SF 1848

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to employment; changing certain requirements concerning contractors;
modifying prevailing wage provisions; imposing penalties; amending Minnesota
Statutes 2006, sections 16C.03, subdivision 2; 161.315, subdivisions 1, 2;
177.27, subdivisions 1, 4, 8, 9, 10; 177.42; 177.43; 177.44; 471.345, by adding a
subdivision; 574.26, subdivision 2; 574.31, subdivision 2; proposing coding for
new law in Minnesota Statutes, chapter 177.

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

Section 1.

Minnesota Statutes 2006, section 16C.03, subdivision 2, is amended to read:

Subd. 2.

Rulemaking authority.

Subject to chapter 14, the commissioner may
adopt rules, consistent with this chapter and chapter 16B, relating to the following topics:

(1) solicitations and responses to solicitations, bid security, vendor errors, opening
of responses, award of contracts, tied bids, and award protest process;

(2) contract performance and failure to perform;

(3) authority to debar or suspend vendors new text begin from performing any work under a contract
as a prime contractor, subcontractor, agent, or material supplier on any contracts funded in
whole or in part with state funds new text end , and reinstatement of vendors;

(4) contract cancellation;

(5) procurement from rehabilitation facilities; and

(6) organizational conflicts of interest.

Sec. 2.

Minnesota Statutes 2006, section 161.315, subdivision 1, is amended to read:

Subdivision 1.

Legislative intent.

Recognizing that the preservation of the integrity
of the public contracting process of the Department of Transportation is vital to the
development of a balanced and efficient transportation system and a matter of interest to
the people of the state, the legislature hereby determines and declares that:

(1) the procedures of the department for bidding and awarding department contracts
exist to secure the public benefits of free and open competition and to secure the quality of
public works;

(2) the opportunity to be awarded department contracts or to supply goods or
services to the department is a privilege, not a right; and

(3) the privilege of transacting business with the department or local road authority
should be denied to persons convicted of a contract crime new text begin , or that have committed a serious
contract violation, new text end in order to preserve the integrity of the public contracting process.

Sec. 3.

Minnesota Statutes 2006, section 161.315, subdivision 2, is amended to read:

Subd. 2.

Definitions.

The terms used in this section have the meanings given them
in this subdivision.

(a) "Affiliate" means a predecessor or successor of a person by merger,
reorganization, or otherwise, who is, or that has as an officer or director an individual
who is, a relative of the person or an individual over whose actions the person exercises
substantial influence or control, or a group of entities so connected or associated that one
entity controls or has the power to control each of the other entities. "Affiliate" includes
the affiliate's principals. One person's ownership of a controlling interest in another entity
or a pooling of equipment or income among entities is prima facie evidence that one
entity is an affiliate of another.

(b) "Contract crime" means a violation of state or federal antitrust law, fraud, theft,
embezzlement, bribery, forgery, misrepresentation, making false statements, falsification
or destruction of records, new text begin collusion, new text end or other criminal offense in connection with obtaining,
attempting to obtain, or performing a public or private contract or subcontract new text begin , or other
offense indicating a lack of business integrity new text end .

(c) "Conviction" has the meaning given it in section 609.02, subdivision 5.

(d) "Debar" means to disqualify from receiving a contract or from serving as a
subcontractor or material supplier as provided by Laws 1984, chapter 654, article 2,
section 8.

(e) "Person" means a natural person or a business, corporation, association,
partnership, sole proprietorship, or other entity formed to do business as a contractor,
subcontractor, or material supplier and includes an affiliate of a person.

(f) "Pooling" means a combination of persons engaged in the same business or
combined for the purpose of engaging in a particular business or commercial venture and
who all contribute to a common fund or place their holdings of a given stock or other
security in the hand and control of a managing member or committee of the combination.

(g) "Suspend" means to temporarily disqualify from receiving a contract or from
serving as a subcontractor or material supplier as provided by Laws 1984, chapter 654,
article 2, section 8.

(h) "Relative" means an individual related by consanguinity within the second
degree as determined by the common law, a spouse, or an individual related to a spouse
within the second degree as determined by the common law, and includes an individual in
an adoptive relationship within the second degree as determined by the common law.

new text begin (i) "Serious contract violation" means failure without good cause to perform
according to the specifications, time limits, or any terms or conditions in a contract; a
record of failure to perform or unsatisfactory performance, according to the terms, of more
than one contract as measured by standard commercial practices, not caused by acts
beyond the control of the contractor; or any other cause the commissioner determines to
be serious and compelling including, but not limited to, threatening or abusive behavior,
collusion with other vendors to restrain competition, giving false information on a vendor's
registration application or response to a solicitation, or violating terms of a suspension.
new text end

new text begin (j) "Governmental entity" means the federal government, the state of Minnesota,
or any of its departments, commissions, councils, agencies, political subdivisions,
municipalities, local government bodies, or an agent of any of those entities.
new text end

Sec. 4.

Minnesota Statutes 2006, section 177.27, subdivision 1, is amended to read:

Subdivision 1.

Examination of records.

The commissioner may enter during
reasonable office hours or upon request and inspect the place of business or employment of
any employer of employees working in the state, to examine and inspect books, registers,
payrolls, and other records of any employer that in any way relate to wages, hours, and
other conditions of employment of any employees. The commissioner may transcribe any
or all of the books, registers, payrolls, and other records as the commissioner deems
necessary or appropriate and may question the employees to ascertain compliance with
sections 177.21 to deleted text begin 177.35 deleted text end new text begin 177.46 new text end . The commissioner may investigate wage claims or
complaints by an employee against an employer if the failure to pay a wage may violate
Minnesota law or an order or rule of the department.

Sec. 5.

Minnesota Statutes 2006, 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 deleted text begin 177.35 deleted text end new text begin 177.46 new text end , 181.02, 181.03, 181.031,
181.032, 181.101, 181.11, 181.12, 181.13, 181.14, 181.145, 181.15, and 181.79, or with
any rule promulgated under section 177.28. 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.

Sec. 6.

Minnesota Statutes 2006, section 177.27, subdivision 8, is amended to read:

Subd. 8.

Court actions; suits brought by private parties.

An employee may bring
a civil action seeking redress for a violation or violations of sections 177.21 to directly to district court. An employer who pays an employee less than the wages
and overtime compensation to which the employee is entitled under sections 177.21 to
deleted text begin 177.35 deleted text end new text begin 177.46 new text end is liable to the employee for the full amount of the wages, gratuities, and
overtime compensation, less any amount the employer is able to establish was actually
paid to the employee and for an additional equal amount as liquidated damages. In
addition, in an action under this subdivision the employee may seek damages and other
appropriate relief provided by subdivision 7 and otherwise provided by law. An agreement
between the employee and the employer to work for less than the applicable wage is not
a defense to the action.

Sec. 7.

Minnesota Statutes 2006, section 177.27, subdivision 9, is amended to read:

Subd. 9.

District court jurisdiction.

Any action brought under subdivision 8 may
be filed in the district court of the county wherein a violation or violations of sections
177.21 to are alleged to have been committed, where the respondent resides
or has a principal place of business, or any other court of competent jurisdiction. The
action may be brought by one or more employees.

Sec. 8.

Minnesota Statutes 2006, section 177.27, subdivision 10, is amended to read:

Subd. 10.

Attorney fees and costs.

In any action brought pursuant to subdivision 8,
the court shall order an employer who is found to have committed a violation or violations
of sections 177.21 to to pay to the employee or employees reasonable costs,
disbursements, witness fees, and attorney fees.

Sec. 9.

Minnesota Statutes 2006, section 177.42, is amended to read:

177.42 DEFINITIONS.

Subdivision 1.

Scope.

As used in sections 177.41 to the terms defined
in this section have the meanings given them except where the context indicates otherwise.

Subd. 2.

Project.

"Project" means erection, construction, remodeling, or repairing
of a public building or other public work financed in whole or part by state funds.

Subd. 3.

Area.

"Area" means the county or other locality from which labor for
any project is normally secured.

Subd. 4.

Prevailing hours of labor.

"Prevailing hours of labor" means the hours
of labor per day and per week worked within the area by a larger number of workers of
the same class than are employed within the area for any other number of hours per day
and per week. The prevailing hours of labor may not be more than eight hours per day
or more than 40 hours per week.

Subd. 5.

Hourly basic rate.

"Hourly basic rate" means the new text begin taxable new text end hourly wage
paid to any employee.

Subd. 6.

Prevailing wage rate.

