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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  Robb Kahl

Anyone who has travelled in the Milwaukee area over the last 5 years is aware of the Zoo Interchange project. The Zoo Interchange is the busiest interchange in the state with an estimated 350,000 vehicles per day.
The complete reconstruction of the Zoo Interchange was necessary due to the age of the roadways as well as unsafe conditions of many of the bridges. WisDOT broke the Zoo Interchange Project into three parts--Core, South Leg and North Leg. The Core is scheduled to be completed this year. The North Leg, however, has been delayed due to a lack of funding in the 2017-2019 biennium budget.
The North Leg is everything on US 45 between Swan Boulevard and Burleigh Street. As part of the project, the aging US 45 will be reconstructed with an additional lane in each direction and five bridges over 50 years old will be replaced.
WisPolitics recently reported that the price of the North Leg is expected to increase by 16% due to the delay. According to WisDOT, the $32.4 million increase comprises a $21.6 million contingency fund, $7.7 million in inflation and $3.1 million in increased design costs.
Cost escalation resulting from the delay, however, is only one element. WisDOT must maintain the North Leg until the reconstruction occurs. WisDOT has proposed spending $10 million on the North Leg to remove and replace the top inch or so of asphalt and change the pavement markings from 3 lanes to 4 narrower lanes with smaller shoulders. These short term repairs are expected to last, at best, a few years before the surface pavement starts to crack and fail.
The best way to stop the runaway cost increases is to fully fund the North Leg as soon as possible. For more on the North Leg, visit the Transportation Development Association of Wisconsin's website.

Industry News and Updates
From the News Stand
Fuel Tax Loses 21% of Purchasing Power Since 2006

According to the 2018-19 Transportation Budget Trends document recently released by WisDOT, Wisconsin's fuel tax has lost 21% of its purchasing power since the last indexing adjustment in 2006.  Fuel tax revenues represent the largest state funding source for transportation.  Just as most businesses would not be sustainable if their largest revenue source lost more than one-fifth of purchasing power to inflation, Wisconsin cannot have a sustainable transportation program under the current revenue model.

Wisconsin Supreme Court Issues Important Decision in UI Benefit Eligibility Case

In 2013, state lawmakers substantially tightened employee eligibility for unemployment insurance (UI) benefits by revising Wisconsin's UI benefit misconduct law.
By way of background, a terminated employee is ineligible for UI benefits for a specified period and until certain conditions are met if the employee was terminated for misconduct. The previous misconduct standard was based on a 1941 Wisconsin Supreme Court case. Over time, this standard had been broadly interpreted such that only the most egregious examples of employee misconduct resulted in a discharged employee being denied UI benefits.

Governor's Steering Committee on Autonomous and Connected Vehicle Testing and Deployment Issues Final Recommendations

Last summer, Governor Walker created a Steering Committee on Autonomous and Connected Vehicle Testing and Deployment to advise him on "how best to advance the testing and operation of automated and connected vehicles in the State of Wisconsin."
This ad hoc committee was led by David Ross, Secretary of the Wisconsin Department of Transportation, and comprised of state legislators, industry representatives, business leaders, law enforcement officials and academic researchers. The steering committee met monthly between the fall of 2017 and summer of 2018 to gather input and information from industry groups, vehicle manufacturers, technology firms, state agencies, research groups and Wisconsin businesses.

The steering committee issued its final report and made the following recommendations to the Governor: 

State Lawmakers Approve Spending Plan for Additional Federal Transportation Aid  

Like most states, Wisconsin relies upon financial assistance from the federal government to help fund the construction, repair and maintenance of its transportation infrastructure network.
The 2017-2019 state budget authorized the Wisconsin Department of Transportation to spend $6.07 billion on transportation infrastructure needs. Of that amount, $1.58 billion comes in the form of federal aid. The breakdown of the federal aid is as follows:
State Highway Rehabilitation                                $847.1 million
Interstate\State Highway Development                 $458.4 million
State and Local Management & Operations         $181.2 million
Local Bridge Improvement                                    $48.8 million
Congestion Mitigation                                            $21.4 million
Transportation Alternatives                                   $14.1 million
Railroad Crossing Improvement                            $6.6 million
Last month, the federal Department of Transportation announced that Wisconsin will receive an additional $67.4 million in federal aid. The legislature's Joint Finance Committee approved the following allocation plan for these funds: 
  • $38.6 million to fund an additional 70 local bridge projects statewide for the 2018-2022 Local Bridge Improvement Program cycle;
  • $22 million for the I-94 North-South reconstruction and expansion project in Racine County; and 
  • $6.8 million for ongoing State Highway Rehabilitation projects.

