Skilled Construction Trades and Respected Contractors
Building Wisconsin Together ®
Welcome to Construction Business Group's Industry Updates. This monthly e-newsletter will help us communicate the important initiatives that we have underway and relevant updates on issues that impact Wisconsin's construction industry.
Message from Executive Director
Last month, the Reason Foundation released the 23rd Annual Highway Report on the Performance of State Highway Systems. The Reason Foundation is considered by many to be a Koch-backed, partisan entity. Nonetheless, its Annual Highway Report allows for year over year comparisons, and doing so reveals that the condition of Wisconsin's roads are in a death spiral.
In the 21st Annual Report, released in 2014 (using 2012 data), Wisconsin was ranked 15th in Overall Highway Performance. In the 22nd Annual Report released in 2016 (using 2013 data), Wisconsin's Overall Highway Performance ranking fell to 28th. In the most recent Annual Report (using 2015 data), Wisconsin's Overall Highway Performance ranking fell to 38th. The 2018 Annual Report identified Wisconsin as having the largest drop in the entire country.
The drop in overall ranking, however, is not the most alarming data in the report. The percentage of rural interstate miles, rural primary miles and urban interstate miles that are in "poor condition" have increased dramatically in the last 4 years, which means that Wisconsin's rankings in those categories have dropped:
In the most recent report, Wisconsin received specific (negative) mention as being among a handful of states that are collectively responsible for half of the nationwide total rural interstate and primary miles in poor condition. Rural communities are vital to Wisconsin's economic health. If the tourism, agriculture and other industries located throughout rural Wisconsin cannot move goods and people, all of Wisconsin suffers.
What has happened to cause such a precipitous decline in road condition? Nearly everyone in the industry would say that the answer is obvious: a lack of funding. Without proper funding to maintain, repair, recondition and reconstruct roads, the percentage of Wisconsin's roads that are in "poor condition" will only increase. And, the longer we ignore the problem, the more expensive it will be to fix in the future. A road that could be repaired today but gets ignored for another several budget cycles may have to be fully reconstructed at a significantly higher cost in the future.
Building Wisconsin Together
Meeting the Need: April 18th Externship for Educators and Students
A 2017 Construction Hiring and Business Outlook stated that 73 percent of contractors report having a hard time finding qualified workers and 76 percent predict that labor conditions will remain tight, or get worse, during the next twelve months. There are many reasons that the industry is facing a workforce shortage-a growing economy, declining population numbers, retiring baby boomers and immigration rules-but the reality is that we must change the perception of our image in order to recruit the next generation of skilled construction professionals.
According to a 2016 study, only 3 percent of young adults (ages 18-25) are interested in a construction career because they want a less physically demanding job and believe that construction work is difficult. More than 40 percent of those 'undecided' on a career would not consider construction, regardless of the compensation.
If good pay, obtaining useful skills and unlimited opportunity is not appealing, how does a trade industry like construction compete for the best and the brightest? Generation Z, those born after 1996, are who the industry should connect with today. The task is to shift the perception of construction careers to attract this generation as they are beginning to enter the workforce.
Our solution is to open the doors of the training center to share the great opportunity that apprenticeship offers. The next externship for educators and high school students is scheduled for April 18th at the Coloma Training Center. We are expecting 300 students will join us for the day. This full day event is the perfect opportunity to learn about the career path of an Operating Engineer, tour the training center and learn about the pre-apprenticeship and Registered Apprenticeship process.Please share the attached flyer with educators in your community.
Industry News and Updates
Fourth Annual Construction Workers' Memorial Service
April 26, 2018
St. Patrick's Church, 404 E. Main St., Madison, WI
Workers' Memorial Day is an international day of remembrance of workers killed by incidents at work or diseases caused by work. A special 4th Annual Construction Workers' Memorial Service hosted by the Wisconsin State Building Trades and Construction Business Group will be held to honor those individuals who lost their lives in construction accidents in Wisconsin.
This Service will serve as a sign of comradery among construction workers in our great state. Your presence would be greatly appreciated as we pay tribute to these honorable men and women. Before the service, we invite construction workers, family members and friends to participate in a Hard Hat Processional from the Monona Terrace to the Church. Line-up will be at 3:00 p.m.
From the News Stand
Report: Worker-misclassification fight nets $1.4M
By: Erika Strebel
March 16, 2018 1:25 pm
In 2017 alone, Wisconsin's work to crack down on employers who misclassify workers as independent contractors instead of direct employees has netted nearly $1.4 million.
Because of seasonal layoffs that can muddy the distinction between permanent employees and someone hired for a specific job, worker misclassification is believed to be rampant in the construction industry.
