1.1                          A bill for an act 
  1.2             relating to employment; modifying provisions governing 
  1.3             payment of wages on state projects; amending Minnesota 
  1.4             Statutes 1998, sections 116J.871, subdivision 2; 
  1.5             177.41; 177.42; 177.43; 177.44; and 471.345, 
  1.6             subdivision 7; repealing Minnesota Statutes 1998, 
  1.7             section 177.435. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1998, section 116J.871, 
  1.10  subdivision 2, is amended to read: 
  1.11     Subd. 2.  [PREVAILING WAGE REQUIRED.] A state agency may 
  1.12  provide financial assistance to a person only if the person 
  1.13  receiving or benefiting from the financial assistance certifies 
  1.14  to the commissioner of labor and industry that laborers and 
  1.15  mechanics at employees employed in connection with and directly 
  1.16  on the project work site of any project meeting the requirements 
  1.17  of sections 177.42, subdivision 2, and 177.43, subdivision 7, 
  1.18  during construction, installation, remodeling, and repairs for 
  1.19  which the financial assistance was provided will be paid the 
  1.20  prevailing wage rate as defined in section 177.42, subdivision 6.
  1.21     Sec. 2.  Minnesota Statutes 1998, section 177.41, is 
  1.22  amended to read: 
  1.23     177.41 [STATE PROJECTS AND STATE HIGHWAY CONSTRUCTION; 
  1.24  PUBLIC POLICY.] 
  1.25     It is in the public interest that public buildings and 
  1.26  other public works be constructed and maintained by the best 
  2.1   means and highest quality of labor reasonably available and that 
  2.2   persons working on public works be compensated according to the 
  2.3   real value of the services they perform.  It is therefore the 
  2.4   policy of this state that wages of laborers, workers, and 
  2.5   mechanics on projects financed in whole, or in the largest part 
  2.6   by state funds should be comparable to wages paid for similar 
  2.7   work in the community as a whole.  
  2.8      Sec. 3.  Minnesota Statutes 1998, section 177.42, is 
  2.9   amended to read: 
  2.10     177.42 [DEFINITIONS.] 
  2.11     Subdivision 1.  [SCOPE.] As used in sections 177.41 to 
  2.12  177.44 the terms defined in this section have the meanings given 
  2.13  them except where the context indicates otherwise.  
  2.14     Subd. 2.  [PROJECT.] "Project" means erection, 
  2.15  construction, remodeling, or repairing of a public building or 
  2.16  other public work, provided that:  (1) the project is directly 
  2.17  financed in whole or part by state funds which amount to at 
  2.18  least one-half of the cost of the project; and (2) the project 
  2.19  is not subject to United States Code, title 40, section 276a. 
  2.20     Subd. 3.  [AREA.] "Area" means the county or other locality 
  2.21  from which labor for any project is normally secured in which 
  2.22  the project is located, or, in the case of projects involving 
  2.23  multiple counties, the county in which the largest single part 
  2.24  of the project is located, or, where provided in subdivision 6, 
  2.25  the county within the same region which is nearest 
  2.26  geographically to the county in which the project, or the 
  2.27  largest single part of the project, is located.  
  2.28     Subd. 4.  [PREVAILING HOURS OF LABOR.] "Prevailing hours of 
  2.29  labor" means the hours of labor per day and per week worked 
  2.30  within the area by a larger number of workers of the same class 
  2.31  than are employed within the area for any other number of hours 
  2.32  per day and per week.  The prevailing hours of labor may not be 
  2.33  more than eight hours per day or more than 40 hours per week.  
  2.34     Subd. 5.  [HOURLY BASIC RATE.] "Hourly basic rate" means 
  2.35  the hourly wage paid to any employee employed in connection with 
  2.36  and directly on a project work site.  