"Prevailing wage rate" means the hourly basic rate
of pay plus the contribution for health and welfare benefits, vacation benefits, pension
benefits, and any other economic benefit new text begin considered by the commissioner to be a direct
benefit to the employee and new text end paid to the largest number of workers engaged in the same
class of labor within the area and includes, for the purposes of section 177.44, rental
rates for truck hire paid to those who own and operate the truck. The prevailing wage
rate may not be less than a reasonable and living wage new text begin , that must be at least two times
the established state minimum wage rate new text end .

new text begin Subd. 7. new text end

new text begin Laborer or mechanic. new text end

new text begin "Laborer or mechanic" includes all workers
performing manual and physical work on the project including, but not limited to, officers,
partners, owners, forepersons, supervisors, and professionals for the time spent performing
the duties of classifications of labor on the project.
new text end

new text begin Subd. 8. new text end

new text begin Contracting authority. new text end

new text begin "Contracting authority" means the state of
Minnesota, a state agency, political subdivision of the state, commission, council, or any
other entity with authority to enter into public works projects, or an agent of any of those
entities, that enters into a contract for a project.
new text end

new text begin Subd. 9. new text end

new text begin Contractor. new text end

new text begin "Contractor" means the individual, firm, corporation, or
other business entity entering into a contract with a contracting authority to complete a
project, either directly or through an authorized representative, and who undertakes the
prosecution of the work prescribed in the contract.
new text end

new text begin Subd. 10. new text end

new text begin Contract. new text end

new text begin "Contract" means the written agreement between the
contracting authority and the contractor setting forth each party's rights and obligations,
including, but not limited to, the performance of the work, type of work, furnishing
of labor and materials, basis of payment, work specifications, and other requirements
contained in the project documents.
new text end

Sec. 10.

Minnesota Statutes 2006, section 177.43, is amended to read:

177.43 CONTRACTS FOR STATE PROJECTS; PENALTY.

Subdivision 1.

Hours of labor.

Any contract which provides for a project must
state that:

(1) no laborer or mechanic employed directly on the project work site by the
contractor or any subcontractor, agent, or other person doing or contracting to do all
or a part of the work of the project, is permitted or required to work more hours than
the prevailing hours of labor unless paid for all hours in excess of the prevailing hours
at a rate of at least 1-1/2 times the new text begin taxable new text end hourly basic rate deleted text begin of pay deleted text end new text begin paid to the laborer or
mechanic for the work performed under a contract new text end ; deleted text begin and
deleted text end

(2) a laborer or mechanic deleted text begin may deleted text end new text begin must be paid unconditionally and not less often than
on a weekly basis and shall new text end not be paid a lesser rate of wages than the prevailing wage rate
in the same or most similar trade or occupation in the area. new text begin Actual costs for providing
bona fide fringe benefit programs as defined in subdivision 8 to a laborer or mechanic
performing work under the contract may be deducted from the total prevailing wage rate
to obtain the taxable hourly basic rate to be paid to the laborer or mechanic; and
new text end

new text begin (3) apprentices in a certified or registered state or federal program approved by the
United States Department of Labor may work on a project for less than the prevailing
wage rate. The contractor, subcontractor, or agent shall not exceed the apprenticeship ratio
established for the certified or registered program on any project, and shall pay the pay
and benefits established for the certified or registered program to the apprentices.
new text end

Subd. 2.

Exceptions.

This section does not apply to wage rates and hours of
employment of laborers or mechanics who process or manufacture materials or products
or to the delivery of materials or products by or for commercial establishments which have
a fixed place of business from which they regularly supply processed or manufactured
materials or products. This section applies to laborers or mechanics who deliver mineral
aggregate such as sand, gravel, or stone which is incorporated into the work under the
contract by depositing the material substantially in place, directly or through spreaders,
from the transporting vehicle.

Subd. 3.

Contract requirements.

The contract must specifically state the
prevailing wage rates, prevailing hours of labor, and hourly basic rates of pay. new text begin The
contracting authority shall incorporate into its proposals and contracts the appropriate
wage determinations for the contract along with contract language provided by the
commissioner of labor and industry to notify the contractor of the applicability of sections
177.41 to 177.46. Failure to incorporate the determination or provided contract language
into the contracts shall make the contracting authority liable for making whole the
contractor for any increases in the wages paid, including employment taxes and reasonable
administrative costs based on the increase in wages, to the laborers or mechanics working
on the project. Contracting authorities are specifically authorized to incorporate prevailing
wage requirements into any public works contract, whether or not required to do so by
sections 177.41 to 177.46. The contracting authority is authorized to incorporate into the
bid documents for each project a provision stating that the successful bidder on the project
will pay to the contracting authority a compliance-monitoring surcharge, as a mobilization
cost for the project. The surcharge shall be a percentage of the amount bid for completion
of the project, not including the surcharge. The percentage to be included in the bid for this
surcharge shall be either an amount set annually by the commissioner for all projects after
investigation to determine the expected costs of monitoring compliance, or an amount
requested by the contracting authority and authorized by the commissioner annually, and
will be a percentage sufficient, when added to each contract to be awarded that year, to
pay the estimated cost to the contracting authority of monitoring compliance with sections
177.41 to 177.46 as required in those sections. The surcharge shall be incorporated into
the contract for the project and paid by the contractor to the contracting authority within
two weeks of the payment by the contracting authority of the mobilization cost for the
project as specified in the successful bid. The contracting authority shall use this surcharge
exclusively to defray costs of monitoring compliance with sections 177.41 to 177.46 as
required in those sections.
new text end

new text begin These hours, rates, and classifications, along with contracting authority name,
project engineer or agency contact person, telephone number, and project identification
numbers, together with the provisions of subdivision 5, printed in bold type of at least 18
point, in English, Spanish, and Hmong, shall be and remain posted directly on the project
site by the contractor in at least one conspicuous and accessible location acceptable to
the commissioners for the information of all employees working on the project. The
contracting authority shall ensure the contractor keeps the required information on the
project from the start of work until all work is completed on the project. A civil penalty of
$100 per day shall be assessed by the contracting authority against the contractor for each
day work is performed on the project and the poster board is not placed or maintained on
the project work site at a location acceptable to the contracting authority.
new text end

new text begin All contracting authorities shall require weekly submittal of certified payrolls from
each contractor, subcontractor, or agent working on the project. The contractor shall
submit certified payrolls from the contractor's own workforce along with payrolls from
all subcontractors and agents working on the project. The contracting authority shall
maintain the payrolls under the contracting agency's normal record retention schedules
for a minimum of two years past the closing of the contract. The payroll information and
certification language shall be submitted in a form approved by the department. The
payroll information shall list all laborers or mechanics performing work under the contract,
the hourly costs of, and the provider names and contact information of, the company's
fringe benefits program, along with project identification information, and the following
information on the laborer or mechanic: full name, address, Social Security number,
each classification of labor worked, daily and weekly hours worked on the project, rates
of pay, overtime hours and rates, taxes withheld and other deductions, the project gross
amount and net amounts earned, the total gross amount and net amounts earned, and
any additional information determined by the commissioner to be necessary to ensure
compliance with this section. Each contracting authority shall redact the Social Security
number and address of each laborer or mechanic from each certified payroll before any
person other than an employee of the contracting authority or the department is allowed to
review the certified payroll. Redacting the Social Security numbers and addresses is a
cost of monitoring compliance with this section to be included in the contract amount as
required by this subdivision. Payrolls shall be submitted within one week after the week
ending date of the week in which the work was performed. Each subcontractor or agent
shall furnish to the contractor weekly certified payrolls to demonstrate compliance with
this section. The contractor has authority to interview all laborers or mechanics on the
project and review subcontractor or agent payroll information to ensure compliance with
this section. The contracting authority shall assess a civil penalty of $100 per week against
the contractor for each week the contractor's certified payrolls or any of the individual
subcontractor or agent-certified payrolls are not submitted after written notification by
the contracting authority that the payrolls are late. The contracting authority may deduct
from what is owed the contractor on the project for civil penalties and assessments for
violations on the project.
new text end

new text begin The contractor shall incorporate into all subcontract agreements, purchase orders,
or other written agreements, the contract wage determinations and the contract language
provided by the commissioner contained in the contract. The contractor shall also ensure
that all secondary subcontract agreements, purchase orders, or other written agreements
contain the same language. The contractor shall provide a written certified confirmation
on a form provided by the contracting authority that all subcontractors and agents have
received the required contract wage determinations and contract language. The form shall
be provided to the contracting authority prior to any subcontractor or agent working on the
project. If the contractor does not provide the information required to the subcontractor
or agents, or the form to the contracting authority, the contractor shall be the sole entity
responsible for any contracting authority or commissioner's assessment. A civil penalty of
$50 per week shall be assessed by the contracting authority against the contractor for each
week after written notification that the subcontractor or agent forms are not submitted.
new text end

Subd. 4.

