, tied bids, and award protest process;1.13    (2) contract performance and failure to perform;1.14    (3) authority to debar or suspend vendors from performing any work under a contract 1.15as a prime contractor, subcontractor, agent, or material supplier on any contracts funded in 1.16whole or in part with state funds, and reinstatement of vendors;1.17    (4) contract cancellation;1.18    (5) procurement from rehabilitation facilities; and1.19    (6) organizational conflicts of interest.1.20    Sec. 2. Minnesota Statutes 2006, section 161.315, subdivision 1, is amended to read:1.21    Subdivision 1. Legislative intent. Recognizing that the preservation of the integrity 1.22of the public contracting process of the Department of Transportation is vital to the 1.23development of a balanced and efficient transportation system and a matter of interest to 1.24the people of the state, the legislature hereby determines and declares that:2.1    (1) the procedures of the department for bidding and awarding department contracts 2.2exist to secure the public benefits of free and open competition and to secure the quality of 2.3public works;2.4    (2) the opportunity to be awarded department contracts or to supply goods or 2.5services to the department is a privilege, not a right; and2.6    (3) the privilege of transacting business with the department or local road authority 2.7should be denied to persons convicted of a contract crime, or that have committed a serious 2.8contract violation,  in order to preserve the integrity of the public contracting process.2.9    Sec. 3. Minnesota Statutes 2006, section 161.315, subdivision 2, is amended to read:2.10    Subd. 2. Definitions. The terms used in this section have the meanings given them 2.11in this subdivision.2.12    (a) "Affiliate" means a predecessor or successor of a person by merger, 2.13reorganization, or otherwise, who is, or that has as an officer or director an individual 2.14who is, a relative of the person or an individual over whose actions the person exercises 2.15substantial influence or control, or a group of entities so connected or associated that one 2.16entity controls or has the power to control each of the other entities. "Affiliate" includes 2.17the affiliate's principals. One person's ownership of a controlling interest in another entity 2.18or a pooling of equipment or income among entities is prima facie evidence that one 2.19entity is an affiliate of another.2.20    (b) "Contract crime" means a violation of state or federal antitrust law, fraud, theft, 2.21embezzlement, bribery, forgery, misrepresentation, making false statements, falsification 2.22or destruction of records, collusion, or other criminal offense in connection with obtaining, 2.23attempting to obtain, or performing a public or private contract or subcontract, or other 2.24offense indicating a lack of business integrity.2.25    (c) "Conviction" has the meaning given it in section 
         609.02, subdivision 5. 2.26    (d) "Debar" means to disqualify from receiving a contract or from serving as a 2.27subcontractor or material supplier as provided by Laws 1984, chapter 654, article 2, 2.28section 8.2.29    (e) "Person" means a natural person or a business, corporation, association, 2.30partnership, sole proprietorship, or other entity formed to do business as a contractor, 2.31subcontractor, or material supplier and includes an affiliate of a person.2.32    (f) "Pooling" means a combination of persons engaged in the same business or 2.33combined for the purpose of engaging in a particular business or commercial venture and 2.34who all contribute to a common fund or place their holdings of a given stock or other 2.35security in the hand and control of a managing member or committee of the combination.3.1    (g) "Suspend" means to temporarily disqualify from receiving a contract or from 3.2serving as a subcontractor or material supplier as provided by Laws 1984, chapter 654, 3.3article 2, section 8.3.4    (h) "Relative" means an individual related by consanguinity within the second 3.5degree as determined by the common law, a spouse, or an individual related to a spouse 3.6within the second degree as determined by the common law, and includes an individual in 3.7an adoptive relationship within the second degree as determined by the common law.3.8    (i) "Serious contract violation" means failure without good cause to perform 3.9according to the specifications, time limits, or any terms or conditions in a contract; a 3.10record of failure to perform or unsatisfactory performance, according to the terms, of more 3.11than one contract as measured by standard commercial practices, not caused by acts 3.12beyond the control of the contractor; or any other cause the commissioner determines to 3.13be serious and compelling including, but not limited to, threatening or abusive behavior, 3.14collusion with other vendors to restrain competition, giving false information on a vendor's 3.15registration application or response to a solicitation, or violating terms of a suspension.3.16    (j) "Governmental entity" means the federal government, the state of Minnesota, 3.17or any of its departments, commissions, councils, agencies, political subdivisions, 3.18municipalities, local government bodies, or an agent of any of those entities.3.19    Sec. 4. Minnesota Statutes 2006, section 177.27, subdivision 1, is amended to read:3.20    Subdivision 1. Examination of records. The commissioner may enter during 3.21reasonable office hours or upon request and inspect the place of business or employment of 3.22any employer of employees working in the state, to examine and inspect books, registers, 3.23payrolls, and other records of any employer that in any way relate to wages, hours, and 3.24other conditions of employment of any employees. The commissioner may transcribe any 3.25or all of the books, registers, payrolls, and other records as the commissioner deems 3.26necessary or appropriate and may question the employees to ascertain compliance with 3.27sections 
         177.21 to 
         177.35 177.46. The commissioner may investigate wage claims or 3.28complaints by an employee against an employer if the failure to pay a wage may violate 3.29Minnesota law or an order or rule of the department. 3.30    Sec. 5. Minnesota Statutes 2006, section 177.27, subdivision 4, is amended to read:3.31    Subd. 4. Compliance orders. The commissioner may issue an order requiring an 3.32employer to comply with sections 
         177.21 to 
         177.35 177.46, 
         181.02, 
         181.03, 
         181.031, 3.33181.032
         , 
         181.101, 
         181.11, 
         181.12, 
         181.13, 
         181.14, 
         181.145, 
         181.15, and 
         181.79, or with 3.34any rule promulgated under section 
         177.28. The department shall serve the order upon 4.1the employer or the employer's authorized representative in person or by certified mail 4.2at the employer's place of business. An employer who wishes to contest the order must 4.3file written notice of objection to the order with the commissioner within 15 calendar 4.4days after being served with the order. A contested case proceeding must then be held 4.5in accordance with sections 
         14.57 to 
         14.69. If, within 15 calendar days after being 4.6served with the order, the employer fails to file a written notice of objection with the 4.7commissioner, the order becomes a final order of the commissioner. 4.8    Sec. 6. Minnesota Statutes 2006, section 177.27, subdivision 8, is amended to read:4.9    Subd. 8. Court actions; suits brought by private parties. An employee may bring 4.10a civil action seeking redress for a violation or violations of sections 
         177.21 to 
         177.354.11177.46 directly to district court. An employer who pays an employee less than the wages 4.12and overtime compensation to which the employee is entitled under sections 
         177.21 to 4.13177.35 177.46 is liable to the employee for the full amount of the wages, gratuities, and 4.14overtime compensation, less any amount the employer is able to establish was actually 4.15paid to the employee and for an additional equal amount as liquidated damages. In 4.16addition, in an action under this subdivision the employee may seek damages and other 4.17appropriate relief provided by subdivision 7 and otherwise provided by law. An agreement 4.18between the employee and the employer to work for less than the applicable wage is not 4.19a defense to the action. 4.20    Sec. 7. Minnesota Statutes 2006, section 177.27, subdivision 9, is amended to read:4.21    Subd. 9. District court jurisdiction. Any action brought under subdivision 8 may 4.22be filed in the district court of the county wherein a violation or violations of sections 4.23177.21
          to 
         177.35 177.46 are alleged to have been committed, where the respondent resides 4.24or has a principal place of business, or any other court of competent jurisdiction. The 4.25action may be brought by one or more employees. 4.26    Sec. 8. Minnesota Statutes 2006, section 177.27, subdivision 10, is amended to read:4.27    Subd. 10. Attorney fees and costs. In any action brought pursuant to subdivision 8, 4.28the court shall order an employer who is found to have committed a violation or violations 4.29of sections 
         177.21 to 
         177.35 177.46 to pay to the employee or employees reasonable costs, 4.30disbursements, witness fees, and attorney fees. 4.31    Sec. 9. Minnesota Statutes 2006, section 177.42, is amended to read:4.32177.42 DEFINITIONS.5.1    Subdivision 1. Scope. As used in sections 
