HF 722

as introduced - 87th Legislature (2011 - 2012) Posted on 02/28/2011 09:45am

A bill for an act
relating to labor and employment; modifying wage and hour provisions;
amending Minnesota Statutes 2010, sections 177.42; 177.43; 177.44; proposing
coding for new law in Minnesota Statutes, chapter 177; repealing Minnesota
Statutes 2010, section 177.435; Minnesota Rules, parts 5200.1020, subparts 1,
2, 4, 5, 6, 7; 5200.1030, subparts 1, 2, 2a; 5200.1035; 5200.1040; 5200.1050,
subparts 1, 2, 2a, 2b, 2c, 3a, 4; 5200.1060; 5200.1080; 5200.1090; 5200.1100;
5200.1105; 5200.1106; 5200.1120.

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

Section 1.

Minnesota Statutes 2010, section 177.42, is amended to read:

177.42 DEFINITIONS.

Subdivision 1.

Scope.

As used in sections 177.41 to 177.44 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 deleted text begin in whole or part deleted text end by state funds new text begin in an
amount that is equal to or greater than 50 percent of total project costs new text end .

Subd. 3.

Area.

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

deleted text begin Subd. 4. deleted text end

deleted text begin Prevailing hours of labor. deleted text end

deleted text begin "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.
deleted text end

deleted text begin Subd. 5. deleted text end

deleted text begin Hourly basic rate. deleted text end

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

deleted text begin Subd. 6. deleted text end

deleted text begin Prevailing wage rate. deleted text end

deleted text begin "Prevailing wage rate" means the hourly basic rate
of pay plus the contribution paid to or for the largest number of workers engaged in the
same class of labor within the area for medical or hospital care, pensions on retirement
or death, compensation for injuries or illness resulting from occupational activity, or
insurance to provide any of the foregoing, for unemployment benefits, life insurance,
disability and sickness insurance, or accident insurance, for vacation and holiday pay, for
defraying the costs of apprenticeship or other similar programs, or for other bona fide
fringe benefits, but only where the contractor or subcontractor is not required by other
federal, state, or local law to provide any of those benefits, the amount of:
deleted text end

deleted text begin (1) the rate of contribution irrevocably made by a contractor or subcontractor to a
trustee or to a third person under a fund, plan, or program; and
deleted text end

deleted text begin (2) the rate of costs to the contractor or subcontractor that may be reasonably
anticipated in providing benefits to laborers and mechanics pursuant to an enforceable
commitment to carry out a financially responsible plan or program which was
communicated in writing to the laborers and mechanics affected.
deleted text end

deleted text begin "Prevailing wage rate" includes, for the purposes of section 177.44, rental rates for
truck hire paid to those who own and operate the truck.
deleted text end

deleted text begin The prevailing wage rate may not be less than a reasonable and living wage.
deleted text end

Subd. 7.

Employer.

"Employer" means an individual, partnership, association,
corporation, business trust, or other business entity that hires a laborer, worker, or
mechanic.

new text begin Subd. 8. new text end

new text begin Prevailing wage rate. new text end

new text begin Rates of pay and classifications will be the same as
those determined under United States Code, title 40, section 3141, et seq., as amended.
new text end

Sec. 2.

Minnesota Statutes 2010, 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 hourly basic rate of pay; and

(2) a laborer or mechanic may 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.

Subd. 2.

Exceptions.

new text begin This section does not apply to wage rates and hours of
employment of owners, supervisors, or registered apprentices. new text end 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. The contracting
authority shall incorporate into its proposals and all contracts the applicable wage
determinations for the contract along with contract language provided by the commissioner
of labor and industry to notify the contractor and all subcontractors of the applicability of
sections 177.41 to 177.44. Failure to incorporate the determination or provided contract
language into the contracts shall make the contracting authority liable for making whole
the contractor or subcontractor for any increases in the wages paid, including employment
taxes and reasonable administrative costs based on the appropriate prevailing wage due to
the laborers or mechanics working on the project. The contract must also provide that the
contracting agency shall demand, and the contractor and subcontractor shall furnish to the
contracting agency, copies of any or all payrolls not more than 14 days after the end of
each pay period. The payrolls must contain all the data required by section 177.30. The
contracting authority may examine all records relating to wages paid laborers or mechanics
on work to which sections 177.41 to 177.44 apply. new text begin Notwithstanding section 177.42,
subdivision 8, employer determinations of worker classifications that are reasonable and
consistent with widespread industry practices within the state will be upheld.
new text end

Subd. 4.