Determination by commissioner.

The prevailing wage rates, prevailing
hours of labor, and hourly basic rates of pay for all trades and occupations required deleted text begin in any
project deleted text end new text begin under each contract new text end must be deleted text begin ascertained deleted text end new text begin obtained new text end before deleted text begin the state deleted text end new text begin any contracting
authority new text end asks for bids. new text begin The wage determinations must also include future hours and rates
when they can be determined for classes of laborers or mechanics in an area. The wage
determination must specifically state the effective dates of future hours and rates when
they are certified. new text end The commissioner of labor and industry shall investigate as necessary
to ascertain the information new text begin and shall develop and maintain classification definitions.
The contractor and contracting authority shall apply the classification definitions to the
laborers or mechanics performing work under the contract. Missing classifications,
classification disputes, and disputes arising from interpretations of this section shall be
resolved by the commissioner of labor and industry new text end . deleted text begin The commissioner shall keep the
information posted on the project in at least one conspicuous place for the information of
the employees working on the project. deleted text end A person aggrieved by a final determination of the
commissioner may petition the commissioner for reconsideration of findings new text begin within 20
days of the publication or decision new text end . A person aggrieved by a decision of the commissioner
after reconsideration may, within 20 days after the decision, petition the commissioner
for a public hearing in the manner of a contested case under sections 14.57 to 14.61. new text begin If
the commissioner finds that a change in the certified prevailing hours of labor, prevailing
wage rate, and the hourly basic rate of pay for a class of laborers or mechanics in any area
is required, the commissioner may at any time certify that change, and the certified change
will be effective on a project advertised for bid on or after the date of certification.
new text end

Subd. 5.

Penalty.

It is a deleted text begin misdemeanor deleted text end new text begin violation new text end for an officer or employee of
the state new text begin or contracting authority knowingly new text end to execute a contract for a project without
deleted text begin complying with this section, or for deleted text end new text begin the wage determination or contract language provided
by the commissioner of labor and industry, or knowingly close a contract on a project with
violations or assessments. A willful violation may be subject to the penalties assigned
under section 609.43. new text end A contractor, subcontractor, or agent deleted text begin to pay any laborer, worker,
or mechanic employed directly on the project site a lesser wage for work done under the
contract than the prevailing wage rate as stated in the contract. This misdemeanor is
punishable by a fine of deleted text end new text begin who violates this section is guilty of a gross misdemeanor for the
first prosecution of a criminal offense under this section and shall be fined for the violation
new text end not more than deleted text begin $700 deleted text end new text begin $3,000 new text end , or deleted text begin imprisonment deleted text end new text begin imprisoned new text end for not more than deleted text begin 90 days deleted text end
new text begin one year new text end , or both. deleted text begin Each agent or subcontractor shall furnish to the contractor evidence
of compliance with this section.
deleted text end

Each day a violation of this section continues is a separate deleted text begin offense deleted text end new text begin violation new text end . new text begin It will
be considered a felony for the second prosecution of a contractor, subcontractor, or agent
for violations of this section, or for the prosecution of a total unpaid back wage assessment
by the commissioner of labor and industry against a violating contractor, subcontractor, or
agent in excess of $100,000, and shall be fined for the violation not more that $10,000, or
imprisoned for not more than five years, or both. Each day that the violation continues is a
separate violation.
new text end

new text begin Whoever induces a job applicant or employee on any project subject to this section
to give up or forego any part of the wages to which the job applicant or employee is
entitled under the contract governing the project by threat not to employ, by threat of
dismissal from employment, or by any other means, or knowingly alters official company
employment or time records to falsely report the laborer's or mechanic's pay is guilty of a
gross misdemeanor and may by fined for the violation not exceeding $3,000 or imprisoned
for not more than one year, or both. Each day that the violation continues is a separate
violation.
new text end

new text begin Any employee under this section who knowingly permits the contractor or
subcontractor to pay less than the prevailing wage rate set forth in the contract, or who
gives up any part of the compensation to which entitled under the contract, is guilty of a
misdemeanor and may be fined no more than $40 or imprisoned not more than 30 days or
both. Each day any violation of this paragraph continues is a separate violation.
new text end

new text begin In addition to or instead of criminal prosecution under this subdivision, the
commissioner may engage in any civil enforcement actions authorized by this section
or section 177.45.
new text end

new text begin A contractor, subcontractor, or agent that willfully violates this section shall be
deemed to have a lack of business integrity and shall be debarred by the commissioner
from working on any contract funded in whole or in part with state funds as a contractor,
subcontractor, agent, or material supplier for a period of at least one year and not to
exceed three years. The commissioner shall publish a list of the debarred entities. If any
contracting authority has debarred an entity for prevailing wage violations, the contracting
authority shall report the debarment to the commissioner, who will then include the
contractor on the list of debarred entities. All contracting authorities are required to review
the list of debarred entities and may not contract with a debarred entity or allow a debarred
entity to work on any project as a subcontractor, material supplier, or in any other capacity.
new text end

Subd. 6.

Examination of records new text begin and investigation by the department new text end .

The
Department of Labor and Industry shall enforce this section. deleted text begin The department may demand,
and the contractor and subcontractor shall furnish to the department, copies of any or all
payrolls. deleted text end new text begin At the written request of the department, the contracting authority that awarded
a contract funded in whole or in part with state funds shall notify the commissioner in
writing of the project location, contractor, and any other project documentation deemed
necessary by the commissioner. The department shall employ at least five investigators to
perform on-site project reviews and to receive and investigate complaints of violations of
this section, and conduct training of and outreach to contracting authorities to assist them
in their compliance efforts. These investigators shall be in addition to any investigators
employed to conduct prevailing wage surveys. The department has the right to stop and
interview employees working on projects subject to this section during work hours. The
commissioner shall hold confidential any written or verbal complaint of violation of this
section filed by a laborer or mechanic or filed on behalf of a laborer or mechanic. Each
complaint of violation of this section received from a contracting authority or by or for a
laborer or mechanic by the department shall be assigned to an investigator and investigated
in a timely manner. The department may demand, and the contractor or subcontractor or
agent shall furnish to the department, copies of any or all payroll documentation deemed
necessary by the department. The department may also demand, and the contracting
authority shall furnish to the department, any or all project information. new text end The department
may examine all records relating to wages paid new text begin or fringe benefits provided to new text end laborers
or mechanics deleted text begin on work to which deleted text end new text begin to ensure compliance with new text end sections 177.41 to deleted text begin 177.44
apply deleted text end new text begin 177.46 new text end .

new text begin After gathering the information necessary to evaluate a complaint of a violation of
this section, the investigator shall determine whether a violation has occurred. If the
investigator determines that no violation has occurred, or that there is a lack of evidence to
determine a violation, the investigation shall be terminated. However, if the investigator
determines that a violation has occurred, the investigator shall determine the amount of
back wages owed to the affected laborer or mechanic, shall assess a 100 percent penalty
based on the amount of back wages owed to be paid to the affected laborer or mechanic,
and an additional civil penalty equal to 100 percent of the back wages owed to be paid to
the department for future prevailing wage enforcement efforts and assess the total amount
of back wages owed and penalties against the violating contractor, subcontractor, or agent
accordingly. In addition, if the investigator determines that a violation has occurred,
the investigator may investigate all other open or closed contracts requiring payment
of prevailing wages on which that contractor, subcontractor, or agent performed any
work within the previous two years, to determine if there are similar violations. The
department shall notify both the contractor and the contracting authority of its findings
and assessment. If the violating contractor, subcontractor, or agent does not comply
with the department's assessment within 20 days of receipt of written notification, the
department shall notify the contracting authority to withhold from any payment due to the
contractor a reasonable amount to ensure compliance with the department's assessment.
The contracting authority shall require adherence to the department's assessments by the
contractor. The contracting authority shall withhold from funds owed the contractor
a reasonable amount to ensure compliance with the assessment. The contracting
authority shall report back to the investigator when the contractor complies with the
commissioner's findings and assessment. The investigator shall report to the commissioner
any contractor, subcontractor, or agent who does not comply with the department's
findings and assessment within 60 days after the contractor received the written findings
and assessment. The commissioner shall deem any unpaid department assessment as an
unresolved violation of this section and handle as required under subdivision 6a.
new text end