         177.41 to 
         177.44 177.46 the terms defined 5.2in this section have the meanings given them except where the context indicates otherwise. 5.3    Subd. 2. Project. "Project" means erection, construction, remodeling, or repairing 5.4of a public building or other public work financed in whole or part by state funds.5.5    Subd. 3. Area. "Area" means the county or other locality from which labor for 5.6any project is normally secured.5.7    Subd. 4. Prevailing hours of labor. "Prevailing hours of labor" means the hours 5.8of labor per day and per week worked within the area by a larger number of workers of 5.9the same class than are employed within the area for any other number of hours per day 5.10and per week. The prevailing hours of labor may not be more than eight hours per day 5.11or more than 40 hours per week.5.12    Subd. 5. Hourly basic rate. "Hourly basic rate" means the taxable hourly wage 5.13paid to any employee.5.14    Subd. 6. Prevailing wage rate. "Prevailing wage rate" means the hourly basic rate 5.15of pay plus the contribution for health and welfare benefits, vacation benefits, pension 5.16benefits, and any other economic benefit considered by the commissioner to be a direct 5.17benefit to the employee and paid to the largest number of workers engaged in the same 5.18class of labor within the area and includes, for the purposes of section 
         177.44, rental 5.19rates for truck hire paid to those who own and operate the truck. The prevailing wage 5.20rate may not be less than a reasonable and living wage, that must be at least two times 5.21the established state minimum wage rate. 5.22    Subd. 7.Laborer or mechanic."Laborer or mechanic" includes all workers 5.23performing manual and physical work on the project for the time spent performing the 5.24duties of classifications of labor.5.25    Subd. 8.Contracting authority."Contracting authority" means the state of 5.26Minnesota, a state agency, political subdivision of the state, commission, council, or any 5.27other entity with authority to enter into public works projects, or an agent of any of those 5.28entities, that enters into a contract for a project.5.29    Subd. 9.Contractor."Contractor" means the individual, firm, corporation, or 5.30other business entity entering into a contract with a contracting authority to complete a 5.31project, either directly or through an authorized representative, and who undertakes the 5.32prosecution of the work prescribed in the contract.5.33    Subd. 10.Contract."Contract" means the written agreement between the 5.34contracting authority and the contractor setting forth each party's rights and obligations, 5.35including, but not limited to, the performance of the work, type of work, furnishing 6.1of labor and materials, basis of payment, work specifications, and other requirements 6.2contained in the project documents.6.3    Subd. 11.Certified payroll."Certified payroll" is a form that contains:6.4    (1) Payroll form. A form that contains information on all laborers and mechanics 6.5that performed work under the contract, including the following payroll information: 6.6full name, address, Social Security number, each classification of labor worked, daily 6.7and weekly hours worked on the project, rates of pay, overtime hours and rates, taxes 6.8withheld and other deductions, the project gross amount and net amounts earned, the total 6.9gross amount and net amounts earned, in addition, the hourly costs of, and the provider 6.10names and contact information of, the company's fringe benefits program, along with 6.11project identification information, and any additional information determined by the 6.12commissioner to be necessary to ensure compliance with this section.6.13    (2) Certification form. A form that contains certification language approved by the 6.14commissioner and a signature block. Certified payroll must be submitted to a contracting 6.15authority on forms approved by the commissioner.6.16    Sec. 10. Minnesota Statutes 2006, section 177.43, is amended to read:6.17177.43 CONTRACTS FOR STATE PROJECTS; PENALTY.6.18    Subdivision 1. Hours of labor. Any contract which provides for a project must 6.19state that:6.20    (1) no laborer or mechanic employed directly on the project work site by the 6.21contractor or any subcontractor, agent, or other person doing or contracting to do all 6.22or a part of the work of the project, is permitted or required to work more hours than 6.23the prevailing hours of labor unless paid for all hours in excess of the prevailing hours 6.24at a rate of at least 1-1/2 times the taxable hourly basic rate of pay paid to the laborer or 6.25mechanic for the work performed under a contract; and6.26    (2) a laborer or mechanic maymust be paid unconditionally and not less often than 6.27on a weekly basis and shall not be paid a lesser rate of wages than the prevailing wage rate 6.28in the same or most similar trade or occupation in the area. Actual costs for providing 6.29bona fide fringe benefit programs as defined in subdivision 8 to a laborer or mechanic 6.30performing work under the contract may be deducted from the total prevailing wage rate 6.31to obtain the taxable hourly basic rate to be paid to the laborer or mechanic; and6.32    (3) the contractor, subcontractor, or agent shall not exceed their company 6.33apprenticeship ratio established by a certified or registered program on any project subject 6.34to this section.7.1    Subd. 2. Exceptions. This section does not apply to wage rates and hours of 7.2employment of laborers or mechanics who process or manufacture materials or products 7.3or to the delivery of materials or products by or for commercial establishments which have 7.4a fixed place of business from which they regularly supply processed or manufactured 7.5materials or products. This section applies to laborers or mechanics who deliver mineral 7.6aggregate such as sand, gravel, or stone which is incorporated into the work under the 7.7contract by depositing the material substantially in place, directly or through spreaders, 7.8from the transporting vehicle.7.9    Subd. 3. Contract requirements. The contract must specifically state the 7.10prevailing wage rates, prevailing hours of labor, and hourly basic rates of pay. The 7.11contracting authority shall incorporate into its proposals and contracts the appropriate 7.12wage determinations for the contract along with contract language provided by the 7.13commissioner of labor and industry to notify the contractor of the applicability of 7.14sections 177.41 to 177.46. Failure to incorporate the determination or provided contract 7.15language into the contracts shall make the contracting authority liable for making 7.16whole the contractor for any increases in the wages paid, including employment taxes 7.17and reasonable administrative costs based on the increase in wages, to the laborers or 7.18mechanics working on the project. The contracting authority is authorized to incorporate 7.19into the bid documents for each project a compliance monitoring surcharge provision. The 7.20surcharge shall be a percentage of the engineers estimate of the project. The surcharge 7.21percentage shall be either an amount set annually by the commissioner for all projects after 7.22investigation to determine the expected costs of monitoring compliance, or an amount 7.23requested by the contracting authority and authorized by the commissioner, and will be a 7.24percentage sufficient to pay the estimated cost to the contracting authority of monitoring 7.25compliance with sections 177.41 to 177.46. The surcharge shall be incorporated into the 7.26contract for the project and paid by the contractor to the contracting authority within 7.27two weeks of the payment by the contracting authority of the mobilization cost for the 7.28project as specified in the successful bid. The contracting authority shall use this surcharge 7.29exclusively to defray costs of monitoring compliance with sections 177.41 to 177.46.7.30    These hours, rates, and classifications, along with contracting authority name, 7.31project engineer or agency contact person, telephone number, and project identification 7.32numbers, together with a summary of provisions of subdivision 5 and a summary of 7.33provisions under section 177.46, shall be and remain posted directly on the project site 7.34by the contractor in at least one conspicuous and accessible location acceptable to the 7.35contracting authority for the information of all employees working on the project. The 8.1contracting authority shall ensure the contractor keeps the required information on the 8.2project from the start of work until all work is completed on the project.8.3    All contracting authorities shall require weekly submittal of certified payrolls from 8.4each contractor, subcontractor, or agent working on the project. The contractor shall 8.5submit certified payrolls from the contractor's own workforce along with payrolls from 8.6all subcontractors and agents working on the project. The contracting authority shall 8.7maintain the payrolls under the contracting agency's normal record retention schedules for 8.8a minimum of two years past the closing of the contract.8.9    Each contracting authority shall redact the Social Security number and address of 8.10each laborer or mechanic from each certified payroll before any person other than an 8.11employee of the contracting authority or the department is allowed to review the certified 8.12payroll.8.13    Certified payrolls shall be submitted within one week after the week ending