Determination by commissioner; posting; petition for reconsideration.

The prevailing wage rates deleted text begin , prevailing hours of labor, deleted text end and hourly basic rates of pay for all
trades and occupations required in any project must be ascertained before the state asks for
bids. The commissioner of labor and industry shall investigate as necessary to ascertain
the information. Each contractor and subcontractor performing work on a public project
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 begin A person aggrieved by a final
determination of the commissioner may petition the commissioner for reconsideration of
findings. 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.
deleted text end

Subd. 5.

Penalty.

It is a misdemeanor for an officer or employee of the state to
execute a contract for a project without complying with this section, or for a contractor,
subcontractor, or agent 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 not more than $700,
or imprisonment for not more than 90 days, or both. Each agent or subcontractor shall
furnish to the contractor evidence of compliance with this section. Each day a violation of
this section continues is a separate offense.

Subd. 6.

Examination of records; investigation by the department.

The
Department of Labor and Industry shall enforce this section. The department may
demand, and the contractor and subcontractor shall furnish to the department, copies
of any or all payrolls. The department may examine all records relating to wages paid
laborers or mechanics on work to which sections 177.41 to 177.44 apply. The department
shall employ at least three investigators to perform on-site project reviews, receive and
investigate complaints of violations of this section, and conduct training and outreach
to contractors and contracting authorities for public works projects financed in whole
or in part with state funds. new text begin The department must issue a compliance order or notify
the interested parties that no further action will be pursued no later than 30 days after
receiving employment records related to a dispute.
new text end

Subd. 6a.

Prevailing wage violations.

Upon issuing a compliance order to an
employer pursuant to section 177.27, subdivision 4, for violation of sections 177.41 to
177.44, the commissioner shall issue a withholding order to the contracting authority
ordering the contracting authority to withhold payment of sufficient sum to the prime
or general contractor on the project to satisfy the back wages assessed or otherwise
cure the violation, and the contracting authority must withhold the sum ordered until
the compliance order has become a final order of the commissioner and has been fully
paid or otherwise resolved by the employer.

During an investigation of a violation of sections 177.41 to 177.44 which the
commissioner reasonably determines is likely to result in the finding of a violation of
sections 177.41 to 177.44 and the issuance of a compliance order pursuant to section
177.27, subdivision 4, the commissioner may notify the contracting authority of the
determination and the amount expected to be assessed and the contracting authority shall
give the commissioner deleted text begin 90 deleted text end new text begin 30 new text end days' prior notice of the date the contracting authority
intends to make final payment.

Subd. 7.

Applicability.

This section does not apply to a contract, or work under
a contract, under which deleted text begin :
deleted text end

deleted text begin (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
deleted text end

deleted text begin (2) deleted text end the estimated total cost of completing the project is less than deleted text begin $25,000 and more
than one trade or occupation is required to complete it deleted text end new text begin $500,000 new text end .

new text begin Subd. 8. new text end

new text begin Enforcement fee. new text end

new text begin Within 30 days of executing a contract under sections
177.42 to 177.436, contracting agencies must transfer $5,000 to the Department of Labor
and Industry in order to help defray enforcement costs under sections 177.42 to 177.436.
new text end

Sec. 3.

new text begin [177.436] DETERMINATION OF APPRENTICE WAGES.
new text end

new text begin Subdivision 1. new text end

new text begin Procedure. new text end

new text begin The graduated schedule of wages under an apprenticeship
agreement shall be calculated on the percentage rate used in the majority of individual
apprenticeship agreements on file with the Division of Voluntary Apprenticeship in any
particular trade. The wage must be equal to or exceed the federal or state minimum wage
rate, whichever is higher.
new text end

new text begin Subd. 2. new text end

new text begin Journeyman wage rate. new text end

new text begin The journeyman wage rate for apprenticeship
agreements where no bargaining agreement exists shall be determined based on an average
of all journeyman workers currently employed by the sponsoring company at the same
location where apprentices are employed. When employed on a public work project,
apprentices shall be paid a portion of the prevailing wage rate.
new text end

new text begin Subd. 3. new text end

new text begin Exceptions. new text end

new text begin Programs in penal institutions including stipends paid by the
Department of Corrections are exempt from the requirements of this section.
new text end

Sec. 4.