  3.1      Subd. 6.  [PREVAILING WAGE RATE.] "Prevailing wage rate" 
  3.2   means the hourly basic hourly rate of pay plus the rate of 
  3.3   contribution or cost for health and welfare benefits, vacation 
  3.4   benefits, pension and retirement benefits, and any other fringe 
  3.5   benefit of economic benefit value paid or made available to the 
  3.6   largest number of workers employees engaged in the same class of 
  3.7   labor within the area and includes, for the purposes of section 
  3.8   177.44, rental rates for truck hire paid to those who own and 
  3.9   operate the truck., which has been determined to be prevailing 
  3.10  by the United States Department of Labor pursuant to United 
  3.11  States Code, title 40, section 276a, as amended from time to 
  3.12  time, and the decisions of the federal courts interpreting and 
  3.13  applying that statute.  If no prevailing wage rate has been 
  3.14  determined for that class of labor in the county in which the 
  3.15  project is located or in which the largest single part of the 
  3.16  project is located, within the last two years, then the 
  3.17  prevailing wage rate shall be the prevailing wage rate 
  3.18  determined for that class of labor in the county nearest to the 
  3.19  project within the same region, as defined in Minnesota Rules, 
  3.20  part 5200.1030, for which the prevailing wage rate for that 
  3.21  class of labor has been determined within the last two years.  
  3.22  If no prevailing wage has been determined for that class of 
  3.23  labor for any county within the same region within the last two 
  3.24  years, then the prevailing wage shall be the lawful minimum 
  3.25  wage.  The prevailing wage rate may not be less than a 
  3.26  reasonable and living wage.  
  3.27     Sec. 4.  Minnesota Statutes 1998, section 177.43, is 
  3.28  amended to read: 
  3.29     177.43 [CONTRACTS FOR STATE PROJECTS; PENALTY.] 
  3.30     Subdivision 1.  [HOURS OF LABOR.] Any contract and any bid 
  3.31  specification or request or invitation for proposal which 
  3.32  provides for a project must state that:  
  3.33     (1) no laborer or mechanic employee employed in connection 
  3.34  with and directly on the project work site by the contractor or 
  3.35  any subcontractor, agent, or other person doing or contracting 
  3.36  to do all or a part of the work of the project, is permitted or 
  4.1   required to work more hours than the prevailing hours of labor 
  4.2   unless paid for all hours in excess of the prevailing hours at a 
  4.3   rate of at least 1-1/2 times the hourly basic rate of pay; and 
  4.4      (2) a laborer or mechanic an employee employed in 
  4.5   connection with and directly on the project work site may not be 
  4.6   paid a lesser rate of wages than the prevailing wage rate in the 
  4.7   same or most similar trade or occupation in the area.  
  4.8      Subd. 2.  [EXCEPTIONS.] This section does not apply applies 
  4.9   only to wage rates and hours of employment of laborers or 
  4.10  mechanics employees employed in connection with and directly on 
  4.11  the work site of the project.  All other employees, including 
  4.12  but not limited to, employees who process or manufacture 
  4.13  materials or products or to the delivery of deliver materials or 
  4.14  products by or for commercial establishments which have a fixed 
  4.15  place of business from which they regularly supply processed or 
  4.16  manufactured materials or products.  This section applies to 
  4.17  laborers or mechanics who deliver, regardless of whether the 
  4.18  delivery does or does not involve the delivery of mineral 
  4.19  aggregate such as sand, gravel, or stone which is incorporated 
  4.20  into the work under the contract by depositing the material 
  4.21  substantially in place, directly or through spreaders, from the 
  4.22  transporting vehicle, are not subject to this section.  
  4.23     Subd. 3.  [CONTRACT AND BID REQUIREMENTS.] The contract and 
  4.24  any bid specification or request or invitation for proposal must 
  4.25  specifically state the prevailing wage rates, prevailing hours 
  4.26  of labor, and hourly basic rates of pay, and, if either does 
  4.27  not, the prevailing wage is not required to be paid. 
