Minnesota Prevailing Wage

Construction progress of the U.S. Bank Stadium (new Minnesota Vikings stadium), as seen from the Haaf Ramp in Downtown East, Minneapolis, Minnesota, on 3 December 2015.

The Minneapolis City Council significantly amended its Prevailing Wage Ordinance today.  The revised ordinance will go into effect following publication (generally 8 days after the approval of the revisions).  Accordingly, the revisions will likely be finalized before July 1, 2016. The revisions provide individuals with a private right of action for violations (they can sue

MinneapolisMinneapolis recently “reaffirmed” its commitment to the 2015 Minnesota Responsible Contractor Act, Minn. Stat. 16C.285, and enacted additional factors and implementation procedures when determining whether a contractor is “responsible” for purposes of being awarded public construction projects.  Are you a responsible contractor?  If you are a contractor doing business with the State of Minnesota

Minneapolis panoramaOn January 15, 2016, the Minneapolis City Council first introduced proposed revisions to the Minneapolis Prevailing Wage Ordinance.  The initial draft was revised on April 13, 2016, and on May 27, 2016, the City Council referred the proposed ordinance to the Ways and Means Committee.  So, what’s in store for Minnesota public works contractors? Not

Aerial_photo_of_downtown_Minneapolis

On May 27, 2016, the Minneapolis City Council unanimously approved the Minneapolis Sick and Safe Time Ordinance, Title 2, Chapter 40 – Workplace Regulations.  The final Ordinance mandates unpaid sick and safe leave for employers with 1 to 5 employees, and paid sick and safe leave for employers with 6 or more employees. Notably, the final amendment includes not only the use for sick and safe care, but also school snow days.

Below is a quick overview of what the ordinance requires, who it applies to, what burdens employers have, and the implications of a violation. However, time will only tell how this plays out in reality.

What Does the Minneapolis Sick and Safe Time Ordinance Require?

The Ordinance, effective July 1, 2017, requires employers to provide employees with paid/unpaid sick and safe time.  New employers (with 1 or more employees), will have 12 months to provide unpaid time off. After 12 months, new employers will be subject to the Ordinance in its totality (this 12 month delay will only be allowed for 5 years from the enactment).

Employees working in Minneapolis will accrue sick and safe time unpaid leave at the rate of 1 hour for every 30 worked, up to an annual cap of 48 hours (either calendar or fiscal year). Exempt (salaried) employees are deemed to work 40 hours each week unless their normal workweek is less than 40 hours.  Employees must be allowed to use sick and safe time after 90 calendar days of employment.  Employers must permit an employee to carry over at least 80 hours of accrued but unused sick and safe time into the following year.

Additionally, sick and safe leave time need not be paid this time out at termination. Employees must be able to use the leave in the same increment of time consistent with current payroll practices and existing employer policies (but no more than 4 hours).  They must be compensated at the same hourly rate with the same benefits (except they are not entitled to lost tips or commissions and compensation is only required for the hours the employee was scheduled to work).

Who Is An “Employer” and “Employee” Under the Ordinance?

Does this Ordinance affect your business based in Eden Prairie or Alexandria?  It depends on whether you are a covered employer, defined below.  The Ordinance defines several terms with specificity, but here it is in a nutshell:
Continue Reading Minneapolis Sick and Safe Time Ordinance Approved – Snow Days Covered

CementA few weeks ago I got to toot our horn about the J.D. Donovan case, whereby the Minnesota Supreme Court held that transportation of supplies to non-work sites is not “work under the contract” pursuant to Minn. R. 5200.1106, and thus not subject to the Minnesota Prevailing Wage Act (MnPWA), Minn. Stat. 177.41-.44.  Unfortunately, it took the Minnesota Supreme Court to determine whether the MnPWA applied to a Minnesota Department of Transportation project – overruling the Minnesota Court of Appeals.  If those learned judges were unable to determine properly whether work was covered, what about the rest of us?!  Unfortunately, the MnPWA and related rules are not as clear as they could be, leading up to cases such as J.D. Donovan v. Minnesota Department of Transportation.

