APPRENTICE WAGE LAW

In the fall of 2005, the Minnesota Department of Labor and Industry (DOLI) proposed a rule change that would lower 81% of the wage rates of construction apprentices.

• Analysis of proposed change

SUPPORTING THE PROPOSED RULE WERE:

• DOLI
• Associated Builders and Contractors (ABC); and
• A small group of construction contractors

OPPOSING THE PROPOSED RULE WERE:

• The Quality Construction Coalition
• Construction employer associations representing nearly 1,000 Minnesota construction contractors;
• Community Groups; and
• The Minnesota State Building Trades and its affiliated unions and their thousands of members and apprentices.

QCC ACTION:

QCC members joined together to form a legal and political strategy to fight the proposed rule including commissioning a study of its adverse economic effects.
More than 10,000 letters were written in opposition to DOLI’s rule proposal.
Several hundred people attended the administrative law rulemaking hearing on February 27, 2006.

Those testifying against the proposed rule included Minnesota Building Trades President Dick Anfang; President of the State Apprenticeship Program Coordinators Association Buck Palsrud; Registered Apprentices Clayton Oachs and Holly Patenaude; Contractors Bob Swanson of Swanson & and Youngdale and Jim Wagner of Hunt Electric; Labor Economist and University Professor Dr. Lisa Jordan; Attorney Brendan Cummins on behalf of the State Building Trades; and Attorney John Nesse who represented several Minnesota Construction Employer Associations.

QCC SUCCESS:

Administrative Law Judge Luis issued his report on April 21, 2006, concluding that DOLI’s proposed rule is “unreasonable and violates substantive principles of law.”

WHAT’S NEXT?

The DOLI has stated that they will continue to pursue ways to pay apprentices in state-registered programs lower wages. The QCC continues to monitor this situation.

• Prevailing Wage Fact Sheet
• Response to KARE 11 News
  Report of May 1, 2008

In 2006 the Minnesota Legislature posed four questions for the Legislative Auditor regarding the Minnesota Prevailing Wage Act. In order to assist the Legislative Auditor in work, the Quality Construction Coalition commissioned a study to look at those same four questions.

The QCC study found:

• The survey method that the Department of Labor and Industry currently uses to gather data for determining prevailing wage rates is both valid and reliable.
• Minnesota’s modal method of determining prevailing wage rates is appropriate. A survey of state legislation shows that the majority of states with prevailing wage laws and the federal government apply some form of modal method.
• The enforcement of prevailing wage in Minnesota appears to be constrained as it is in many states by a lack of resources.
• Prevailing wage does not appear to have any significant impact on the costs of public construction projects. Additionally, an analysis of Minnesota suggests that repealing or weakening the prevailing wage statute would cost the state between $37.8 and $178 million in tax revenues depending on which estimate of wage reduction one uses, and would result in weakening of apprenticeship training programs, an increase in injury rates, a weakening of the position of women and people of color in the construction industry, an increase in project cost overruns, and a reduction in construction employee wages.
  
• Evaluation of Prevailing Wage in Minnesota
• Appendix: Base Rate
• Appendix: Total Rate

Minnesota Legislative Auditor’s 2007 study

• Evaluation Report Prevailing Wages
  

1. Commission a Minnesota specific study to analyze the economic impacts of the Minnesota Prevailing Wage Law.
2. Create a Prevailing Wage Fact Sheet combining national research, state resources and a legal explanation of Minnesota’s prevailing wage law.
3. Develop and conduct workshops for legislators and local government officials.
4. Conduct Train-the-Trainer workshops to help employers and union leaders educate local area policy makers about Minnesota’s prevailing wage laws and registered apprenticeship programs.