Controversy surrounds wage rules

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February 17, 1999For the third year, the state of Wisconsin has issued its prevailing wages for public contracts using a survey of contractors, a method steeped in controversy. Under prevailing wage law, contractors hired for public projects must pay their employees a proscribed minimum wage. Each year, the Wisconsin Depart-ment of Workforce Development surveys about 18,000 contractors by mail, who return the form with information on wages and benefits for trades in specific areas. The contractors include out-of-state companies that do work in Wisconsin. The department uses the information to set prevailing wages on a trade-by-trade basis in all 72 counties. “There are five construction categories, so when we set the rates, we’re looking at similar types of construction characteristics, rather than comparing apples and oranges,” said Auric Gold, an investigator with the Department of Workforce Develop-ment. “We have to have a minimum 500 hours reported for each trade in a county to set each rate.” If the number of hours falls below 500, the trade hours in surrounding counties are added. If still no minimum is reached, another tier is added. If a trade still does not meet the requirement, a state average is taken. For all trades, a weighted average is used unless a majority of hours in a trade reports a similar rate. Preliminary rates are set late in the year, at which time corrections can be made by contractors or additional companies can submit information. The final rates are then determined and issued Jan. 1. Under the annual inflation adjustment, single-trade projects valued at $33,000 must use prevailing wages Multi-trade projects valued at at least $164,000 fall under prevailing wage guidelines.

Wide variation

According to the 1999 prevailing wages, carpenters’ rates vary from $12.39 per hour in Langlade County to $29.88 in Milwaukee, Ozaukee, Racine and Waukesha counties. Among electricians, the lowest paying county is Taylor at $17.14 with the highest, $34.02, in Milwaukee, Wash-ington and Waukesha. General laborers’ rates are at only $9.15 in Langlade County but $25.51 in Ozaukee. Plumbers will earn $14.05 on public projects in Burnett County and $31.72 in Green, Jefferson, Milwau-kee, Ozaukee, Washington and Waukesha. Sheet metal workers will earn $11.37 in Burnett County, but $32.74 in Kenosha and Racine.The rates from vary from year to year, but most of the higher-paying trades remain clustered in southern Wisconsin with amounts decreasing further north as population and development decreases. Carpenters’ wages in southeastern Wisconsin increased by as much as $1 in some counties, but electricians will be making almost $2 more than last year in the counties with the highest and lowest pay scales.

‘Quirky’ trades

“A few trades are quirks,” Gold said. “For example, I think a year or two ago in one county, a journeyman electrician rate was set at $7 or $8 an hour, which is exceedingly low.”The disparity in the rates and in changes from 1998 to 1999 are due in part to the nature of the process used to set the prevailing wages, industry representatives said. Only those contractors that can be located are represented in the survey.Underreporting of wages can skew the results for an individual trade or a specific county, especially for areas that have few contractors or construction workers. “The first year, people were still getting used to it and didn’t turn in many hours,” said Jim Boullion, director of legislation for the Asso-ciated Builders & Contractors of Wisconsin. “The second year there was a big jump, but then from last year to this year, there wasn’t much of a difference.” In 1997, the first year of the survey, 25 million hours were reported with 34 million last year. The most recent figures use 33 million hours. About 64 percent were reported by union contractors and 36 percent by non-union, or open shop, contractors. “Participation is about what we expected, but it still should be higher,” said Associate Director Jeffrey J. Beiriger of the Plumbing & Mechanical Contractors Association of Milwaukee and Southeastern Wisconsin. “It still comes down to a business decision, in terms of the time it takes to fill out a survey in relation to what they get out of it. We think it’s in everyone’s interest to know what the wage rates are in a given area.”

Alternative numbers

Members of construction organizations suggested allowing the survey to use numbers compiled by construction groups and labor unions, instead of solely relying on the surveys. “If you want millions of hours reported, use data that is already out there,” Beiriger said. “I’d like there to be a little more creativity to ease the burden on those doing good reporting.”ABC of Wisconsin is creating a computer program that should be ready in time for the next prevailing wage survey, which will be mailed by the Department of Workforce Development in July, to make reporting easier.

Reform possible

There also have been calls for reforming the enforcement of prevailing wage laws. Individuals can petition the Department of Work-force Development to investigate cases in which they believe they have not been correctly paid, or workers can initiate a civil case that can result in the award of double the owed wages and legal fees. By going through the department, efforts can also be made in securing money that is owed. “If there’s a complaint filed and it’s the contractor’s first time, (the state Department of Workforce Development) will send them everything — who the complainant is and everything — and tell them to self-audit,” said Gene Sippel, a field investigator with watchdog group Contractor Compliance. “That’s like letting the fox into the chicken coop to count the chickens.” Sippel said that such action was taken when complaints were made about wages at B.P. Phillips Construction Inc. of Green Bay.Changes may be made in technical provisions of prevailing wage regulations, such as defining certain words or describing when one person’s work classification becomes another when he or she switches jobs. Following two meetings, the most recent of which was held Friday, a group of state personnel, construction organizations and union representatives agreed on administrative changes that will be taken up by the state Legislature. “The group actually works pretty well together, now that we’ve gotten over the notion we’re going to keep the law the way it was or repeal the law, because we’re shareholders in it and it has to work for everyone,” Beiriger said.