  4.28     Subd. 4.  [DETERMINATION CONFIRMATION BY COMMISSIONER.] The 
  4.29  prevailing wage rates, prevailing hours of labor, and hourly 
  4.30  basic rates of pay for all trades and occupations required in 
  4.31  any project must be ascertained in the manner required by 
  4.32  section 177.42, subdivision 6, before the state asks for bids.  
  4.33  The commissioner of labor and industry shall investigate as 
  4.34  necessary to ascertain the information confirm the prevailing 
  4.35  wage rates.  The commissioner shall keep the information The 
  4.36  schedule of prevailing rates for a project shall be posted on 
  5.1   the project in at least one conspicuous place the project office 
  5.2   or other appropriate place for the information of the employees 
  5.3   working on the project.  Any employer of employees employed in 
  5.4   connection with and directly on the work site of any project may 
  5.5   request additions or corrections to the schedule of prevailing 
  5.6   rates from the commissioner, who shall not unreasonably withhold 
  5.7   timely corrections or additions.  A person aggrieved by a final 
  5.8   determination of the commissioner may petition the commissioner 
  5.9   for reconsideration of findings.  A person aggrieved by a 
  5.10  decision of the commissioner after reconsideration may, within 
  5.11  20 days after the decision, petition the commissioner for a 
  5.12  public hearing in the manner of a contested case under sections 
  5.13  14.57 to 14.61. 
  5.14     Subd. 5.  [PENALTY.] It is a misdemeanor for an officer or 
  5.15  employee of the state to execute a contract for a project 
  5.16  without complying with this section, or for a contractor, 
  5.17  subcontractor, or agent to pay any laborer, worker, or mechanic 
  5.18  employee employed in connection with and directly on the project 
  5.19  work site a lesser wage for work done under the contract than 
  5.20  the prevailing wage rate as stated in the contract.  This 
  5.21  misdemeanor is punishable by a fine of not more than $700, or 
  5.22  imprisonment for not more than 90 days, or both.  Each agent or 
  5.23  subcontractor shall furnish make available to the contractor for 
  5.24  examination evidence of compliance with this section.  Each day 
  5.25  a violation of this section continues is a separate offense. 
  5.26     Subd. 6.  [EXAMINATION OF RECORDS.] The department of labor 
  5.27  and industry shall enforce this section.  The department 
  5.28  may demand examine, and the contractor and subcontractor 
  5.29  shall furnish make available to the department for 
  5.30  examination, copies of any or all payrolls.  The department may 
  5.31  examine all payroll records relating to wages paid laborers or 
  5.32  mechanics employees on work to which sections 177.41 to 177.44 
  5.33  apply, provided that the records and any information derived 
  5.34  from the department's examination of them shall be deemed to be 
  5.35  private data under section 13.01. 
  5.36     Subd. 7.  [APPLICABILITY.] This section does not apply to a 
  6.1   contract, or work under a contract, under which:  
  6.2      (1) the estimated total cost of completing the project is 
  6.3   less than $2,500 $25,000 and only one trade or occupation is 
  6.4   required to complete it, or 
  6.5      (2) the estimated total cost of completing the project is 
  6.6   less than $25,000 $100,000 and more than one trade or occupation 
  6.7   is required to complete it. 
  6.8      Sec. 5.  Minnesota Statutes 1998, section 177.44, is 
  6.9   amended to read: 
  6.10     177.44 [HIGHWAY CONTRACTS; HOURS OF LABOR; WAGE RATES; 
  6.11  PENALTY.] 
  6.12     Subdivision 1.  [HOURS, WAGES PERMITTED.] A laborer or 
  6.13  mechanic An employee employed by a contractor, subcontractor, 
  6.14  agent, or other person doing or contracting to do all or part of 
  6.15  the work under a contract based on bids as provided in Minnesota 
  6.16  Statutes 1971, section 161.32, to which the state is a party, 
  6.17  for the construction or maintenance of a highway, may not be 
  6.18  permitted or required to work longer than the prevailing hours 
  6.19  of labor unless the laborer or mechanic is paid for all hours in 
  6.20  excess of the prevailing hours at a rate of at least 1-1/2 times 
  6.21  the hourly basic rate of pay of the laborer or mechanic.  The 
  6.22  laborer or mechanic must be paid at least the prevailing wage 
  6.23  rate in the same or most similar trade or occupation in the area.