date of 8.14the week in which the work was performed. Each subcontractor or agent shall furnish to 8.15the contractor weekly certified payrolls to demonstrate compliance with this section. The 8.16contractor may interview all laborers or mechanics on the project and review subcontractor 8.17or agents' payroll information to ensure compliance with this section.8.18    The contractor shall incorporate into all subcontract agreements, purchase orders, 8.19or other written agreements that provide for work covered by this section, the contract 8.20wage determinations and the contract language provided by the commissioner contained 8.21in the contract. The contractor shall also ensure that all secondary subcontract agreements, 8.22purchase orders, or other written agreements that provide for work covered by this section 8.23contain the same language. The contractor shall provide a written certified confirmation 8.24on a form provided by the contracting authority that all subcontractors and agents have 8.25received the required contract wage determinations and contract language. The form shall 8.26be provided to the contracting authority prior to any subcontractor or agent working on the 8.27project. If the contractor does not provide the information required to the subcontractor 8.28or agents, or the form to the contracting authority, the contractor shall be the sole entity 8.29responsible for any contracting authority or commissioner's assessment.8.30    Subd. 4. Determination by commissioner. The prevailing wage rates, prevailing 8.31hours of labor, and hourly basic rates of pay for all trades and occupations required in any 8.32projectunder each contract must be ascertainedobtained before the stateany contracting 8.33authority asks for bids. The wage determinations must also include future hours and rates 8.34when they can be determined for classes of laborers or mechanics in an area. The wage 8.35determination must specifically state the effective dates of future hours and rates when 8.36they are certified. The commissioner of labor and industry shall investigate as necessary 9.1to ascertain the information and shall develop and maintain classification definitions. 9.2The contractor and contracting authority shall apply the classification definitions to the 9.3laborers or mechanics performing work under the contract. Missing classifications, 9.4classification disputes, and disputes arising from interpretations of this section shall be 9.5resolved by the commissioner of labor and industry. The commissioner shall keep the 9.6information posted on the project in at least one conspicuous place for the information of 9.7the employees working on the project. A person aggrieved by a final determination of the 9.8commissioner may petition the commissioner for reconsideration of findings within 20 9.9days of the publication or decision. A person aggrieved by a decision of the commissioner 9.10after reconsideration may, within 20 days after the decision, petition the commissioner 9.11for a public hearing in the manner of a contested case under sections 
         14.57 to 
         14.61. If 9.12the commissioner finds that a change in the certified prevailing hours of labor, prevailing 9.13wage rate, and the hourly basic rate of pay for a class of laborers or mechanics in any area 9.14is required, the commissioner may at any time certify that change, and the certified change 9.15will be effective on a project advertised for bid on or after the date of certification.9.16    Subd. 5. Penalty Penalties: criminal, civil, and debarment.(a) It is a 9.17misdemeanorviolation for an officer or employee of the state toor contracting authority 9.18to knowingly execute a contract for a project without complying with this section, or for9.19the wage determination or contract language provided by the commissioner of labor 9.20and industry, or knowingly close a contract on a project with violations or assessments. 9.21A willful violation may be subject to the penalties assigned under section 609.43. A 9.22contractor, subcontractor, or agent to pay any laborer, worker, or mechanic employed 9.23directly on the project site a lesser wage for work done under the contract than the 9.24prevailing wage rate as stated in the contract. This misdemeanor is punishable by a fine 9.25ofwho violates this section is guilty of a gross misdemeanor for the first conviction of 9.26a criminal offense under this section and shall be fined for the violation not more than 9.27$700 $3,000, or imprisonmentimprisoned for not more than 90 daysone year, or both. 9.28Each agent or subcontractor shall furnish to the contractor evidence of compliance with 9.29this section.9.30     Each day a violation of this section continues is a separate offense violation. It will 9.31be considered a felony for the second conviction of a contractor, subcontractor, or agent 9.32for violations of this section, or for the conviction of a total unpaid back wage assessment 9.33by the commissioner of labor and industry against a violating contractor, subcontractor, or 9.34agent in excess of $100,000, and shall be fined for the violation not more that $10,000, or 9.35imprisoned for not more than five years, or both. Each day that the violation continues is a 9.36separate violation.10.1    Whoever induces a job applicant or employee on any project subject to this section 10.2to give up or forego any part of the wages to which the job applicant or employee is 10.3entitled under the contract governing the project by threat not to employ, by threat of 10.4dismissal from employment, or by any other means, or knowingly alters official company 10.5employment or time records to falsely report the laborer's or mechanic's pay is guilty of a 10.6gross misdemeanor and may by fined for the violation not exceeding $3,000 or imprisoned 10.7for not more than one year, or both. Each day that the violation continues is a separate 10.8violation.10.9    Any employee under this section who knowingly permits the contractor or 10.10subcontractor to pay less than the prevailing wage rate set forth in the contract, or who 10.11gives up any part of the compensation to which entitled under the contract, is guilty of a 10.12misdemeanor and may be fined no more than $40 or imprisoned not more than 30 days or 10.13both. Each day any violation of this paragraph continues is a separate violation.10.14    In addition to or instead of criminal prosecution under this subdivision, the 10.15commissioner may engage in any civil enforcement actions authorized by this section 10.16or section 177.45.10.17    (b) Penalties to be assessed by the contracting authorities. The contracting authority 10.18may deduct from what is owed the contractor on the project for civil penalties and 10.19assessments as defined by this section and provisions of section 177.43.10.20    (1) After written notification by the contracting authority, a civil penalty of $100 10.21per day shall be assessed against the contractor for each day work is performed on the 10.22project and the poster board is not placed or maintained on the project work site at a 10.23location acceptable to the contracting authority.10.24    (2) After written notification by the contracting authority, a civil penalty of $100 per 10.25week against the contractor for each week the contractor's certified payrolls or any of the 10.26individual subcontractor or agent-certified payrolls are not submitted.10.27    (3) After written notification by the contracting authority, a civil penalty of $50 per 10.28week shall be assessed against the contractor for each week that the subcontractor or agent 10.29forms as defined in section 177.43, subdivision 3, are not submitted.10.30    (c) A contractor, subcontractor, or agent that is convicted criminally or held liable 10.31civilly under this section shall be deemed to have a lack of business integrity and shall be 10.32debarred by the commissioner from working on any contract funded in whole or in part 10.33with state funds as a contractor, subcontractor, agent, or material supplier for a period of at 10.34least one year and not to exceed three years. The commissioner shall maintain and publish 10.35a current list of the debarred entities. If any contracting authority has debarred an entity 10.36for prevailing wage violations, the contracting authority shall report the debarment to the 11.1commissioner, who will then include the contractor on the list of debarred entities. All 11.2contracting authorities may not contract with a debarred entity or allow a debarred entity 11.3to work on any project as a subcontractor, material supplier, or in any other capacity.11.4    Subd. 6. Examination of records and investigation by the department. The 11.5Department of Labor and Industry shall enforce this section. The department may demand, 11.6and the contractor and subcontractor shall furnish to the department, copies of any or all 11.7payrolls.All the contracting authorities that award a contract funded in whole or in part 11.8with state funds shall notify the commissioner in writing of the project location, contractor, 11.9and any other project information deemed necessary by the commissioner. All contracting 11.10authorities shall notify the commissioner in writing when they finalize the project contract. 11.11The department shall employ at least five investigators to perform on-site project reviews 11.12and to receive and investigate complaints of violations of this section, and to conduct 11.13training and outreach to contractors and contracting authorities. These investigators shall 11.14be in addition to any investigators employed to conduct prevailing wage surveys. The 11.15department may demand, and the contractor or subcontractor or agent shall furnish to 11.16the department, copies of any or all payroll documentation deemed necessary by the 11.17department. The department may also demand, and the contracting authority shall furnish 11.18to the department, any or all project information. The department may examine all records 11.19relating to wages paid or fringe benefits provided to laborers or mechanics on work to 11.20whichto ensure compliance with sections 