new text begin If a contractor is deemed to be insolvent by the commissioner, the contracting
authority shall deduct the department's assessed amount from funds owed the contractor or
assess the bonding company for department's assessment. The funds shall be sent to the
commissioner to be dispersed to the affected laborers or mechanics.
new text end

new text begin Subd. 6a. new text end

new text begin Prevailing wage rate violations. new text end

new text begin (a) Reporting to violations. All
contracting authorities shall monitor compliance with sections 177.41 to 177.46 on
all contracts that receive any amount of state funding. The contracting authority shall
interview employees working on the project during working hours. The contracting
authority shall randomly review the weekly certified payrolls, subcontract agreements,
project documentation, and employee interviews to determine if the contractor has
demonstrated compliance with this section. The contracting authority has authority
to examine all records relating to the hours of work, wages paid, or cost of providing
fringe benefits, to laborers and mechanics performing work under a contract to determine
compliance with sections 177.41 to 177.46. The contracting authority shall hold
confidential any written or verbal complaint of violation of this section filed by a laborer
or mechanic or filed on behalf of a laborer or mechanic. The contracting authority
shall notify the contractor in writing of any violations of this section. The contractor
shall resolve the violations on the project and provide evidence of the resolution of the
violations to the satisfaction of the contracting authority. The contracting authority shall
report any unresolved violations of this section to the commissioner of labor and industry
after 20 days of a written notification to the contractor to resolve the violations, or the
contracting authority has knowledge that it is the violating contractor's, subcontractor's,
or agent's second offense of a similar nature. The contracting authority shall not close
a contract with any unresolved violations of this section.
new text end

new text begin The commissioner of labor and industry is required to report any unresolved
violations within 60 days of written notification to the contractor, any willful violations of
this section, or second offense violations of a similar nature, to both the county attorney
where the alleged violation occurred and to the attorney general for criminal prosecution.
new text end

new text begin (b) new text end new text begin Notice of actions. new text end new text begin A county attorney shall notify the commissioner of labor and
industry and the attorney general upon commencing an action for a violation of this section.
The county attorney shall also give notice to the commissioner and the attorney general of
the outcome of the action, including detailed reasons for the dismissal or settlement of an
action pursuant to a plea agreement that awards less than the maximum penalties for a
violation of this section. The commissioner shall notify the contracting authority.
new text end

new text begin (c) new text end new text begin Action by the attorney general. new text end new text begin If the attorney general does not receive notice
of the commencement of an action by a county attorney, as required by paragraph (b),
within six months of receiving a report under paragraph (a) from the commissioner of
labor and industry, the attorney general shall pursue the suspected violation, unless the
attorney general and commissioner agree that civil enforcement will be sufficient to
effectuate the policies of the Prevailing Wage Act.
new text end

Subd. 7.

Applicability.

This section does not apply to a contract, or work under
a contract, under which:

(1) the estimated total cost of completing the project is less than $2,500 and only one
trade or occupation is required to complete it, or

(2) the estimated total cost of completing the project is less than $25,000 and more
than one trade or occupation is required to complete it.

new text begin Subd. 8. new text end

new text begin Fringe benefit programs. new text end

new text begin The prevailing wage rate shall be paid for all
hours worked on the project. The contractor, subcontractor, or agent may take credit
toward the prevailing wage rate for the recovery of the costs of providing bona fide
fringe benefits that have been approved by the commissioner prior to working on a
contract subject to this section and deemed a direct benefit to the laborer or mechanic.
The contractor, subcontractor, or agent shall not take credit for the company's incurred
administrative costs of providing a bona fide fringe benefits program or the costs of legally
required plans or insurance including but not limited to workers' compensation and
unemployment insurance, as well as program or plan costs deemed by the commissioner
to be incurred for the benefit of the contractor, subcontractor, or agent.
new text end

new text begin The contributions irrevocably made by the employer to a trustee or third party
pursuant to bona fide fringe benefit fund, plan, or program may be deducted from the
prevailing wage rate, including the reasonable anticipated costs made to a legally
enforceable financially responsible employer plan or program. All programs shall be
communicated in writing to the employee prior to working on the project.
new text end

new text begin Contributions to plans or programs must be made on a regular basis, not less often
than quarterly. The costs of providing the benefit plan or program must be annualized.
Contributions made to a plan or program for government work cannot fund the plan for
periods of nongovernment work.
new text end

new text begin The laborer or mechanic must have an opportunity to receive the benefit; credit will
not be given costs deducted from laborers or mechanics that are not eligible to receive
the benefit. A laborer or mechanic cannot pay the costs of providing a fringe benefit
for another laborer or mechanic.
new text end

new text begin Bonuses are not considered a fringe benefit as they are paid in the future and the
laborer or mechanic must be paid weekly the full amount owed without any rebate.
Transportation, board, and lodging are not considered a fringe benefit as it is a properly
reimbursable expense of the employer and incurred for the employer's benefit. Company
vehicles are not considered a fringe benefit as it is to the advantage of the contractor.
new text end

new text begin The remainder of the prevailing wage rate after the costs for bona fide fringe benefits
have been deducted shall be the taxable hourly wage rate paid to the employee for regular
hours worked and used as the basis for calculating overtime rates of pay. The amount
deducted for fringe benefit costs on a project may not reduce the taxable hourly wage rate
below the laborer's or mechanic's regular rate of pay. A contractor may not reduce the rate
of pay of the laborer or mechanic on nonprevailing wage work as a result of the laborer or
mechanic having performed work for which payment of prevailing wage is required.
new text end

new text begin Nothing in this section shall supersede provisions of any collective bargaining
agreement. The provisions of the Employment Retirement Income Security Act shall be
considered by the commissioner when determining bona fide fringe benefit programs.
new text end

new text begin Subd. 9. new text end

new text begin Keeping records, penalty. new text end

new text begin Every employer subject to sections 177.41 to
177.46 must make and keep a record of:
new text end

new text begin (1) the name, address, Social Security number, and classification of each laborer
or mechanic;
new text end

new text begin (2) the hourly rate of pay, and the amount paid each pay period on both public and
private work to each laborer or mechanic;
new text end

new text begin (3) the hours and classifications worked each day and each work week on both
public and private work by the laborer or mechanic;
new text end

new text begin (4) fringe benefit program information, costs, and disbursements made on behalf of a
laborer or mechanic; and
new text end

new text begin (5) other information the commissioner finds necessary and appropriate to enforce
sections 177.41 to 177.46.
new text end

new text begin The records shall be kept in or near the employer's main business location for three
years after the contract is closed on the project worked. The commissioner may fine
a contractor, subcontractor, or agent up to $1,000 for each failure to maintain records
as required by this section. This penalty is in addition to any penalties provided under
section 177.43 or 177.46.
new text end

Sec. 11.

Minnesota Statutes 2006, section 177.44, is amended to read:

177.44 deleted text begin HIGHWAY deleted text end new text begin TRANSPORTATION new text end CONTRACTS; HOURS OF LABOR;
WAGE RATES; PENALTY.

Subdivision 1.

Hours, wages permitted.

A laborer or mechanic employed by a
contractor, subcontractor, agent, or other person doing or contracting to do all or part
of the work under a contract based on bids as provided in Minnesota Statutes deleted text begin 1971 deleted text end ,
section 161.32, deleted text begin to which the state is a party deleted text end , new text begin or for contracts for which the Department
of Transportation has a delegation of authority to be the contracting authority, or for
contracts that the Department of Transportation oversees under its authority to oversee
constitutionally mandated state funding to other local governmental bodies, or units of
government, or political subdivisions that are the contracting authority, new text end for the construction
or maintenance of a highway new text begin or other public work projects new text end , may not be permitted or
required to work longer than the prevailing hours of labor unless the laborer or mechanic
is paid for all hours in excess of the prevailing hours at a rate of at least 1-1/2 times the new text begin
actual new text end hourly basic rate deleted text begin of pay of deleted text end new text begin paid to new text end the laborer or mechanic new text begin for the work performed
on the project new text end . The laborer or mechanic must be paid deleted text begin at least deleted text end new text begin unconditionally and not
less often than on a weekly basis and shall not be paid a lesser rate of wages than new text end the
prevailing wage rate in the same or most similar trade or occupation in the area. new text begin The costs
of providing fringe benefit programs as defined in section 177.43, subdivision 8, to the
laborers or mechanics working on the project may be deducted from the total prevailing
wage rate. Contractors, subcontractors, agents, or other persons performing work under
the contract must maintain records as defined in section 177.43, subdivision 9. new text end

new text begin Apprentices in a certified or registered state or federal program may perform work
under a contract for less than the prevailing wage rate. The employer must not exceed the
program's approved apprenticeship ratio on any project, and must pay the pay and benefits
established for the certified or registered program to the apprentices.
new text end

Subd. 2.

deleted text begin Applicability deleted text end new text begin Exceptions new text end .