  6.24     Subd. 2.  [APPLICABILITY.] This section does not apply 
  6.25  applies only to wage rates and hours of employment of laborers 
  6.26  or mechanics engaged in the processing employees employed in 
  6.27  connection with and on the site of the project.  All other 
  6.28  employees, including but not limited to, employees who process 
  6.29  or manufacture of materials or products, or to the delivery of 
  6.30  deliver materials or products by or for commercial 
  6.31  establishments which have a fixed place of business from which 
  6.32  they regularly supply the processed or manufactured materials or 
  6.33  products.  This section applies to laborers or mechanics who 
  6.34  deliver, regardless of whether the delivery does or does not 
  6.35  involve the delivery of mineral aggregate such as sand, gravel, 
  6.36  or stone which is incorporated into the work under the contract 
  7.1   by depositing the material substantially in place, directly or 
  7.2   through spreaders, from the transporting vehicle, are not 
  7.3   subject to this section.  
  7.4      Subd. 3.  [INVESTIGATIONS CONFIRMATIONS BY DEPARTMENT OF 
  7.5   LABOR AND INDUSTRY.] The department of labor and industry 
  7.6   shall conduct investigations and hold public hearings necessary 
  7.7   to define classes of laborers and mechanics and to determine the 
  7.8   hours of labor and wage rates prevailing in all areas of the 
  7.9   state for all classes of labor and mechanics commonly employed 
  7.10  in highway construction work, so as to determine prevailing 
  7.11  hours of labor, confirm prevailing wage rates, and hourly basic 
  7.12  rates of pay in the manner required by section 177.42, 
  7.13  subdivision 6.  
  7.14     The department shall determine the nature of the equipment 
  7.15  furnished by truck drivers who own and operate trucks on 
  7.16  contract work to determine minimum rates for the equipment, and 
  7.17  shall establish by rule minimum rates to be computed into the 
  7.18  prevailing wage rate.  
  7.19     Subd. 4.  [CERTIFICATION OF HOURS AND RATE.] The 
  7.20  commissioner of labor and industry shall at least once a year 
  7.21  certify the prevailing hours of labor, the prevailing wage rate, 
  7.22  and the hourly basic rate of pay for all classes of laborers and 
  7.23  mechanics referred to in subdivision 3 employees in each area in 
  7.24  the manner required by section 177.42, subdivision 6.  The 
  7.25  certification must also include future hours and rates when they 
  7.26  can be determined for classes of laborers and mechanics in an 
  7.27  area.  The certification must specifically state the effective 
  7.28  dates of future hours and rates when they are certified.  If a 
  7.29  construction project extends into more than one area there shall 
  7.30  be only one standard of hours of labor and the wage rates for 
  7.31  the entire project shall be the rate applicable to the area 
  7.32  containing the largest single part of the project.  A person 
  7.33  aggrieved by a final determination of the commissioner may 
  7.34  petition the commissioner for reconsideration of findings.  A 
  7.35  person aggrieved by a decision of the commissioner after 
  7.36  reconsideration may within 20 days after the decision petition 
  8.1   the commissioner for a public hearing as in a contested case 
  8.2   under sections 14.57 to 14.61.  If the commissioner finds that a 
  8.3   change in the certified prevailing hours of labor, prevailing 
  8.4   wage rate, and the hourly basic rate of pay for a class 
  8.5   of laborers or mechanics employees in any area is required, the 
  8.6   commissioner may at any time certify that change. 