         177.41 to 
         177.44 apply 177.46. 11.21    The commissioner shall determine the amount of back wages owed to the affected 11.22laborer or mechanic, shall assess a 100 percent penalty based on the amount of back 11.23wages owed to be paid to the affected laborer or mechanic, and an additional civil penalty 11.24equal to 100 percent of the back wages owed to be paid to the department and deposited 11.25into a dedicated fund for future prevailing wage enforcement efforts and assess the total 11.26amount of back wages owed and penalties against the violating contractor, subcontractor, 11.27or agent accordingly. If it is determined that a violation has occurred, the commissioner 11.28may investigate all other open or closed contracts requiring payment of prevailing wages 11.29on which that contractor, subcontractor, or agent performed any work within the previous 11.30two years. The department shall notify both the contractor and the contracting authority of 11.31its findings and assessment. If the violating contractor, subcontractor, or agent does not 11.32comply with the department's assessment within 20 days of receipt of written notification, 11.33the department shall notify the contracting authority to withhold from any payment due to 11.34the contractor a reasonable amount to ensure compliance with the department's assessment. 11.35The contracting authority shall require adherence to the department's assessments by the 11.36contractor. The contracting authority shall report back to the commissioner when the 12.1contractor complies with the commissioner's findings and assessment. After 60 days of 12.2written notification, the commissioner shall deem any unpaid department assessment as an 12.3unresolved violation of this section and handle as required under subdivision 6a.12.4    If a contractor is deemed to be insolvent by the commissioner, the contracting 12.5authority shall deduct the department's assessed amount from funds owed the contractor or 12.6assess the bonding company for department's assessment.12.7    Subd. 6a.Prevailing wage rate violations.(a) All contracting authorities shall 12.8monitor compliance with sections 177.41 to 177.46 on all contracts funded in whole or in 12.9part with state funds. The contracting authority shall interview employees working on 12.10the project during working hours. The contracting authority shall randomly review the 12.11weekly certified payrolls, subcontract agreements, project documentation, and employee 12.12interviews to determine if the contractor has demonstrated compliance with this section. 12.13The contracting authority has authority to request all records relating to the hours of work, 12.14wages paid, or cost of providing fringe benefits, to laborers and mechanics performing 12.15work under a contract to determine compliance with sections 177.41 to 177.46. The 12.16contracting authority shall hold confidential any written or verbal complaint of violation of 12.17this section filed by a laborer or mechanic or filed on behalf of a laborer or mechanic. The 12.18contracting authority shall notify the contractor in writing of any violations of this section. 12.19The contracting authority shall report any unresolved violations of this section to the 12.20commissioner of labor and industry after 20 days of a written notification to the contractor 12.21to resolve the violations, or the contracting authority has knowledge that it is the violating 12.22contractor's, subcontractor's, or agent's second offense of a similar nature. The contracting 12.23authority shall not close a contract with any unresolved violations of this section.12.24    The commissioner of labor and industry is required to report any unresolved 12.25violations within 60 days of written notification to the contractor, any willful violations of 12.26this section, or second offense violations of a similar nature, to both the county attorney 12.27where the alleged violation occurred and to the attorney general for criminal prosecution.12.28    (b) A county attorney shall notify the commissioner of labor and industry and the 12.29attorney general upon commencing an action for a violation of this section. The county 12.30attorney shall also give notice to the commissioner and the attorney general of the outcome 12.31of the action, including detailed reasons for the dismissal or settlement of an action 12.32pursuant to a plea agreement that awards less than the maximum penalties for a violation 12.33of this section. The commissioner shall notify the contracting authority.12.34    (c) If the attorney general does not receive notice of the commencement of an action 12.35by a county attorney, as required by paragraph (b), within six months of receiving a report 12.36under paragraph (a) from the commissioner of labor and industry, the attorney general shall 13.1pursue the suspected violation, unless the attorney general and commissioner agree that 13.2civil enforcement will be sufficient to effectuate the policies of sections 177.41 to 177.46.13.3    Subd. 7. Applicability. This section does not apply to a contract, or work under 13.4a contract, under which:13.5    (1) the estimated total cost of completing the project is less than $2,500 and only one 13.6trade or occupation is required to complete it, or13.7    (2) the estimated total cost of completing the project is less than $25,000 and more 13.8than one trade or occupation is required to complete it.13.9    Subd. 8.Fringe benefit programs.The prevailing wage rate shall be paid for all 13.10hours worked on the project. The contractor, subcontractor, or agent may take credit 13.11toward the prevailing wage rate for the recovery of the costs of providing bona fide 13.12fringe benefits that have been approved by the commissioner prior to working on a 13.13contract subject to this section and deemed a direct benefit to the laborer or mechanic. 13.14The contractor, subcontractor, or agent shall not take credit for the company's incurred 13.15administrative costs of providing a bona fide fringe benefits program or the costs of legally 13.16required plans or insurance including but not limited to workers' compensation and 13.17unemployment insurance, as well as program or plan costs deemed by the commissioner 13.18to be incurred for the benefit of the contractor, subcontractor, or agent.13.19    The contributions irrevocably made by the employer to a trustee or third party 13.20pursuant to bona fide fringe benefit fund, plan, or program may be deducted from the 13.21prevailing wage rate, including the reasonable anticipated costs made to a legally 13.22enforceable financially responsible employer plan or program. All programs shall be 13.23communicated in writing to the employee prior to working on the project.13.24    Contributions to plans or programs must be made on a regular basis, not less often 13.25than quarterly. The costs of providing the benefit plan or program must be annualized. 13.26Contributions made to a plan or program for government work cannot fund the plan for 13.27periods of nongovernment work.13.28    The laborer or mechanic must have an opportunity to receive the benefit; credit will 13.29not be given costs deducted from laborers or mechanics that are not eligible to receive 13.30the benefit. A laborer or mechanic cannot pay the costs of providing a fringe benefit 13.31for another laborer or mechanic.13.32    Bonuses are not considered a fringe benefit as they are paid in the future and the 13.33laborer or mechanic must be paid unconditionally weekly the full amount owed without 13.34any rebate. Transportation, board, and lodging are not considered a fringe benefit as 13.35it is a properly reimbursable expense of the employer and incurred for the employer's 14.1benefit. Company vehicles are not considered a fringe benefit as it is to the advantage of 14.2the contractor.14.3    The remainder of the prevailing wage rate after the costs for bona fide fringe benefits 14.4have been deducted shall be the taxable hourly wage rate paid to the employee for regular 14.5hours worked and used as the basis for calculating overtime rates of pay. The amount 14.6deducted for fringe benefit costs on a project may not reduce the taxable hourly wage rate 14.7below the laborer's or mechanic's regular rate of pay. A contractor may not reduce the rate 14.8of pay of the laborer or mechanic on nonprevailing wage work as a result of the laborer or 14.9mechanic having performed work for which payment of prevailing wage is required.14.10    Nothing in this section shall supersede provisions of any collective bargaining 14.11agreement or the provisions of the Employment Retirement Income Security Act.14.12    Subd. 9.Keeping records, penalty.Every employer subject to sections 177.41 to 14.13177.46 must make and keep a record of:14.14    (1) the name, address, Social Security number, and classification of each laborer 14.15or mechanic;14.16    (2) the hourly rate of pay, and the amount paid each pay period on both public and 14.17private work to each laborer or mechanic;14.18    (3) the hours and classifications worked each day and each work week on both 14.19public and private work by the laborer or mechanic;14.20    (4) fringe benefit program information, costs, and disbursements made on behalf of a 14.21laborer or mechanic; and14.22    (5) other information the commissioner finds necessary and appropriate to enforce 14.23sections 177.41 to 177.46.14.24    The records shall be kept in or near the employer's main business location for three 14.25years after the contract is closed on the project worked. The commissioner may fine 14.26a contractor, subcontractor, or agent up to $1,000 for each failure to maintain records 14.27as required by this section. This penalty is in addition to any penalties provided under 14.28section 177.43 or 177.46.14.29    Sec. 11. Minnesota Statutes 2006, section 177.44, is amended to read:14.30177.44 HIGHWAYTRANSPORTATION CONTRACTS; HOURS OF LABOR; 14.31WAGE RATES; PENALTY.14.32    Subdivision 1. Hours, wages permitted. A laborer or mechanic employed by a 14.33contractor, subcontractor, agent, or other person doing or contracting to do all or part 14.34of the work under a contract based on bids as provided in Minnesota Statutes 1971, 14.35section 