Minnesota Statutes 2010, section 177.44, is amended to read:

177.44 HIGHWAY 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 1971, section
161.32, to which the state is a party, for the construction or maintenance of a highway, may
not be permitted or required to work longer than deleted text begin the prevailing hours of labor deleted text end new text begin 40 hours
per week new text end unless the laborer or mechanic is paid for all hours in excess of deleted text begin the prevailing
hours deleted text end new text begin 40 hours per week new text end at a rate of at least 1-1/2 times the hourly basic rate of pay of the
laborer or mechanic. The laborer or mechanic must be paid at least the prevailing wage
rate in the same or most similar trade or occupation in the area.

Subd. 2.

Applicability.

new text begin This section does not apply to wage rates and hours of
employment of owners, supervisors, and registered apprentices. 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.

deleted text begin Subd. 3. deleted text end

deleted text begin Investigations by Department of Labor and Industry. deleted text end

deleted text begin The Department
of Labor and Industry shall conduct investigations and hold public hearings necessary to
define classes of laborers and mechanics and to determine the hours of labor and wage
rates prevailing in all areas of the state for all classes of labor and mechanics commonly
employed in highway construction work, so as to determine prevailing hours of labor,
prevailing wage rates, and hourly basic rates of pay.
deleted text end

deleted text begin The department 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.
deleted text end

Subd. 4.

Certification of hours and rate.

deleted text begin 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 and 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 and mechanics in an area. The certification
must specifically state the effective dates of future hours and rates when they are certified. deleted text end new text begin
Rates of pay and classifications will be the same as those determined under United States
Code, title 40, section 3141, et seq., as amended. new text end If a construction project extends into
more than one area there shall be only one standard of hours of labor and wage rates
for the entire project. deleted text begin A person aggrieved by a final determination of the commissioner
may petition the commissioner for reconsideration of findings. 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.
deleted text end

Subd. 5.

Hours and rates to be posted.

The deleted text begin prevailing hours of labor, the deleted text end
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 highway construction contract to which the state is a party. These hours, rates,
and classifications, together with the provisions of subdivision 6, must be kept posted
on the project by the employer in at least one conspicuous place for the information of
employees working on the project.

Subd. 6.

Penalties.

A contractor, subcontractor, or agent who violates this section is
guilty of a misdemeanor and may be fined not more than $300 or imprisoned not more
than 90 days or both. Each day that the violation continues is a separate offense.

Whoever induces a job applicant or employee on any project subject to this section
to give up or forgo 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 may be fined not exceeding $1,000 or imprisoned not more than one year or both.

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, may be fined
not exceeding $40 or imprisoned not more than 30 days or both. Each day any violation of
this paragraph continues is a separate offense.

Subd. 7.

Department of Transportation to enforce.

The Department of
Transportation shall require adherence to this section. The commissioner of transportation
may demand and every contractor and subcontractor shall furnish copies of payrolls. The
commissioner of transportation may examine all records relating to hours of work and
the wages paid laborers and mechanics on work to which this section applies. 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. new text begin The department must issue a compliance
order or notify the interested parties that no further action will be pursued no later than 30
days after receiving employment records related to a dispute.
new text end

Sec. 5. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, section 177.435, new text end new text begin and new text end new text begin Minnesota Rules, parts 5200.1020,
subparts 1, 2, 4, 5, 6, and 7; 5200.1030, subparts 1, 2, and 2a; 5200.1035; 5200.1040;
5200.1050, subparts 1, 2, 2a, 2b, 2c, 3a, and 4; 5200.1060; 5200.1080; 5200.1090;
5200.1100; 5200.1105; 5200.1106; and 5200.1120, new text end new text begin are repealed.
new text end