This section does not apply to wage rates and
hours of employment of laborers or mechanics engaged in the processing or manufacture
of materials or products, or to the delivery of materials or products by or for commercial
establishments which have a fixed place of business from which they regularly supply
the processed or manufactured materials or products. This section applies to laborers
or mechanics who deliver mineral aggregate such as sand, gravel, or stone which is
incorporated into the work under the contract by depositing the material substantially in
place, directly or through spreaders, from the transporting vehicle.

Subd. 3.

Investigations by Department of Labor and Industry.

The Department
of Labor and Industry shall conduct investigations and hold public hearings necessary to
define classes of laborers deleted text begin and deleted text end new text begin or new text end mechanics and to determine the hours of labor and wage
rates prevailing in all areas of the state for all classes of deleted text begin labor and deleted text end new text begin laborers or new text end mechanics
commonly employed in highway new text begin , heavy, or building new text end construction work, so as to determine
prevailing hours of labor, prevailing wage rates, and hourly basic rates of pay. new text begin If a contract
contains multiple types of construction work, the contract must contain all appropriate
wage determinations and the laborer or mechanic must be paid at a rate for all hours
worked under the type of work performed on the project. The Department of Labor
and Industry shall develop, maintain, and publish classification definitions for use on
Department of Transportation contracts. The contractors and Department of Transportation
and other contracting authorities must apply the classification definitions to the laborers or
mechanics working on the project. Missing classifications, classification disputes, and
other questions arising from the interpretations of this section must be resolved by the
commissioner of labor and industry as specified in section 177.43, subdivision 4.
new text end

The Department new text begin of Labor and Industry new text end shall determine the nature of the equipment
furnished by truck drivers who own and operate trucks on contract work to determine
minimum rates for the equipment, and shall establish by rule minimum rates to be
computed into the prevailing wage rate. new text begin The contracting agency must incorporate the
minimum rates into its contracts for bid. The contractor, subcontractor, or agent must
pay the minimum rate established by the commissioner of labor and industry directly
to the person who owns and operates the truck without any deductions or rebates. The
contracting authority must receive evidence from the contractor, subcontractor, or agent
that the proper minimum rate has been paid to the person who owns and operates the truck
in a form approved by the Department of Transportation. A civil penalty of $100 may be
assessed against the contractor for each week the approved form is not submitted after
written notification that the form is late to the contractor.
new text end

Subd. 4.

Certification of hours and rate.

The commissioner of labor and industry
shall at least once a year certify the prevailing hours of labor, the prevailing wage rate,
and the hourly basic rate of pay for all classes of laborers deleted text begin and deleted text end new text begin or new text end mechanics referred to
in subdivision 3 in each area. The certification must also include future hours and rates
when they can be determined for classes of laborers deleted text begin and deleted text end new text begin or new text end mechanics in an area. The
certification must specifically state the effective dates of future hours and rates when they
are certified. If a construction project extends into more than one area deleted text begin there shall be only
one standard of hours of labor and wage rates for the entire project deleted text end new text begin , all applicable area
wage determinations must be contained in the contract and the hours of labor and wage
rates paid the laborer or mechanic must be specific to the areas in which the work is
performed new text end . A person aggrieved by a final determination of the commissioner may petition
the commissioner for reconsideration of findings new text begin within 20 days of the publication or
decision new text end . A person aggrieved by a decision of the commissioner after reconsideration may
within 20 days after the decision petition the commissioner for a public hearing as in a
contested case under sections 14.57 to 14.61. If the commissioner finds that a change in
the certified prevailing hours of labor, prevailing wage rate, and the hourly basic rate of
pay for a class of laborers or mechanics in any area is required, the commissioner may at
any time certify that change new text begin and the certified change is effective on a project advertised
for bid on or after the date of certification new text end .

Subd. 5.

Hours and rates to be posted.

The prevailing hours of labor, the prevailing
wage rates, the hourly basic rates of pay, and classifications for all labor as certified by
the commissioner must be specifically stated in the proposals and contracts for each
deleted text begin highway construction contract to which the state is a party deleted text end new text begin transportation contract which is
funded in whole or in part with state funds. In addition to the wage determinations issued
by the Department of Labor and Industry, the contracting authority must incorporate
into its proposals and contracts the contract language provided by the commissioner of
transportation to notify the contractor of the application of sections 177.41 to 177.46.
Failure to incorporate the proper determination into the contracts makes the contracting
authority liable for making the contractor whole for the increases in the wages paid,
including employment taxes and reasonable administrative costs based on the increased
wages, to the laborers or mechanics working on the project. Contracting authorities are
specifically authorized to incorporate prevailing wage requirements into any public works
contract, whether or not required to do so by sections 177.41 to 177.46. The contracting
authority is authorized to incorporate into the bid documents for each project a provision
stating that the successful bidder on the project will pay to the contracting authority a
compliance-monitoring surcharge as a mobilization cost for the project. The surcharge
shall be a percentage of the amount bid for completion of the project, not including the
surcharge. The percentage to be included in the bid for this surcharge shall be either an
amount set annually by the department for all projects after investigation to determine
the expected costs of monitoring compliance, or an amount requested by the contracting
authority and authorized by the commissioner annually, and will be a percentage sufficient,
when added to each contract to be awarded that year to pay the estimated cost to the
contracting authority of monitoring compliance with sections 177.41 to 177.46 as required
in those sections. The surcharge shall be incorporated into the contract for the project and
paid by the contractor to the contracting authority within two weeks of the payment by the
contracting authority of the mobilization cost for the project as specified in the successful
bid. The contracting authority shall use this surcharge exclusively to defray costs of
monitoring compliance with sections 177.41 to 177.46 as required in those sections new text end .

These hours, rates, and classifications, together with the new text begin name of the project engineer
or agency contact person, telephone number, project identification numbers, and the new text end
provisions of subdivision 6, new text begin printed in bold type of at least 18 point, in English, Spanish,
and Hmong, new text end must be kept posted new text begin directly new text end on the project by the deleted text begin employer deleted text end new text begin contractor new text end in
at least one conspicuous deleted text begin place deleted text end new text begin and accessible location new text end for the information of deleted text begin employees deleted text end new text begin
all laborers or mechanics new text end working on the project. new text begin The contracting authority must ensure
the contractor keeps the required information on the project from the start of work until
all work is completed on the project. A civil penalty of $100 per day must be assessed
by the contracting authority against the contractor for each day work is performed on the
project and the poster board is not placed or maintained on the project work site at a
location acceptable to the contracting authority.
new text end

Subd. 6.

Penalties.

new text begin It is a violation for an officer or employee of the state or
contracting authority to knowingly execute a contract for a project without the wage
determination or contract language provided by the commissioner of transportation on the
application of this section, or knowingly close a contract with violations of this section
or assessments by the commissioner of transportation. A violation may be subject to the
penalties under section 609.43.
new text end

A contractor, subcontractor, or agent who violates this section is guilty of a new text begin gross new text end
misdemeanor new text begin for the first prosecution of a criminal offense under this section new text end and deleted text begin may deleted text end new text begin
must new text end be fined new text begin for each violation new text end not more than deleted text begin $300 deleted text end new text begin $3,000 new text end or imprisoned not more than
deleted text begin 90 days deleted text end new text begin one year new text end or both new text begin , and required to reimburse the county attorney or attorney
general for the cost of prosecution new text end . Each day that the violation continues is a separate
offense. new text begin It is a felony for the second criminal prosecution of a contractor, subcontractor, or
agent for violations of this section, or for a criminal prosecution of a total unpaid back
wage assessment by the commissioner of transportation against the violating contractor,
subcontractor, or agent in excess of $100,000, and must be fined for the violation not more
than $10,000, or imprisoned no more than five years, or both, and required to reimburse
the county attorney or the attorney general for the cost of prosecution. Each day that the
violation continues is a separate offense.
new text end

Whoever induces a job applicant or employee on any project subject to this section
to give up or forego any part of the wages to which entitled under the contract governing
the project by threat not to employ, by threat of dismissal from employment, or by any
other means new text begin , or knowingly alters official company employment or time records to falsely
report the employee's pay, new text end may be fined not exceeding deleted text begin $1,000 deleted text end new text begin $3,000 new text end or imprisoned not
more than one year new text begin , new text end or both. new text begin Each day that the violation continues is a separate offense.
new text end