Worker's Compensation Insurance Rates Going Down  

Recently, the Wisconsin Commissioner of Insurance approved an overall 6.03% rate decrease for Worker's Compensation insurance premiums for businesses, effective October 1, 2018. This reduction in premiums is expected to result in an annual savings of about $134 million for Wisconsin employers.
The following chart details the rate reductions by industry group:
Industry Group                                        Rate Level Change
Manufacturing                                                -6.22%
Contracting                                                    -7.63%
Office & Clerical                                             -4.90%
Goods & Services                                          -5.65%
Miscellaneous                                                -5.65%
Overall                                                           -6.03%
By way of background Worker's Compensation rates are adjusted annually by a committee of actuaries from the Wisconsin Compensation Rating Bureau (WCRB). The committee studies the prior losses (claims) of hundreds of categories and professions and submits a rate recommendation to the Office of the Commissioner of Insurance, which has final approval over the rates.
The WCRB attributes this rate reduction to the ongoing commitment by Wisconsin employers to workplace safety. Fewer workplace injuries also explain why rates went down by 8.46% in 2017 and 3.19% in 2016.

FEMA Assessing Storm Damage in Northwest Wisconsin  
Federal Emergency Management Agency (FEMA) officials are conducting preliminary damage assessments in seven northwestern Wisconsin counties after torrential rains in mid-June caused significant damage to private property and public infrastructure.
FEMA officials will look at damage to public infrastructure in Ashland, Bayfield, Burnett, Clark, Douglas, Iron and Pepin counties. Local officials have estimated $11.1 million in debris clearance, emergency protective measures and damage to roads, bridges and other infrastructure.
County damage assessments to homes and businesses in those counties showed one home destroyed, two homes sustained major damage, and 60 with minor damage. There were six business with major damage and ten with minor damage. 
While many families and businesses were impacted by the flooding, the local damage assessments confirmed that the State of Wisconsin does not qualify for federal aid for individuals.  State agencies and non-profit agencies are working to help those families with unmet needs.
The damage assessments are used to determine whether federal disaster aid will be available to fund at least a portion of the costs associated with the repair and/or replacement of the damaged infrastructure. 

State attorneys general can play key roles in protecting workers' rights  

Report * By Terri Gerstein and Marni von Wilpert * May 7, 2018
State attorneys general can be key allies in protecting workers' rights. While there are variations in the structure, resources, and jurisdiction of state attorney general offices, these offices often have a range of powers that can enable them to play a key role in advancing and defending workplace protections by ensuring that employers comply with the law. This report describes some of the ways state attorneys general have been involved in protecting workers' rights.

Introduction: Broader state enforcement is needed to enforce workers' rights laws
Working people in America are being shortchanged: They are working harder, but inequality is rising and wages for all but the highest-paid workers are failing to keep up with economywide productivity growth (Gould 2018). Even worse, many workers are not being paid what they are owed by their employers. The failure to enforce workers' rights laws has resulted in billions of dollars in wages being stolen from workers' paychecks (Levine 2018; McNicholas, Mokhiber, and Chaikof 2017). For example, in the 10 most populous states in the country, each year 2.4 million workers covered by state or federal minimum wage laws report being paid less than the applicable minimum wage in their state-approximately 17 percent of the eligible low-wage workforce.

Gov. Hickenlooper Signs Executive Order to Improve Payroll and Worker Classification in CO Construction Industry  

Office of the Governor
June 5, 2018
DENVER - Wednesday, June 6, 2018 - Gov. John Hickenlooper has signed an executive order creating a joint task force including employer and employee groups to better address payroll and worker misclassification in Colorado's construction industry.
Misclassification of employees as independent contractors and other labor law violations  disadvantage both law-abiding construction contractors and construction workers in Colorado. Some labor brokers within Colorado's construction industry have been found to have purposefully misclassified workers to avoid paying unemployment premiums and payroll taxes.
"Law-abiding companies and workers are being undercut by those who skirt the law in Colorado," said Governor John Hickenlooper. "This task force will bring all parties together to find the right solutions to root out any illegal labor activity in our state."

Seventh Circuit Revisits Contractor Misclassification  

Thursday, June 28, 2018
Hannesson Murphy
Courts in the U.S. have been grappling with the misclassification of independent contractors for more than 20 years. As our readers well know, there is no standardized test to determine whether a worker is a contractor. Various courts and government agencies all have adopted their own criteria. Fortunately, most of them overlap, but there can be critical differences in the factors and how they are applied.
In 2015, the Wage and Hour Division of the U.S. Department of Labor (DOL) firmly supported the "economic realities" test as part of a government sponsored misclassification initiative.  While not breaking new ground by adopting the test, the DOL's pronouncement did create somewhat of a splash at the time because it deliberately downplayed the relative importance of control over a worker - which previously had been viewed as the most important aspect of the contracting relationship. See Administrator's Interpretation No. 2015-1 (July 15, 2015).  In the years since its issuance, the DOL's advisory opinion largely has been sidestepped by several tribunals charged with examining the issue in favor of their own well-worn standards.

Prosecutors Treating 'Wage Theft' as a Crime in These States  

June 26, 2018
By Chris Opfer
When a business doesn't pay workers minimum wages or overtime, it usually risks a government investigation or private lawsuit. In some states, companies and their officers may also be looking at criminal charges that could land them behind bars.
"We prosecute companies that have institutionalized theft as a business model," Manhattan Assistant District Attorney Diana Florence said.
Prosecutors in New York and California are starting to view wage violations as an actual crime more often, as opposed to a matter for civil courts. Their approach could be a model for other states looking to beef up enforcement in an era when the federal wage-and-hour watchdog is shifting its emphasis to voluntary compliance.

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