  8.7      Subd. 5.  [HOURS AND RATES TO BE POSTED.] The 
  8.8   prevailing hours of labor, the prevailing wage rates, the hourly 
  8.9   basic rates of pay, and classifications for all labor as 
  8.10  certified by the commissioner must be specifically stated in the 
  8.11  bid specifications and invitations or requests for proposals and 
  8.12  contracts for each highway construction contract to which the 
  8.13  state is a party.  These hours, rates, and classifications, 
  8.14  together with the provisions of subdivision 6, must be kept 
  8.15  posted on the project by the employer in at least one 
  8.16  conspicuous place the project office or other appropriate place 
  8.17  for the information of employees working on the project.  
  8.18     Subd. 6.  [PENALTIES.] A contractor, subcontractor, or 
  8.19  agent who violates this section is guilty of a misdemeanor and 
  8.20  may be fined not more than $300 or imprisoned not more than 90 
  8.21  days or both.  Each day that the violation continues is a 
  8.22  separate offense.  
  8.23     Whoever induces a job applicant or employee on any project 
  8.24  subject to this section to give up or forego any part of the 
  8.25  wages to which entitled under the contract governing the project 
  8.26  by threat not to employ, by threat of dismissal from employment, 
  8.27  or by any other means may be fined not exceeding $1,000 or 
  8.28  imprisoned not more than one year or both.  
  8.29     Any employee under this section who knowingly permits the 
  8.30  contractor or subcontractor to pay less than the prevailing wage 
  8.31  rate set forth in the contract, or who gives up any part of the 
  8.32  compensation to which entitled under the contract, may be fined 
  8.33  not exceeding $40 or imprisoned not more than 30 days or both.  
  8.34  Each day any violation of this paragraph continues is a separate 
  8.35  offense.  
  8.36     Subd. 7.  [DEPARTMENT OF TRANSPORTATION TO ENFORCE.] The 
  9.1   department of transportation shall require adherence to this 
  9.2   section.  The commissioner of transportation may demand examine 
  9.3   and every contractor and subcontractor shall furnish copies of 
  9.4   payrolls.  The commissioner of transportation may examine make 
  9.5   available for such examinations all records relating to hours of 
  9.6   work and the wages paid laborers and mechanics employees on work 
  9.7   to which this section applies, provided that the records and any 
  9.8   information derived from the department's examination of them 
  9.9   shall be deemed to be private data under section 13.01.  Upon 
  9.10  request of the department of transportation or upon complaint of 
  9.11  alleged violation, the county attorney of the county in which 
  9.12  the work is located shall investigate and prosecute violations 
  9.13  in a court of competent jurisdiction. 
  9.14     Sec. 6.  Minnesota Statutes 1998, section 471.345, 
  9.15  subdivision 7, is amended to read: 
  9.16     Subd. 7.  [MINIMUM LABOR STANDARDS.] Nothing in this 
  9.17  section shall be construed to prohibit any municipality from 
  9.18  adopting rules, regulations, or ordinances which establish, for 
  9.19  a specific construction project, by resolution, the prevailing 
  9.20  wage rate and prevailing hours of labor, as defined in section 
  9.21  177.42, as a minimum standard for wages and which establish the 
  9.22  hours and working conditions prevailing for the largest number 
  9.23  of workers engaged in the same class of labor within the area as 
  9.24  a minimum standard for a municipal contractor's employees which 
  9.25  must be agreed to by any contractor before the contractor may be 
  9.26  awarded for work under any contract for the furnishing of any 
  9.27  labor, material, supplies, or service a project, as defined in 
  9.28  section 177.42, even though the project is locally funded.  If a 
  9.29  resolution is adopted for a project, all of the requirements of 
  9.30  section 177.42 apply to the project as to both the contractor 
  9.31  and the municipality.  A municipality may not adopt any 
  9.32  prevailing wage rate or hours requirement for projects or other 
  9.33  work except in compliance with this section. 
  9.34     Sec. 7.  [REPEALER.] 
  9.35     Minnesota Statutes 1998, section 177.435, is repealed.