Acting on industrywide confusion over the state’s new prevailing-wage requirements, the Associated Builders & Contractors of Wisconsin Inc. on Friday requested an injunction to block enforcement of the law.
“On the most basic level, it’s a bad law,” said John Mielke, ABC vice president.
ABC filed the request in Dane County Circuit Court and expects a judge’s ruling before Feb. 7, which is the deadline for contractors to file prevailing-wage reports with the state under the new law.
The association, Mielke said, wants to overturn the law, but there is a chance a judge would temporarily suspend payroll reporting while analyzing the state Department of Workforce Development’s interpretation of the law.
Contractors are stumped over how to complete the new prevailing-wage reports, where to send them and how to get questions answered and the form submitted by the Feb. 7 deadline.
“This is a law I’m supposed to be complying with that is impossible to comply with,” said Roger Thimm, controller of Iron Ridge-based Wondra Construction Inc. “There’s nothing out there telling me how to do this report or submit to the state. And what does it mean if I’m not in compliance? Debarment? Fines?”
According to the law, the state can penalize contractors for failure to comply, but Wisconsin Department of Workforce Development spokesman Dick Jones said the department will not be quick to enforce those penalties.
The DWD in January finalized the spreadsheet for contractors to complete each month when providing prevailing-wage information. The new prevailing-wage law took effect Jan. 1.
According to the law, approved in June as part of the state budget, contractors must prove they are paying prevailing wages to employees working on state and local government public works projects valued at $25,000 or more. Under previous law, the proof was not required unless the project was valued at $234,000 or more.
Prevailing wages are based on annual contractor survey results that show what workers are paid on private projects. The state uses the results to set a prevailing wage in each county for a particular type of job.
Jones said department officials are working with employers to help them properly file the reports that prove prevailing-wage payments, but he said he is unsure all questions will be answered by Feb. 7.
“This is a transition period,” he said. “We are hoping that employers that do have questions contact the Bureau of Labor Standards, and we do realize there will be issues.”
The delay in getting the report spreadsheets to contractors, Jones said, stems from the DWD’s information technology department needing time to develop computer programs that safeguard information such as Social Security numbers.
But Mielke said the reporting table DWD wants contractors to complete was only finalized in January and requires more detailed information than that requested in the state budget.
“I get that this was thrust upon them in the budget, but that was in June,” he said. “I don’t think DWD has their system honed yet, and they’re asking contractors for a lot of information. There’s not enough time for contractors to see what DWD wants, adjust their system and get this done by Sunday.”
The state budget called for reports to include contractors’ names, the type of work performed by every employee on a prevailing-wage project, an accurate record of all hours worked and the wages paid for that work.
But instead of breaking the reporting sheet into those four fields, DWD gave contractors 50 fields, including requests for Social Security numbers, straight and overtime hours for each day, weekly wage and hour totals, union status and union affiliation.
With the project value threshold at $25,000, small contractors are more likely to deal with compliance, said Jim Boullion, government affairs director for the Associated General Contractors of Wisconsin. If those companies don’t have automated payroll systems, he said, the reporting is going to take more than a week to understand.
DWD, Thimm said, failed contractors by not having a logical process to ease the transition to the new reporting system.
“I need time for my software providers to get up to speed,” he said. “We need to know the format, the logic.
“I was expecting to see this stuff in September. Now the deadline’s here, and there are a lot of questions I don’t have answered.”
ABC’s action Friday could buy more time for contractors such as Wondra.
“But the basis of this injunction,” Mielke said, “is the DWD going far beyond what the state statute says.”
Just don’t call it a grace period
In government, the tendency sometimes is to define something by spelling out what it is not, then leaving it up to the governed to determine the meaning.
For instance, Dick Jones, spokesman for the Wisconsin Department of Workforce Development, said state law does not let the department provide a grace period for contractors that miss the Feb. 7 prevailing-wage reporting deadline.
State law does let the DWD penalize contractors for missing the deadline.
“But we’re not going to be quick to take enforcement action,” Jones said. “We’re going to work with employers to file as the law specifies.”
So, does that mean contractors will get a grace period if they miss the deadline?
“The statute doesn’t allow us to say there is a grace period,” he said. “But we won’t be quick to enforce penalties.”
— Paul Snyder