         161.32, to which the state is a party, or for contracts for which the Department 15.1of Transportation has a delegation of authority to be the contracting authority, or for 15.2contracts that the Department of Transportation oversees under its authority to oversee 15.3constitutionally mandated state funding to other local governmental bodies, or units of 15.4government, or political subdivisions that are the contracting authority, for the construction 15.5or maintenance of a highway or other public work projects, may not be permitted or 15.6required to work longer than the prevailing hours of labor unless the laborer or mechanic 15.7is paid for all hours in excess of the prevailing hours at a rate of at least 1-1/2 times the15.8taxable hourly basic rate of pay of paid to the laborer or mechanic for the work performed 15.9on the project. The laborer or mechanic must be paid at least unconditionally and not 15.10less often than on a weekly basis and shall not be paid a lesser rate of wages than the 15.11prevailing wage rate in the same or most similar trade or occupation in the area. The costs 15.12of providing fringe benefit programs as defined in section 177.43, subdivision 8, to the 15.13laborers or mechanics working on the project may be deducted from the total prevailing 15.14wage rate. Contractors, subcontractors, agents, or other persons performing work under 15.15the contract must maintain records as defined in section 177.43, subdivision 9.15.16    The contractor, subcontractor, or agent shall not exceed their company apprenticeship 15.17ratio established by a certified or registered program on any project subject to this section.15.18    Subd. 2. Applicability Exceptions. This section does not apply to wage rates and 15.19hours of employment of laborers or mechanics engaged in the processing or manufacture 15.20of materials or products, or to the delivery of materials or products by or for commercial 15.21establishments which have a fixed place of business from which they regularly supply 15.22the processed or manufactured materials or products. This section applies to laborers 15.23or mechanics who deliver mineral aggregate such as sand, gravel, or stone which is 15.24incorporated into the work under the contract by depositing the material substantially in 15.25place, directly or through spreaders, from the transporting vehicle.15.26    Subd. 3. Investigations by Department of Labor and Industry. The Department 15.27of Labor and Industry shall conduct investigations and hold public hearings necessary 15.28to define classes of laborers and or mechanics and to determine the hours of labor and 15.29wage rates prevailing in all areas of the state for all classes of labor and laborers or15.30mechanics commonly employed in highway, heavy, or building construction work, so as 15.31to determine prevailing hours of labor, prevailing wage rates, and hourly basic rates of 15.32pay. If a contract contains multiple types of construction work, the contract must contain 15.33all appropriate wage determinations and the laborer or mechanic must be paid at a rate 15.34for all hours worked under the type of work performed on the project. The contractors, 15.35subcontractors, and agents and Department of Transportation and other contracting 15.36authorities must apply the classification definitions certified by the commissioner of labor 16.1and industry to the laborers or mechanics working on the project. Missing classifications, 16.2classification disputes, and other questions arising from the interpretations of this section 16.3must be resolved by the commissioner of labor and industry as specified in section 177.43, 16.4subdivision 4.16.5    The Department commissioner of labor and industry shall determine the nature of 16.6the equipment furnished by truck drivers who own and operate trucks on contract work to 16.7determine minimum rates for the equipment, and shall establish by rule minimum rates 16.8to be computed into the prevailing wage rate. The contracting agency must incorporate 16.9the minimum rates into its contracts for bid. The contractor, subcontractor, or agent must 16.10pay the minimum rate established by the commissioner of labor and industry directly 16.11to the person who owns and operates the truck without any deductions or rebates. The 16.12contracting authority must receive evidence from the contractor, subcontractor, or agent 16.13that the proper minimum rate has been paid to the person who owns and operates the truck 16.14in a form approved by the Department of Transportation.16.15    Subd. 4. Certification of hours and rate. The commissioner of labor and industry 16.16shall at least once a year certify the prevailing hours of labor, the prevailing wage rate, 16.17and the hourly basic rate of pay for all classes of laborers and or mechanics referred to 16.18in subdivision 3 in each area. The certification must also include future hours and rates 16.19when they can be determined for classes of laborers and or mechanics in an area. The 16.20certification must specifically state the effective dates of future hours and rates when they 16.21are certified. If a construction project extends into more than one area there shall be only 16.22one standard of hours of labor and wage rates for the entire project, all applicable area 16.23wage determinations must be contained in the contract and the hours of labor and wage 16.24rates paid the laborer or mechanic must be specific to the areas in which the work is 16.25performed. A person aggrieved by a final determination of the commissioner may petition 16.26the commissioner for reconsideration of findings within 20 days of the publication or 16.27decision. A person aggrieved by a decision of the commissioner after reconsideration may 16.28within 20 days after the decision petition the commissioner for a public hearing as in a 16.29contested case under sections 
         14.57 to 
         14.61. If the commissioner finds that a change in 16.30the certified prevailing hours of labor, prevailing wage rate, and the hourly basic rate of 16.31pay for a class of laborers or mechanics in any area is required, the commissioner may at 16.32any time certify that change and the certified change is effective on a project advertised 16.33for bid on or after the date of certification. 16.34    Subd. 5. Hours and rates to be posted. The prevailing hours of labor, the 16.35prevailing wage rates, the hourly basic rates of pay, and classifications for all labor as 16.36certified by the commissioner must be specifically stated in the proposals and contracts 17.1for each highway construction contract to which the state is a party. transportation 17.2contract which is funded in whole or in part with state funds. In addition to the wage 17.3determinations issued by the Department of Labor and Industry, the contracting authority 17.4must incorporate into its proposals and contracts the contract language provided by the 17.5commissioner of transportation to notify the contractor of the application of sections 17.6177.41 to 177.46. Failure to incorporate the proper determination into the contracts makes 17.7the contracting authority liable for making the contractor whole for the increases in the 17.8wages paid, including employment taxes and reasonable administrative costs based on the 17.9increased wages, to the laborers or mechanics working on the project. The contracting 17.10authority is authorized to incorporate into the bid documents for each project a compliance 17.11monitoring surcharge provision. The surcharge shall be a percentage of the engineer's 17.12estimate of the project. The surcharge percentage shall be either an amount set annually 17.13by the commissioner for all projects after investigation to determine the expected costs 17.14of monitoring compliance, or an amount requested by the contracting authority and 17.15authorized by the commissioner, and will be a percentage sufficient, to pay the estimated 17.16cost to the contracting authority of monitoring compliance with sections 177.41 to 177.46. 