Generally, the prevailing wage is the hourly rate plus fringe benefits, required by law to be paid for each trade or occupation while performing work on qualifying federal, state, or local municipality-funded construction projects.  The federal Davis-Bacon Act (DBA) and each state (often called “Little Davis-Bacon Acts”) may (and often do) define “prevailing wage” and “covered work” differently.  Thus, even if you are not a Minnesota contractor – if you are doing work in Minnesota, you should take care to understand the MnPWA and how it differs from either the DBA or your usual state prevailing wage statue.

What is the Minnesota Prevailing Wage?

Under the MnPWA, the prevailing wage is the hourly basic rate of pay plus the employer’s contribution/cost for fringe benefits (medical or hospital care, pensions on retirement or death, life insurance, disability and sickness insurance, or accident insurance, for vacation and holiday pay, for defraying the costs of apprenticeship or other similar programs, or for other bona fide fringe benefits—but only where the contractor or subcontractor is not required by other federal, state, or local law to provide any of those benefits).  Whether something is a “fringe benefit” is another big issue – one for another post.  The prevailing wage rates for a project should be listed on the determination included with the bidding documents.  What if the bidding documents are missing the rates, or you want to verify?  The current commercial wage rates can be found here. The highway/heavy prevailing wage rates may be found here. Unlike some other state prevailing wage acts, Minnesota’s prevailing wage rates do not change throughout the project (with some extremely limited exceptions such as a correction).

When Does the MnPWA Apply to a Project?

The MnPWA applies to “laborers, workers and mechanics” that erect, construct, remodel, or repair public buildings or other public works, financed in whole or part by state funds.  
Continue Reading When Does the Minnesota Prevailing Wage Act Apply to a Project?

Asphault truckI love it when I get to toot our own horn (pun intended)!  In a huge victory for hauling companies (represented by Seaton, Peters & Revnew), the Minnesota Supreme Court reversed the Minnesota Court of Appeals on April 20, 2016, and held in J.D. Donovan, Inc. v. Minnesota Department of Transportation, that the transport

Construction workerQuick fun fact of the day – I recently learned that the Minnesota Department of Transportation’s OCIC – Labor Compliance Unit has resources to assist it to find compliance violations (employee misclassifications).  Apparently, MNDOT’s CRL (Civil Rights and Labor) payroll system flags key words from inspector’s field notes and searches for the proper classification in

logo-markOn Wednesday, April 27, 2016, Seaton, Peters & Revnew will be hosting its 11th Annual Upper Midwest Labor Law Forum from 8:15 a.m. – 4:30 p.m at the Doubletree – Bloomington – Minneapolis South (yes, same place the DOL’s prevailing wage seminar is taking place in May).  We anticipate another great turnout and hope you can make it!  It has been approved for Minnesota and Iowa CLE credits as well as HRCI credits.  The agenda is below…notably, yours truly will be presenting the Hot Topics in Employment Law session (and do my best to keep everyone awake after lunch).

If you are interested in attending you can find more information and how to sign up here.

PROGRAM AGENDA:

Continue Reading Join Me at the Upper Midwest Labor Law Forum – April 27, 2016

2016_complete_pw_surveyOn April 5, 2015, the 2016 prevailing wage surveys were mailed by the Minnesota Department of Labor and Industry (MNDOLI), seeking data for the wages paid to construction workers between April 4, 2015 and June 3, 2016 for all 87 Minnesota counties, public or private construction, highway or heavy construction, commercial and residential.  Surveys are

The Minnesota Prevailing Wage Act, Minn. Stat. 177.41 – 177.44, requires that employees working on public works be paid the “real value of the services they perform.”  Accordingly, Minnesota requires that “laborers, workers, and mechanics on projects financed in whole or part by state funds should be comparable to wages paid for similar work in