The Wisconsin Legislature now is involved in an ongoing battle over whether the state’s prevailing wage rules should apply to municipal turnkey projects.
The Assembly Committee on Labor soon will review a bill by state Rep. Mark Gottlieb, R-Port Washington, that says prevailing wage law should not apply to projects that include portions of work — such as roads or bridges — paid for by a private owner or developer but then turned over to the state or local government after completion.
The proposal is in response to a Feb. 23 decision by the Wisconsin Department of Workforce Development that requires prevailing wages be paid on projects wherein private developers build utilities and streets and give ownership of them to local governments.
The state surveys contractors annually to find how what they pay workers on private projects. It uses the results to set the prevailing wage for each county.
The Construction Business Group spurred the DWD decision after filing prevailing-wage complaints against 13 projects. The CBG is financed by the contractors and workers covered by the International Union of Operating Engineers Local 139 collective bargaining agreements.
But with the economy in a rut, Gottlieb said, it is not the right time to expand prevailing wage law.
“The (DWD) ruling turned the law on its head and confused where people stood on it,” he said. “This was an overreach by an executive agency, and obviously an orchestrated effort to try to expand (the law’s) reach.”
On the contrary, Robb Kahl, executive director of the CBG, said the DWD ruling confirmed the true intent of Wisconsin’s prevailing wage law. He said his organization’s next move will be drafting a bill to compete with Gottlieb’s.
“Let’s take the language that’s been drafted for us (by Gottlieb) and make a few changes,” Kahl said. “If the intent is to legislate an overturn of the position of DWD, why wouldn’t we make a push to try to legislatively codify this decision of DWD?”
Although the bill is designed to reverse the DWD’s ruling, it also could conflict with the prevailing wage rules in the proposed state budget, said Dan Thompson executive director of the League of Wisconsin Municipalities. Gov. Jim Doyle’s proposed budget would require prevailing wages be paid on all projects that receive at least $2,000 in public money.
“They both can’t pass” Thompson said, “or whichever one is passed last would repeal the one before it.
“They are two competing bills. I can’t imagine under which circumstances both would be passed.”
Gottlieb said if the prevailing wage provision in the budget passes, it could override his bill. If the bill does not gain legislative support, he said he would not make an immediate second try.
“We can see the outcome,” Gottlieb said. “And then maybe people will think long and hard about if they want to see those changes remain intact. They have the opportunity now to fix this.”
The Associated Builders & Contractors of Wisconsin Inc. supports Gottlieb’s bill, said ABC Vice President John Mielke. But he said the more expansive prevailing wage change proposed by the governor in his budget highlights how minor modifications to the law may only happen in a circular manner.
“This is interesting,” he said. “You couldn’t see this kind of tit for tat under previous Legislatures. But based on the governor’s bill, that balance has been upset and now you only have one avenue to challenge it, and that’s with these bills. So now you see this constant ping-ponging back and forth.”
Kahl said a change to the prevailing wage statutes would kill the possibility of lawsuits over the 13 projects affected by the recent DWD decision. Both he and Thompson said they would prefer to settle the dispute through the Legislature rather than in court.
“It’ll be quicker, less costly and more direct to try to codify what the (DWD) decision has been,” Kahl said.
As of Thursday, Chippewa Falls was the only city involved in the CBG complaints that had filed an appeal disagreeing with the DWD decision, said Richard Jones, DWD agency liaison.
Gottlieb said it might be time for a serious legislative reconsideration of the state’s prevailing wage law.
“It’s become a divisive issue, and the DWD ruling is one reason why,” he said. “If you want to do a complete and thorough review of prevailing wage in this state, I’m all for it, because it’s only going to continue to be a contentious issue.
“The more expansive you try to make the law, the more burdensome it becomes.”