17.17The surcharge shall be incorporated into the contract for the project and paid by the 17.18contractor to the contracting authority within two weeks of the payment by the contracting 17.19authority of the mobilization cost for the project as specified in the successful bid. The 17.20contracting authority shall use this surcharge exclusively to defray costs of monitoring 17.21compliance with sections 177.41 to 177.46.17.22    These hours, rates, and classifications, together with the name of the project engineer 17.23or agency contact person, telephone number, project identification numbers, and a 17.24summary of the provisions of subdivision 6, and a summary of section 177.46, must be 17.25kept posted directly on the project by the employer contractor in at least one conspicuous 17.26place and accessible location for the information of employees all laborers or mechanics17.27working on the project. The contracting authority must ensure the contractor keeps the 17.28required information on the project from the start of work until all work is completed 17.29on the project.17.30    Subd. 6. Penalties Penalties: criminal, civil, and debarment.(a) It is a violation 17.31for an officer or employee of the state or contracting authority to knowingly execute 17.32a contract for a project without the wage determination or contract language provided 17.33by the commissioner of transportation on the application of this section, or knowingly 17.34close a contract with violations of this section or assessments by the commissioner of 17.35transportation. A violation may be subject to the penalties under section 609.43.18.1    A contractor, subcontractor, or agent who violates this section is guilty of a gross18.2misdemeanor for the first conviction of a criminal offense under this section and may18.3must be fined for each violation not more than $300 $3,000 or imprisoned not more than 18.490 days one year or both, and required to reimburse the county attorney or attorney 18.5general for the cost of prosecution. Each day that the violation continues is a separate 18.6offense. It is a felony for the second criminal conviction of a contractor, subcontractor, 18.7or agent for violations of this section, or for a criminal conviction of a total unpaid back 18.8wage assessment by the commissioner of transportation against the violating contractor, 18.9subcontractor, or agent in excess of $100,000, and must be fined for the violation not more 18.10than $10,000, or imprisoned no more than five years, or both, and required to reimburse 18.11the county attorney or the attorney general for the cost of prosecution. Each day that the 18.12violation continues is a separate offense.18.13    Whoever induces a job applicant or employee on any project subject to this section 18.14to give up or forego any part of the wages to which entitled under the contract governing 18.15the project by threat not to employ, by threat of dismissal from employment, or by any 18.16other means, or knowingly alters official company employment or time records to falsely 18.17report the employee's pay, may be fined not exceeding $1,000 $3,000 or imprisoned not 18.18more than one year, or both. Each day that the violation continues is a separate offense.18.19    Any employee under this section who knowingly permits the contractor or,18.20subcontractor, or agent to pay less than the prevailing wage rate set forth in the contract, 18.21or who gives up any part of the compensation to which entitled under the contract, may 18.22be fined not exceeding $40 or imprisoned not more than 30 days, or both. Each day any 18.23violation of this paragraph continues is a separate offense.18.24    In addition to or instead of criminal prosecution under this subdivision, the 18.25commissioner of transportation may engage in any civil enforcement actions authorized 18.26by this section or section 177.45.18.27    (b) Penalties to be assessed by the contracting authorities. The contracting authority 18.28may deduct from what is owed the contractor on the project for civil penalties and 18.29assessments as defined by this section and provisions of section 177.44.18.30    (1) After written notification by the contracting authority, a civil penalty of $100 18.31per day shall be assessed against the contractor for each day work is performed on the 18.32project and the poster board is not placed or maintained on the project work site at a 18.33location acceptable to the contracting authority.18.34    (2) After written notification by the contracting authority, a civil penalty of $100 per 18.35week against the contractor for each week the contractor's certified payrolls or any of the 18.36individual subcontractor or agent-certified payrolls are not submitted.19.1    (3) After written notification by the contracting authority, a civil penalty of $50 per 19.2week shall be assessed against the contractor for each week that the subcontractor or agent 19.3forms as defined in section 177.44, subdivision 7, are not submitted.19.4    (4) After written notification by the contracting authority, a civil penalty of $100 19.5may be assessed against the contractor for each week the approved trucking form as 19.6described in section 177.44, subdivision 3, is not submitted.19.7    (c) A contractor, subcontractor, or agent that is convicted criminally or held liable 19.8civilly under this section must be debarred by the commissioner of transportation under 19.9section 161.315 from working on any contracts funded in whole or in part with state funds 19.10as a contractor, subcontractor, agent, or material supplier for a period of at least one year 19.11and not more than three years. The commissioner of transportation shall report a debarred 19.12entity to the commissioner of labor and industry for publication. If any contracting 19.13authority has debarred an entity for prevailing wage violations, the contracting authority 19.14must report the debarment to the commissioner of labor and industry. All contracting 19.15authorities are required to review the list of debarred entities and may not contact with a 19.16debarred entity or allow a debarred entity to work on any project as a subcontractor, 19.17material supplier, or in any other capacity.19.18    Subd. 7. Department of Transportation to enforce. The Department of 19.19Transportation shall require adherence to this section. The commissioner of transportation 19.20may demand and every contractor and subcontractor shall furnish copies of payrolls. all 19.21sections relating to sections 177.41 to 177.46 on active project contracts for which the 19.22Department of Transportation is the contracting authority, or on active contracts that 19.23the commissioner of transportation has been delegated authority to be the contracting 19.24authority, or on active contracts that the commissioner of transportation has been delegated 19.25authority to be the contracting authority, or on active contracts that the commissioner 19.26of transportation has authority to oversee the distribution of constitutional mandated 19.27state funding to other local governmental bodies, or units of government, or political 19.28subdivisions who act as the contracting authority. The Department of Transportation 19.29shall maintain a staff of at least five investigators to ensure compliance on the projects. 19.30The commissioner of transportation or contracting authority shall hold confidential any 19.31complaint filed by a laborer or mechanic or filed on behalf of a laborer or mechanic.19.32    The contracting authority must require weekly submittal of certified payrolls from 19.33every contractor and subcontractor or agent performing work under the contract. The 19.34contractor must submit certified payrolls for the contractor's own workforce along with 19.35payrolls from all subcontractors and agents working on the project. The contracting 19.36authority must maintain the payrolls under the contracting agency's normal record 20.1retention schedules for a minimum of two years past the closing of the contract. Each 20.2contracting authority must redact the Social Security number and address of each laborer 20.3or mechanic from each certified payroll before any person other than an employee of the 20.4contracting authority, the Department of Transportation, or the Department of Labor and 20.5Industry is allowed to review the certified payroll. Certified payrolls must be submitted 20.6within one week after the week ending date of the week in which the work was performed. 20.7Each subcontractor or agent must furnish to the contractor weekly certified payrolls that 20.8demonstrate compliance with this section. The commissioner of transportation may 20.9deduct from what is owed the contractor on the project or after written notification, any 20.10other state-funded projects under the commissioner of transportation's authority that the 20.11contractor is working on, any penalties or back wage assessments. The contracting 20.12authority may deduct from what is owed the contractor on the project for civil penalties 20.13and assessments for violations on the project. The contracting authority shall interview 20.14laborers or mechanics on the project site and shall randomly review the weekly certified 20.15payrolls, subcontract agreements, project documentation, and employee interviews if the 20.16contractor has demonstrated compliance with this section. The contracting authority 20.17has authority to request all records relating to the hours of work, wages paid, or cost of 20.18providing fringe benefits, to laborers and mechanics performing work under a contract 20.19to determine compliance with sections 177.41 to 177.46. In addition, the contractor 20.20may interview all laborers or mechanics on the project and review subcontractor or 20.21agents' payroll information to ensure compliance with this section. If a contracting 20.22authority is unable to achieve or determine compliance on a project, the commissioner of 20.23transportation must be notified in writing of the problems or violations.20.24    The contractor must incorporate into all subcontract agreements, purchase orders, or 20.25other written agreements which provide for work covered by this section the contract wage 20.26determination and the contract language provided by the commissioner of transportation 20.27contained in the contract. The contractor must also ensure that all secondary subcontract 20.28agreements, purchase orders, or other written agreements which provide for work covered 20.29by this section contain the same language. The contractor must provide a written certified 20.30confirmation on a form provided by the contracting authority that all subcontractors and 20.31agents have received the required contract wage determinations and contract language. 