Any employee under this section who knowingly permits the contractor deleted text begin or deleted text end new text begin , new text end
subcontractor new text begin , or agent new text end to pay less than the prevailing wage rate set forth in the contract,
or who gives up any part of the compensation to which entitled under the contract, may
be fined not exceeding $40 or imprisoned not more than 30 days new text begin , new text end or both. Each day any
violation of this paragraph continues is a separate offense.

new text begin In addition to or instead of criminal prosecution under this subdivision, the
commissioner of transportation may engage in any civil enforcement actions authorized
by this section or section 177.45.
new text end

new text begin A contractor, subcontractor, or agent that willfully violates this section must be
debarred by the commissioner of transportation under section 161.315 from working on
any contracts funded in whole or in part with state funds as a contractor, subcontractor,
agent, or material supplier for a period of at least one year and not more than three years.
The commissioner of transportation shall publish a list of the debarred entities. If any
contracting authority has debarred an entity for prevailing wage violations, the contracting
authority must report the debarment to the commissioner of transportation, who must
include the contractor on the list of debarred entities. All contracting authorities are
required to review the list of debarred entities and may not contact with a debarred entity
or allow a debarred entity to work on any project as a subcontractor, material supplier,
or in any other capacity.
new text end

Subd. 7.

Department of Transportation to enforce.

The Department of
Transportation shall require adherence to deleted text begin this section. The commissioner of transportation
may demand and every contractor and subcontractor shall furnish copies of payrolls. deleted text end new text begin all
sections relating to sections 177.41 to 177.46 on active project contracts for which the
Department of Transportation is the contracting authority, or on active contracts that
the commissioner of transportation has been delegated authority to be the contracting
authority, or on active contracts that the commissioner of transportation has been delegated
authority to be the contracting authority, or on active contracts that the commissioner
of transportation has authority to oversee the distribution of constitutional mandated
state funding to other local governmental bodies, or units of government, or political
subdivisions who act as the contracting authority. The Department of Transportation
shall maintain a staff of at least five investigators to ensure compliance on the projects.
The commissioner of transportation or contracting authority shall hold confidential any
complaint filed by a laborer or mechanic or filed on behalf of a laborer or mechanic.
new text end

new text begin The contracting authority must require weekly submittal of certified payrolls from
every contractor and subcontractor or agent performing work under the contract. The
contractor must submit certified payrolls for the contractor's own workforce along with
payrolls from all subcontractors and agents working on the project. The contracting
authority must maintain the payrolls under the contracting agency's normal record
retention schedules for a minimum of two years past the closing of the contract. The
payroll information and certification language must be submitted in a form approved by the
Department of Transportation. The payroll information must list all laborers or mechanics
performing work under the contract, the hourly costs, the provider names and contact
information, the company's fringe benefits program along with project identification
information, and the following information on the laborer or mechanic: full name, address,
Social Security number, each classification of labor worked, daily and weekly hours
worked on the project, rates of pay, overtime hours and rates, taxes withheld and other
deductions, the project gross amount and net amounts earned, the total gross amount and
net amounts earned, and any additional information determined by the commissioner of
transportation or commissioner of labor and industry to be necessary to ensure compliance
with this section. Each contracting authority must redact the Social Security number
and address of each laborer or mechanic from each certified payroll before any person
other than an employee of the contracting authority or the Department of Transportation
is allowed to review the certified payroll. Redacting the Social Security numbers and
addresses is a cost of monitoring compliance with this section to be included in the contract
amount as required by this subdivision. Payrolls must be submitted within one week after
the week ending date of the week in which the work was performed. Each subcontractor or
agent must furnish to the contractor weekly certified payrolls that demonstrate compliance
with this section. The commissioner of transportation may deduct from what is owed the
contractor on the project or after written notification, any other state-funded projects
under the commissioner of transportation's authority that the contractor is working on,
a liquidated damage for delinquent or missing payrolls or back wage assessments. The
contracting authority may deduct from what is owed the contractor on the project for civil
penalties and assessments for violations on the project. The contracting authority may
interview laborers or mechanics on the project site and must review certified payrolls to
determine compliance with this section. The contracting authority must assess a civil
penalty of $100 per week against the contractor for each week the certified payrolls or
that of the individual subcontractor or agent certified payrolls are not submitted after
written notification by the contracting authority that the payrolls are late. If a contracting
authority is unable to achieve or determine compliance on a project, the commissioner of
transportation must be notified in writing of the problems or violations.
new text end

new text begin The contractor must incorporate into all subcontract agreements, purchase
orders, or other written agreements the contract wage determination and the contract
language provided by the commissioner of transportation contained in the contract. The
contractor must also ensure that all secondary subcontract agreements, purchase orders,
or other written agreements contain the same language. The contractor must provide a
written certified confirmation on a form provided by the contracting authority that all
subcontractors and agents have received the required contract wage determinations
and contract language. The form must be provided to the contracting authority prior to
any subcontractor or agent working on the project. If the contractor does not provide
the information required to the subcontractor or agents, or the form to the contracting
authority, the contractor must be the sole entity responsible for any contracting authority
or commissioner's assessment. A civil penalty of $50 per week may be assessed by the
contracting authority against the contractor for each week after written notification that the
subcontractor or agent forms are not submitted.
new text end

The commissioner of transportation may examine all new text begin business, employment,
and time new text end records new text begin and other documents new text end relating to hours of work and the wages paid
laborers deleted text begin and deleted text end new text begin or new text end mechanics deleted text begin on work to which deleted text end new text begin considered necessary by the commissioner
of transportation to ensure compliance with new text end this section deleted text begin applies deleted text end . deleted text begin Upon request of the
Department of Transportation or upon complaint of alleged violation, the county attorney
of the county in which the work is located shall investigate and prosecute violations in a
court of competent jurisdiction.
deleted text end

new text begin After gathering the information necessary to evaluate a complaint of a violation of
this section, the Department of Transportation investigator shall determine whether a
violation has occurred. If the investigator determines that no violation has occurred or
there is not enough evidence to determine a violation has occurred, the investigation must
be terminated. However, if the investigator determines that a violation has occurred, the
investigator shall determine the amount of back wages owed to the affected laborer or
mechanic, plus a civil penalty equal to 100 percent of the back wages owed, to be paid
to the affected laborer or mechanic, and an additional civil penalty equal to 100 percent
of the back wages owed to be paid to the department and used by the department for
future prevailing wage enforcement efforts and assess the total amount of back wages
owed and penalties against the violating contractor, subcontractor, or agent accordingly.
In addition, if the investigator determines that a violation has occurred, the investigator
shall investigate all other contracts, requiring payment of prevailing wages, on which that
contractor, subcontractor, or agent performed any work within the previous two years, to
determine if there are similar violations.
new text end

new text begin (1) For investigations on projects where the contracting authority is the Department
of Transportation, the project engineer and contractor must be notified in writing of the
violations and determination of assessments. If the violating contractor, subcontractor,
or agent does not comply with the investigator's assessment within 20 days of written
notification, the investigator must cause to be withheld from any money owed the
contractor by the Department of Transportation a reasonable amount to ensure compliance
with the assessments.
new text end

new text begin (2) For investigations where the contracting authority is a local governmental body
or political subdivision of the state, the investigator shall notify in writing the contracting
authority and the contractor of the violations and determination of assessments. If the
violating contractor, subcontractor, or agent does not comply with the Department of
Transportation's assessment within 20 days of written notification, the Department of
Transportation investigator shall notify the contracting authority to withhold a reasonable
amount of funds to ensure compliance with the commissioner of transportation's
assessments. The contracting authority must require adherence to the Department of
Transportation's assessment. The contracting authority must withhold a reasonable amount
from money owed the contractor to ensure compliance with the assessment.
new text end

new text begin The investigator shall report to the commissioner of labor and industry any
contractor, subcontractor, or agent who does not pay the amount assessed within 60 days
of receipt of written notification of the determination of assessment for record-keeping
purposes and the commissioner of transportation shall consider the unpaid assessment
as an unresolved violation of this section. The commissioner of transportation shall
report any unresolved violations, willful violations, or second offense violations of a
similar nature, of this section to both the county attorney where the alleged violation
occurred and to the attorney general. A county attorney shall notify the commissioner of
transportation and the attorney general upon commencing an action for a violation of this
section. The county attorney shall also give notice to the commissioner of transportation
and the attorney general of the outcome of the action, including detailed reasons for the
dismissal or settlement of an action pursuant to a plea agreement that awards less than the
maximum penalties for a violation of this section. The commissioner of transportation
shall notify the contracting authority.
new text end

new text begin If the attorney general does not receive notice of the commencement of an action
by a county attorney, as required by this subdivision, within six months of receiving
an unresolved violation report from the commissioner of transportation, the attorney
general shall pursue the suspected violation in a court of competent jurisdiction, unless the
attorney general and commissioner of transportation agree that civil enforcement will be
sufficient to effectuate the policies of the Prevailing Wage Act.
new text end

new text begin Civil penalties and debarments under this section may be assessed by the
commissioner of transportation and, if necessary, the case must be heard before an
administrative law judge.
new text end