Industry officials have said deliberate misclassification not only deprives the state of taxes and other resources but also gives dishonest companies an unfair advantage by letting them avoid costs that their more honest rivals roll into bid prices.
Important Contractor Information Related to Wisconn Valley Construction
Exciting news was announced recently as Foxconn selected M+W | Gilbane as the construction project management team for the Foxconn campus in Mount Pleasant. In conjunction with this news, Governor Walker also announced the process for Wisconsin companies to bid on work related to Foxconn construction, which can be read here. Work on the project is expected to begin in 60 days and will include site work, material procurement, and temporary logistics preparation. Following is new information about upcoming construction-related information sessions (see Step 2 below) and a step-by-step process for construction entities to follow if they are interested in working on the project.
To ensure a fair and open process, companies seeking to bid on work related to the construction phase will be required to complete the following steps to be considered for such opportunities:
Step 1: Register on the Website - REQUIRED
Contractors seeking opportunities to participate in this project must register with M+W|Gilbane to receive automatic bid alerts and notifications on upcoming pre-bid and matchmaking sessions. A link to the registration website can be found on the Wisconn Valley Science & Technology Park page.
Step 2: Attend Informational Session - OPTIONAL
Valuable information will be shared at the information sessions for construction contractors held throughout the state. Attendees will receive information regarding the process for submitting bid proposals, standard terms and conditions related to the project, basic construction information, and a preliminary construction schedule will be discussed. Details on the first 6 information session are below, when additional information becomes available on the remaining sessions it will be posted here.
Tuesday, April 3: Fountain Hall, 8505 Durand Avenue, Sturtevant. Co-hosted by the Racine County Economic Development Corporation.
Wednesday, April 4: University of Wisconsin-Platteville - Harry & Laura Nohr Gallery, 1 University Plaza.Co-hosted by Prosperity Southwest
Friday, April 6: Liberty Hall Banquet and Conference Center, 800 Eisenhower Drive, Kimberly. Co-hosted by The New North.
Friday, April 13: Superior Government Center, 1316 N. 14th St., Superior. Co-hosted by Visions Northwest.
Monday, April 16: Chippewa Valley Technical College - Energy Education Center, 4000 Campus Road, Eau Claire. Co-hoted by Momentum West.
Tuesday, April 17: La Crosse Area Foundation, 401 Main St. Registration. Co-sponsored by 7 Rivers Alliance.
Step 3: Sign-up for Regular Project Updates - OPTIONAL
Information regarding project status, road updates, next steps, interesting facts, recent announcements and special bulletins will be distributed through Wisconn Valley News. Sign up at wisconnvalley.wi.gov/newsletter to stay informed.
Attend a pre-bid and matchmaking session that will outline a clear and detailed process with good fair efforts to place "Wisconsin First" while building significant capacity in both workforce and businesses. Companies that register with M+W|Gilbane will receive notifications on upcoming pre-bid and matchmaking sessions.
Step 5: Follow the process
In order to ensure a fair and open process, everyone is asked to follow the process noted here. Please do not contact the construction project management team directly. All contact should be done electronically through the process outlined.
PSC Considers Utility Rate Impact of New Federal Tax Law
Wisconsin's Investor-Owned Electric Utilities (IOUs) are organized as Chapter C corporations. Beginning in tax year 2018, Wisconsin's IOUs will see a reduction in their federal corporate income tax liability due to the reduction in the top federal corporate income tax rate.
Under the state's utility laws, taxes paid by Wisconsin IOUs are included as expense when the Wisconsin Public Service Commission (PSC) sets electric utility rates for residential, commercial and industrial customers.
On January 10, the PSC directed Wisconsin IOUs to provide information on how they propose to implement the changes resulting from the new federal tax law for the benefit of customers as soon as possible; and an estimate of the customer savings. The deadline for submitting this information to the PSC was February 9.
In total, Wisconsin IOUs estimate the initial annual customer savings resulting from the new federal tax law to be approximately $275 million. Later this year, the PSC will decide how these savings will be applied to residential, commercial and industrial electric utility customers.