20.32The form must be provided to the contracting authority prior to any subcontractor or agent 20.33working on the project. If the contractor does not provide the information required to the 20.34subcontractor or agents, or the form to the contracting authority, the contractor must be the 20.35sole entity responsible for any contracting authority or commissioner's assessment.21.1    The commissioner of transportation may examine all business, employment, 21.2and time records and other documents relating to hours of work and the wages paid 21.3laborers and or mechanics on work to which considered necessary by the commissioner 21.4of transportation to ensure compliance with this section applies. Upon request of the 21.5Department of Transportation or upon complaint of alleged violation, the county attorney 21.6of the county in which the work is located shall investigate and prosecute violations in a 21.7court of competent jurisdiction.21.8    If the commissioner of transportation determines that a violation has occurred, the 21.9commissioner of transportation shall determine the amount of back wages owed to the 21.10affected laborer or mechanic, plus a civil penalty equal to 100 percent of the back wages 21.11owed, to be paid to the affected laborer or mechanic, and an additional civil penalty equal 21.12to 100 percent of the back wages owed to be paid to the commissioner of transportation 21.13and to be deposited into a dedicated fund to be used by the Department of Transportation 21.14for future prevailing wage enforcement, educational, and outreach programs and assess 21.15the total amount of back wages owed and penalties against the violating contractor, 21.16subcontractor, or agent accordingly. If there is a determination that a violation has 21.17occurred, the commissioner of transportation may investigate all other open and closed 21.18contracts, requiring payment of prevailing wages, on which that contractor, subcontractor, 21.19or agent performed any work within the previous two years.21.20    (1) For investigations on projects where the contracting authority is the Department 21.21of Transportation, the project engineer and contractor must be notified in writing of the 21.22violations and determination of assessments. If the violating contractor, subcontractor, or 21.23agent does not comply with the commissioner of transportation's assessment within 20 21.24days of written notification, the commissioner of transportation must cause to be withheld 21.25from any money owed the contractor by the Department of Transportation a reasonable 21.26amount to ensure compliance with the assessments.21.27    (2) For investigations where the contracting authority is a local governmental body 21.28or political subdivision of the state, the commissioner of transportation shall notify in 21.29writing the contracting authority and the contractor of the violations and determination of 21.30assessments and the contracting authority shall withhold a reasonable amount to ensure 21.31compliance with the commissioner of transportation's determination. The contracting 21.32authority must require adherence to the commissioner of transportation's assessment.21.33    After 60 days of written notification, the commissioner of transportation shall 21.34consider the unpaid assessment as an unresolved violation of this section. The 21.35commissioner of transportation shall report any unresolved violations, willful violations, 21.36or second offense violations of a similar nature, of this section to both the county attorney 22.1where the alleged violation occurred and to the attorney general. A county attorney shall 22.2notify the commissioner of transportation and the attorney general upon commencing an 22.3action for a violation of this section. The county attorney shall also give notice to the 22.4commissioner of transportation and the attorney general of the outcome of the action, 22.5including detailed reasons for the dismissal or settlement of an action pursuant to a plea 22.6agreement that awards less than the maximum penalties for a violation of this section. The 22.7commissioner of transportation shall notify the contracting authority.22.8    If the attorney general does not receive notice of the commencement of an action 22.9by a county attorney, as required by this subdivision, within six months of receiving 22.10an unresolved violation report from the commissioner of transportation, the attorney 22.11general shall pursue the suspected violation in a court of competent jurisdiction, unless the 22.12attorney general and commissioner of transportation agree that civil enforcement will be 22.13sufficient to effectuate the policies of sections 177.41 to 177.46.22.14    Sec. 12. [177.45] INVESTIGATIONS AND SUBPOENAS.22.15    Subdivision 1.General powers.For the purposes of this section, "commissioner" 22.16means the commissioner of labor and industry with respect to duties and responsibilities 22.17entrusted to the commissioner of labor and industry by sections 177.41 to 177.46, and 22.18the commissioner of transportation with respect to duties and responsibilities entrusted to 22.19the commissioner of transportation by sections 177.41 to 177.46. In connection with the 22.20duties and responsibilities entrusted to each commissioner pursuant to sections 177.41 to 22.21177.46, each commissioner may:22.22    (1) conduct investigations necessary to determine whether any person has violated 22.23or is about to violate this section;22.24    (2) require or permit any person to file a statement in writing, under oath, or 22.25otherwise as the commissioner determines, as to all the facts and circumstances concerning 22.26the matter being investigated;22.27    (3) hold hearings, upon reasonable notice, in respect to any matter arising out of the 22.28duties and responsibilities entrusted to the commissioner;22.29    (4) conduct investigations and hold hearings for the purpose of compiling 22.30information related to the duties and responsibilities entrusted to the commissioner;22.31    (5) examine the books, accounts, records, and files of every contractor, subcontractor, 22.32or agent and of every person who is engaged in work under a contract subject to sections 22.33177.41 to 177.46; the commissioner or a designated representative must have free access 22.34during normal business hours to the offices and places of business of the person, and to 23.1all books, accounts, papers, records, files, safes, and vaults maintained in the place of 23.2business; and23.3    (6) publish information that is contained in any order issued by the commissioner.23.4    Subd. 2.Response to department requests.A contractor, subcontractor, 23.5agent, or other person performing work under a contract subject to the jurisdiction of 23.6the commissioner must comply with requests for information, documents, or other 23.7requests from the department within the time specified in the request, or, if no time is 23.8specified, within 30 days of the mailing of the request by the department. A contractor, 23.9subcontractor, agent, or other person subject to the jurisdiction of the commissioner must 23.10appear before the commissioner or the commissioner's representative when requested to 23.11do so and bring all documents or materials that the commissioner or the commissioner's 23.12representative has requested.23.13    Subd. 3.Power to compel production of evidence.For the purpose of any 23.14investigation, hearing, proceeding, or inquiry related to the duties and responsibilities 23.15entrusted to the commissioner, the commissioner or a designated representative may 23.16administer oaths and affirmations, subpoena witnesses, compel attendance, take evidence, 23.17and require the production of books, papers, correspondence, memoranda, agreements, 23.18or other documents or records that the commissioner considers relevant or material 23.19to the inquiry.23.20    Subd. 4.Court orders.In case of a refusal to appear or a refusal to obey a subpoena 23.21issued to any person, the district court, upon application by the commissioner, may issue 23.22to any person an order directing that person to appear before the commissioner or the 23.23officer designated by the commissioner and produce documentary evidence if so ordered 23.24or give evidence relating to the matter under investigation or in question. Failure to obey 23.25the order of the court may be punished by the court as a contempt of court.23.26    Subd. 5.Scope of privilege.No person is excused from attending and testifying 23.27or from producing any document or record before the commissioner or from obedience 23.28to the subpoena of the commissioner or any officer designated by the commissioner or 23.29in a proceeding instituted by the commissioner, on the ground that the testimony or 23.30evidence required may tend to incriminate that person or subject that