Sec. 12.

new text begin [177.45] INVESTIGATIONS AND SUBPOENAS.
new text end

new text begin Subdivision 1. new text end

new text begin General powers. new text end

new text begin For the purposes of this section, "commissioner"
means the commissioner of labor and industry with respect to duties and responsibilities
entrusted to the commissioner of labor and industry by sections 177.41 to 177.46, and
the commissioner of transportation with respect to duties and responsibilities entrusted to
the commissioner of transportation by sections 177.41 to 177.46. In connection with the
duties and responsibilities entrusted to each commissioner pursuant to sections 177.41 to
177.46, each commissioner may:
new text end

new text begin (1) conduct investigations necessary to determine whether any person has violated
or is about to violate this section;
new text end

new text begin (2) require or permit any person to file a statement in writing, under oath, or
otherwise as the commissioner determines, as to all the facts and circumstances concerning
the matter being investigated;
new text end

new text begin (3) hold hearings, upon reasonable notice, in respect to any matter arising out of the
duties and responsibilities entrusted to the commissioner;
new text end

new text begin (4) conduct investigations and hold hearings for the purpose of compiling
information related to the duties and responsibilities entrusted to the commissioner;
new text end

new text begin (5) examine the books, accounts, records, and files of every contractor, subcontractor,
or agent and of every person who is engaged in work under a contract subject to sections
177.41 to 177.46; the commissioner or a designated representative must have free access
during normal business hours to the offices and places of business of the person, and to
all books, accounts, papers, records, files, safes, and vaults maintained in the place of
business; and
new text end

new text begin (6) publish information that is contained in any order issued by the commissioner.
new text end

new text begin Subd. 2. new text end

new text begin Response to department requests. new text end

new text begin A contractor, subcontractor,
agent, or other person performing work under a contract subject to the jurisdiction of
the commissioner must comply with requests for information, documents, or other
requests from the department within the time specified in the request, or, if no time is
specified, within 30 days of the mailing of the request by the department. A contractor,
subcontractor, agent, or other person subject to the jurisdiction of the commissioner must
appear before the commissioner or the commissioner's representative when requested to
do so and bring all documents or materials that the commissioner or the commissioner's
representative has requested.
new text end

new text begin Subd. 3. new text end

new text begin Power to compel production of evidence. new text end

new text begin For the purpose of any
investigation, hearing, proceeding, or inquiry related to the duties and responsibilities
entrusted to the commissioner, the commissioner or a designated representative may
administer oaths and affirmations, subpoena witnesses, compel attendance, take evidence,
and require the production of books, papers, correspondence, memoranda, agreements,
or other documents or records that the commissioner considers relevant or material
to the inquiry.
new text end

new text begin Subd. 4. new text end

new text begin Court orders. new text end

new text begin In case of a refusal to appear or a refusal to obey a subpoena
issued to any person, the district court, upon application by the commissioner, may issue
to any person an order directing that person to appear before the commissioner or the
officer designated by the commissioner and produce documentary evidence if so ordered
or give evidence relating to the matter under investigation or in question. Failure to obey
the order of the court may be punished by the court as a contempt of court.
new text end

new text begin Subd. 5. new text end

new text begin Scope of privilege. new text end

new text begin No person is excused from attending and testifying
or from producing any document or record before the commissioner or from obedience
to the subpoena of the commissioner or any officer designated by the commissioner or
in a proceeding instituted by the commissioner, on the ground that the testimony or
evidence required may tend to incriminate that person or subject that person to a penalty
of forfeiture. No person may be prosecuted or subjected to a penalty or forfeiture for or
on account of a transaction, matter, or thing concerning which the person is compelled,
after claiming the privilege against self-incrimination, to testify or produce evidence,
documentary or otherwise, except that the individual is not exempt from prosecution and
punishment for perjury or contempt committed in testifying.
new text end

new text begin Subd. 6. new text end

new text begin Compliance orders. new text end

new text begin The commissioner may issue an order requiring a
contractor, subcontractor, or agent to comply with an assessment issued by an investigator
pursuant to section 177.43 or 177.44. The department shall serve the order upon the
contractor, subcontractor, or agent, or the party's authorized representative, in person
or by certified mail at the contractor's, subcontractor's, or agent's place of business. A
contractor, subcontractor, or agent 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 according to sections 14.57
to 14.69. If, within 15 calendar days after being served with the order, the contractor,
subcontractor, or agent fails to file a written notice of objection with the commissioner, the
order becomes a final order of the commissioner.
new text end

new text begin Subd. 7. new text end

new text begin Contractor, subcontractor, or agent liability. new text end

new text begin If the commissioner issues
a compliance order under subdivision 6, the commissioner shall order the contractor,
subcontractor, or agent to cease and desist from engaging in the violative practice and
to take such affirmative steps that in the judgment of the commissioner will effectuate
the purposes of the section violated. The commissioner shall order the contractor,
subcontractor, or agent to pay the assessed amounts to the department and the department
shall distribute to the affected laborers or mechanics the portions of the assessment
designated for the laborer or mechanic. Any contractor, subcontractor, or agent that is
found by the commissioner to have repeatedly or willfully violated a section or sections
identified in subdivision 6 shall be subject to a civil penalty of up to $1,000 for each
violation for each laborer or mechanic. In determining the amount of a civil penalty
under this subdivision, the appropriateness of the penalty to the size of the contractor's,
subcontractor's, or agent's business and the gravity of the violation shall be considered.
In addition, the commissioner may order the contractor, subcontractor, or agent to
reimburse the department and the attorney general for all appropriate litigation and hearing
costs expended in preparation for and in conducting the contested case proceeding,
unless payment of costs would impose extreme financial hardship on the contractor,
subcontractor, or agent. If the contractor, subcontractor, or agent is able to establish
extreme financial hardship, then the commissioner may order the contractor, subcontractor,
or agent to pay a percentage of the total costs that will not cause extreme financial
hardship. Costs include but are not limited to the costs of services rendered by the attorney
general, attorneys for the department, private attorneys if engaged by the department,
administrative law judges, court reporters, expert witnesses, and the cost of transcripts.
Interest shall accrue on and be added to the unpaid balance of a commissioner's order from
the date the order is signed by the commissioner until it is paid, at an annual rate provided
in section 549.09, subdivision 1, paragraph (c). The commissioner may establish escrow
accounts for purposes of distributing damages.
new text end

new text begin Subd. 8. new text end

new text begin Civil actions. new text end

new text begin The commissioner may bring an action in the district court
where a contractor, subcontractor, or agent resides or where the commissioner maintains
an office to enforce or require compliance with orders issued under subdivision 6 or 7.
new text end

new text begin Subd. 9. new text end

new text begin Legal actions; injunctions. new text end

new text begin Whenever it appears to the commissioner that
a person has engaged or is about to engage in any act or practice constituting a violation of
this section or order related to the duties and responsibilities entrusted to the commissioner,
the commissioner may bring an action in the name of the state in Ramsey County District
Court or the district court of an appropriate county to enjoin the acts or practices and to
enforce compliance, or the commissioner may refer the matter to the attorney general or
the county attorney of the appropriate county. A permanent injunction or other appropriate
relief must be granted based solely upon a showing that the person has engaged or is about
to engage in an act or practice constituting a violation of a law, rule, or order related to the
duties and responsibilities entrusted to the commissioner. The terms of this subdivision
govern an action brought under this subdivision, including an action against a person who,
for whatever reason, claims that the subject law, rule, or order does not apply to the person.
new text end

new text begin Subd. 10. new text end

new text begin Powers additional. new text end

new text begin The powers contained in sections 177.41 to 177.46
are in addition to all other powers of the commissioner of labor and industry, commissioner
of transportation, and any contracting authority.
new text end

Sec. 13.