The Effect of Prevailing Wage Repeals on Construction Income and Benefits
Journal of Public Works Management and Policy
Ari Fenn, Zhi Li, Gabriel Pleites, Chimedlkham Zorigtbaatar and Peter Philips - Univeristy of Utah
While considerable research has examined the effects of prevailing wage law repeals on construction wages, little has been done on the repeals effect on benefits. Based on state-level data from the quinquennial Economic Census for construction from 1972 to 2012, we find that depending on sample and model specification, statewide annual average construction blue-collar income fell by 1.9% to 4.2%. Statewide annual average legally required benefits (social security, workers injury-compensation insurance, and unemployment insurance contributions) for blue- and white-collar construction employees combined fell from 3.8% to 10.1%. Statewide annual average voluntary benefits (primarily health insurance, pension contributions, and apprenticeship training) for blue- and white-collar construction employees combined fell from 11.2% to 16.0%. Because prevailing wage laws govern only blue-collar construction remuneration, blue-collar benefits probably fell more than blue- and white-collar benefits taken together.
US Department of Labor Wage and Hour Division Prevailing Wage Seminars
The Wage and Hour Division (WHD) Prevailing Wage Seminars are three-day compliance trainings designed for regional stakeholders (private contractors, state agencies, unions, federal agencies and workers).
The first two days of the seminar will consist of either courses on the Davis-Bacon Act or the Service Contract Act. The third day will feature courses concerning the Executive Orders and subject matter related to both the Davis-Bacon Act and the Service Contract Act as well as presentations from other agencies such as OSHA, Office of Federal Contract Compliance Programs (OFCCP), Housing and Urban Development (HUD), National Labor Relations Board (NLRB)
We have selected the following locations for our 2018 seminars:
Venues will be announced at a later date. If you would like to receive email updates about our seminars, please sign up for our mailing list here. (In the category "Wage and Hour" select "WHD - Prevailing Wage Seminar Announcements")
A warning for Missouri: Repealing the prevailing wage on construction jobs hurts workers and the economy
BY MARC POULOS
Special to The Star
February 20, 2018 08:30 PM
Out of all the dubious and downright absurd ideas that some state politicians have been trying to sell taxpayers in recent years, one stands out above the rest: the suggestion that the cost of building schools, highways and other critical infrastructure could be trimmed by 20 percent by eliminating the local minimum wage - or prevailing wage - on government-funded construction projects.
Setting aside the political lunacy of essentially advocating middle-class wage cuts during an era of stagnation and rising inequality, what makes this canard especially ridiculous is that construction labor represents only a little over 20 percent of the total cost of building these projects - and it's declining.
Study finds Indiana common construction wage repeal reduced worker pay, didn't save money on public works projects
By Dan Carden
Jan 29, 2018
INDIANAPOLIS - When Gov. Mike Pence signed the 2015 repeal of Indiana's common construction wage statute, the Republican proclaimed that eliminating county minimum pay rates for public works projects would save the state and local governments money without reducing the paychecks of Hoosier workers.
"Wages on public projects should be set by the marketplace and not by government bureaucracy," Pence said at the time.
"By repealing the common construction wage, our state is putting hardworking taxpayers first, lessening the burden on cash-strapped local governments and schools, and opening doors of opportunity for small businesses across our state."
Guest Commentary: We Need To Talk About Wage Theft
By Melissa Wells
Wage theft occurs when a worker performs a job for an agreed-upon wage, and after completing the job, does not receive the full wage they are entitled to. The Center for Popular Democracy estimates that 580,000 Maryland workers suffer from wage theft each year, for a total of $875 million in gross wages lost annually. These numbers may underestimate the scope of wage theft in Maryland, as our Department of Labor, Licensing and Regulation has found that "employees often do not file a claim for a wage payment and collection law violation because they fear retaliation," leaving us with an incomplete picture of wage theft's prevalence. Low-wage workers are the most vulnerable to wage theft, particularly in industries like construction, food service and landscaping.
Workers are right to fear retaliation from their employers because Maryland law does not protect them from "discharge, demotion, discipline, or any other action that would reasonably deter an employee from engaging in protected activity under the state's wage payment and protection law." This means that though Maryland workers have a right to bring wage theft claims, they do not have a right against repercussions from their employer for bringing the claims.
AG investigation convicts Queens construction companies of ripping off employees
By Mark Hallum
FEBRUARY 20, 2018
State Attorney General Eric Schneiderman announced the conviction of three Queens construction companies after they pleaded guilty to misclassifying employees as independent contractors to avoid paying overtime.
Lotus-C Corporation of Jackson Heights, Johnco Contracting Inc. of Bayside, and RCM Painting Inc. of Maspeth were all convicted of felony counts of grand larceny and falsifying business records in Queens Supreme Court on Feb. 7 and will pay over $730,000 in restitution for missed wages and unpaid taxes.
"Led by pure greed, the defendants in this case attempted to sidestep the law - misclassifying their employees as a way to stiff them on the overtime pay they rightfully earned," Schneiderman said. "My office will continue to crack down on those who seek to steal from their workers in order to line their own pockets."