person to a penalty 23.31of forfeiture. No person may be prosecuted or subjected to a penalty or forfeiture for or 23.32on account of a transaction, matter, or thing concerning which the person is compelled, 23.33after claiming the privilege against self-incrimination, to testify or produce evidence, 23.34documentary or otherwise, except that the individual is not exempt from prosecution and 23.35punishment for perjury or contempt committed in testifying.24.1    Subd. 6.Compliance orders.The commissioner may issue an order requiring a 24.2contractor, subcontractor, or agent to comply with an assessment issued by an investigator 24.3pursuant to section 177.43 or 177.44. The department shall serve the order upon the 24.4contractor, subcontractor, or agent, or the party's authorized representative, in person 24.5or by certified mail at the contractor's, subcontractor's, or agent's place of business. A 24.6contractor, subcontractor, or agent who wishes to contest the order must file written notice 24.7of objection to the order with the commissioner within 15 calendar days after being served 24.8with the order. A contested case proceeding must then be held according to sections 14.57 24.9to 14.69. If, within 15 calendar days after being served with the order, the contractor, 24.10subcontractor, or agent fails to file a written notice of objection with the commissioner, the 24.11order becomes a final order of the commissioner.24.12    Subd. 7.Contractor, subcontractor, or agent liability.If the commissioner issues 24.13a compliance order under subdivision 6, the commissioner shall order the contractor, 24.14subcontractor, or agent to cease and desist from engaging in the violative practice and 24.15to take such affirmative steps that in the judgment of the commissioner will effectuate 24.16the purposes of the section violated. The commissioner shall order the contractor, 24.17subcontractor, or agent to pay the assessed amounts to the department and the department 24.18shall distribute to the affected laborers or mechanics the portions of the assessment 24.19designated for the laborer or mechanic. Any contractor, subcontractor, or agent that is 24.20found by the commissioner to have repeatedly or willfully violated a section or sections 24.21identified in subdivision 6 shall be subject to a civil penalty of up to $1,000 for each 24.22violation for each laborer or mechanic. In determining the amount of a civil penalty 24.23under this subdivision, the appropriateness of the penalty to the size of the contractor's, 24.24subcontractor's, or agent's business and the gravity of the violation shall be considered. 24.25In addition, the commissioner may order the contractor, subcontractor, or agent to 24.26reimburse the department and the attorney general for all appropriate litigation and hearing 24.27costs expended in preparation for and in conducting the contested case proceeding, 24.28unless payment of costs would impose extreme financial hardship on the contractor, 24.29subcontractor, or agent. If the contractor, subcontractor, or agent is able to establish 24.30extreme financial hardship, then the commissioner may order the contractor, subcontractor, 24.31or agent to pay a percentage of the total costs that will not cause extreme financial 24.32hardship. Costs include but are not limited to the costs of services rendered by the attorney 24.33general, attorneys for the department, private attorneys if engaged by the department, 24.34administrative law judges, court reporters, expert witnesses, and the cost of transcripts. 24.35Interest shall accrue on and be added to the unpaid balance of a commissioner's order from 24.36the date the order is signed by the commissioner until it is paid, at an annual rate provided 25.1in section 549.09, subdivision 1, paragraph (c). The commissioner may establish escrow 25.2accounts for purposes of distributing damages.25.3    Subd. 8.Civil actions.The commissioner may bring an action in the district court 25.4where a contractor, subcontractor, or agent resides or where the commissioner maintains 25.5an office to enforce or require compliance with orders issued under subdivision 6 or 7.25.6    Subd. 9.Legal actions; injunctions.Whenever it appears to the commissioner that 25.7a person has engaged or is about to engage in any act or practice constituting a violation of 25.8this section or order related to the duties and responsibilities entrusted to the commissioner, 25.9the commissioner may bring an action in the name of the state in Ramsey County District 25.10Court or the district court of an appropriate county to enjoin the acts or practices and to 25.11enforce compliance, or the commissioner may refer the matter to the attorney general or 25.12the county attorney of the appropriate county. A permanent injunction or other appropriate 25.13relief must be granted based solely upon a showing that the person has engaged or is about 25.14to engage in an act or practice constituting a violation of a law, rule, or order related to the 25.15duties and responsibilities entrusted to the commissioner. The terms of this subdivision 25.16govern an action brought under this subdivision, including an action against a person who, 25.17for whatever reason, claims that the subject law, rule, or order does not apply to the person.25.18    Subd. 10.Powers additional.The powers contained in sections 177.41 to 177.46 25.19are in addition to all other powers of the commissioner of labor and industry, commissioner 25.20of transportation, and any contracting authority.25.21    Sec. 13. [177.46] COURT ACTIONS; PRIVATE PARTY CIVIL ACTIONS.25.22    Subdivision 1.Civil action; damages.A laborer or mechanic may bring a civil 25.23action seeking redress for violations of sections 177.41 to 177.46 directly to district court. 25.24A contractor, subcontractor, or agent who is found to have violated sections 177.41 to 25.25177.46 is liable to the aggrieved party for all unpaid wages. A contractor, subcontractor, 25.26or agent who is found to have violated sections 177.41 to 177.46 is also liable for 25.27compensatory damages, interest on the unpaid wages at the statutory rate, liquidated 25.28damages equal to three times the wages owed, punitive damages for repeated or willful 25.29violations, and any other appropriate relief including, but not limited to, injunctive relief. 25.30The contracting authority must provide the laborer or mechanic bringing the action any 25.31and all requested project records, including certified payrolls with Social Security numbers 25.32and employee addresses redacted, after written notice, and that has been deemed to be a 25.33public record, at a reasonable cost.25.34    Subd. 2.District court jurisdiction.An action brought under subdivision 1 may be 25.35filed in the district court of the county where a violation is alleged to have been committed, 26.1where the respondent resides or has a principal place of business, where the contracting 26.2authority has its main office, or any other court of competent jurisdiction.26.3    Subd. 3.Persons who may sue.An action authorized by this section may be 26.4maintained against any contractor, subcontractor, or agent by any one or more laborers 26.5or mechanics for and on behalf of themselves and other laborers or mechanics similarly 26.6situated. No laborer or mechanic must be a party plaintiff to any action authorized by this 26.7section unless the laborer or mechanic gives consent in writing to become a party and the 26.8consent is filed in the court in which the action is brought.26.9    Subd. 4.Discovery allowed.Upon request, a contractor, subcontractor, or agent 26.10against whom an action authorized by this section is brought, must provide to any plaintiff 26.11records kept in the normal course of its business that show all laborers or mechanics 26.12working on the project including the last known address, hours worked, classifications 26.13worked, and wages and benefits paid for the work performed, with Social Security 26.14numbers redacted from those records. The records must be provided without court 26.15order. If a contractor, subcontractor, or agent refuses to provide this information without 26.16court order, the court must include in the order a provision requiring the contractor, 26.17subcontractor, or agent to pay the reasonable attorney fees and costs incurred by the 26.18laborer or mechanic in bringing a motion for the court order.26.19    Subd. 5.Attorney fees and costs.In an action brought under subdivision 1, the 26.20court shall order any entity who is found to have committed a violation to pay to the 26.21aggrieved party reasonable costs, disbursements, witness fees, and attorney fees.26.22    Subd. 6.Civil penalty.In an action brought under subdivision 1, the court shall 26.23order any entity who is found to have committed a violation to pay a civil penalty equal 26.24to 100 percent of the total damages awarded to all plaintiffs in the action, including the 26.25fees and costs awarded under subdivision 5, to the commissioner of labor and industry 26.26or the commissioner of transportation whichever agency is responsible for enforcement 26.27with respect to the project to be deposited into a dedicated fund to be used in future 26.28enforcement efforts of sections 177.43 and 177.44.26.29    Sec. 14. Minnesota Statutes 2006, section 471.345, is amended by adding a subdivision 26.30to read:26.31    Subd. 20.Debarred entities.Notwithstanding any other provision of this section, 26.32municipalities must comply with sections 177.43 and 177.44 with respect to awarding any 26.33contracts subject to sections 177.41 to 177.46.