new text begin [177.46] COURT ACTIONS; PRIVATE PARTY CIVIL ACTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Civil action; damages. new text end

new text begin A laborer or mechanic may bring a civil
action seeking redress for violations of sections 177.41 to 177.46 directly to district court.
A contractor, subcontractor, or agent who is found to have violated sections 177.41 to
177.46 is liable to the aggrieved party for all unpaid wages. A contractor, subcontractor,
or agent who is found to have violated sections 177.41 to 177.46 is also liable for
compensatory damages, interest on the unpaid wages at the statutory rate, liquidated
damages equal to three times the wages owed, punitive damages for repeated or willful
violations, and any other appropriate relief including, but not limited to, injunctive relief.
The contracting authority must provide the laborer or mechanic bringing the action
any and all requested project records, including certified payrolls with Social Security
numbers redacted, after written notice, and that has been deemed to be a public record, at
a reasonable cost.
new text end

new text begin Subd. 2. new text end

new text begin District court jurisdiction. new text end

new text begin An action brought under subdivision 1 may be
filed in the district court of the county where a violation is alleged to have been committed,
where the respondent resides or has a principal place of business, where the contracting
authority has its main office, or any other court of competent jurisdiction.
new text end

new text begin Subd. 3. new text end

new text begin Persons who may sue. new text end

new text begin An action authorized by this section may be
maintained against any contractor, subcontractor, or agent by any one or more laborers
or mechanics for and on behalf of themselves and other laborers or mechanics similarly
situated. No laborer or mechanic must be a party plaintiff to any action authorized by this
section unless the laborer or mechanic gives consent in writing to become a party and the
consent is filed in the court in which the action is brought.
new text end

new text begin Subd. 4. new text end

new text begin Discovery allowed. new text end

new text begin Upon request, a contractor, subcontractor, or agent
against whom an action authorized by this section is brought, must provide to any plaintiff
records kept in the normal course of its business that show all laborers or mechanics
working on the project including the last known address, hours worked, classifications
worked, and wages and benefits paid for the work performed, with Social Security
numbers redacted from those records. The records must be provided without court
order. If a contractor, subcontractor, or agent refuses to provide this information without
court order, the court must include in the order a provision requiring the contractor,
subcontractor, or agent to pay the reasonable attorney fees and costs incurred by the
laborer or mechanic in bringing a motion for the court order.
new text end

new text begin Subd. 5. new text end

new text begin Attorney fees and costs. new text end

new text begin In an action brought under subdivision 1, the
court shall order any entity who is found to have committed a violation to pay to the
aggrieved party reasonable costs, disbursements, witness fees, and attorney fees.
new text end

new text begin Subd. 6. new text end

new text begin Civil penalty. new text end

new text begin In an action brought under subdivision 1, the court shall
order any entity who is found to have committed a violation to pay a civil penalty equal
to 100 percent of the total damages awarded to all plaintiffs in the action, including
the fees and costs awarded under subdivision 5, to the agency or contracting authority
responsible for enforcing the Prevailing Wage Act with respect to the project, to be used in
future enforcement efforts.
new text end

Sec. 14.

Minnesota Statutes 2006, section 471.345, is amended by adding a subdivision
to read:

new text begin Subd. 20. new text end

new text begin Debarred entities. new text end

new text begin Notwithstanding any other provision of this section,
municipalities must comply with sections 177.43 and 177.44 with respect to awarding any
contracts subject to sections 177.41 to 177.46.
new text end

Sec. 15.

Minnesota Statutes 2006, section 574.26, subdivision 2, is amended to read:

Subd. 2.

Terms.

Except as provided in sections 574.263 and 574.264 or if the
amount of the contract is $75,000 or less, a contract with a public body for the doing of
any public work is not valid unless the contractor gives (1) a performance bond to the
public body with whom the contractor entered into the contract, for the use and benefit of
the public body to complete the contract according to its terms, new text begin which includes claims by
the contracting authority to ensure proper payment to the individual laborer or mechanic
working on the project to ensure the contractor is in compliance with sections 177.41 to
177.46, new text end and conditioned on saving the public body harmless from all costs and charges
that may accrue on account of completing the specified work, and (2) a payment bond
for the use and benefit of all persons furnishing labor and materials engaged under, or
to perform the contract, conditioned for the payment, as they become due, of all just
claims for the labor and materials. Reasonable attorneys' fees, costs, and disbursements
may be awarded in an action to enforce claims under the act if the action is successfully
maintained or successfully appealed.

Sec. 16.

Minnesota Statutes 2006, section 574.31, subdivision 2, is amended to read:

Subd. 2.

Claims on payment bonds.

(a) In the event of a claim on a payment
bond by a person furnishing labor and materials, no action shall be maintained on the
payment bond unless, within 120 days after completion, delivery, or provision by the
person of its last item of labor and materials, for the public work, the person serves written
notice of claim under the payment bond personally or by certified mail upon the surety
that issued the bond and the contractor on whose behalf the bond was issued at their
addresses as stated in the bond specifying the nature and amount of the claim and the
date the claimant furnished its last item of labor and materials for the public work. The
addresses of the contractor and the surety listed on the bond must be addresses at which
the companies are authorized to accept service of the notice of the claim. If an agent or
attorney-in-fact is authorized to accept service of notice of the claim for the contractor
or surety, that fact must be expressly stated in the bond along with the address of the
agent or attorney-in-fact at which service of the notice of the claim can be made. For the
purpose of this section, notice is sufficient if served personally or via certified mail to the
addresses of the contractor and surety listed on the bond. new text begin Provided, however, that if there
is a violation of law involving the contractor providing the bond, or any subcontractor
or agent of the contractor, the 120 days begins to run from the date the violations are
resolved, either through the public body or through court action. new text end The form of notice is
sufficient if it is substantially as follows:

NOTICE OF CLAIM ON PAYMENT BOND FOR PUBLIC WORK

	TO: .
	(Surety that issued payment bond)
	and .
	(The contractor on whose behalf the bond was issued)
	NOTICE IS HEREBY GIVEN that the undersigned claimant has a claim against the above named surety for labor and materials furnished by the undersigned for the public work described as follows: .
	.
	(Description of the public work)
	The labor and materials were furnished under a contract or agreement with
	.
	(Name and address of contractor or supplier requesting labor and materials from the claimant)
	The nature of the labor and materials furnished is as follows: .
	.
	The amount of the claim is: .
	The date the claimant last furnished labor and materials to this public work is the ...... day of ......................., ............
	Claimant seeks payment of the claim according to the law.

		.
		Claimant
		.
		Address
	.
	STATE OF .
	ss.
	COUNTY OF .
	................................. being duly sworn on oath says that ...... is ......................... of the claimant named above and has knowledge of the claim and that the claim is correct, and no part of the claim has been paid.
		.
	Signed and sworn to before me on . , . ,
	by .	(Notary Seal)
	.
	Notary Public

(b) If the contractor providing the payment bond fails to comply with the filing
requirements of section 574.28 by failing to state both its address and the address of the
surety providing the bond, then a claimant under the bond need not provide either the
surety or the contractor written notice of its claim under paragraph (a).

(c) An action to enforce a claim against the surety under the bond must be
commenced within one year from the date of completion, delivery, or provision by the
claimant of its last item of labor and materials for the public work stated in its notice of
claim. new text begin Provided, however, that if there is a violation of law involving the contractor
providing the bond, or any subcontractor or agent of the contractor, the one year begins to
run from the date the violations are resolved, either through the public body or through
court action. new text end If no notice of claim was required because the contractor providing the bond
failed to comply with the requirements of section 574.28, then any action under the bond
must be commenced within one year from the actual date of completion, delivery, or
provision by the claimant of its last item of labor and materials for the public work. Any
other person having a cause of action on a payment bond may be admitted, on motion, as a
party to the action, and the court shall determine the rights of all parties. If the amount
realized on the bond is insufficient to discharge all the claims in full, the amount must be
prorated among the parties.

(d) The claimant can extend the time within which to bring an action to enforce a
claim under the bond to beyond that specified in paragraph (c) either by: (1) written
stipulation between the claimant and surety stating the extended deadline and executed by
both parties before the expiration of one year from the actual date of completion, delivery,
or provision by the claimant of its last item of labor and materials for the public work; or
(2) written notice extending by one year the deadline specified in paragraph (c) sent by
the claimant to the surety via certified mail 90 days before the expiration of the deadline
specified in paragraph (c), which notice is not objected to in a return written notice sent
by the surety to the claimant via certified mail within 30 days after the surety's receipt of
claimant's notice. If a claimant's payment is not yet contractually due within one year from
the actual date of completion, delivery, or provision by the claimant of its last item of labor
and materials, the court shall continue and not dismiss the action until the payment is due.