A pair of companion bills that would change how prevailing wage is calculated for public construction projects are under consideration during the 2021 Oregon legislative session.

Senate Bill 493 and House Bill 2419 would largely do away with regional surveys that currently are used to set prevailing wage and would instead mandate that collective bargaining agreements for each of the craft trades involved be used to determine prevailing wage across the state. Where more than one collective bargaining agreement exists in the state, an average of the wages set by those agreements would then determine the prevailing wage. The current wage surveys would be used only where no collective bargaining agreement exists for a given trade or occupation.

Public hearings have been held by both the House and Senate committees on business and labor, with the Senate committee voting 3-1 on March 9 to pass SB 493 to the Senate floor for consideration. HB 2419, meanwhile, was debated by the House committee on Feb. 10, but no further action has been taken.

Supporters of the bills include organized labor and trade associations. Officials are optimistic that SB 493, in particular, may have a fighting chance at passage.

“It is a positive sign,” Professional Business Development Group (PBDG) Executive Director Kenechi Onyeagusi said following the Senate committee’s vote. “I can tell you that I have conversations like this all the time where people will not bid on work if it’s not prevailing wage. It’s very important to us that prevailing wage is the standard, because what it does is allow smaller firms that might otherwise not be competitive to attract workforce.”

The PBDG is a trade association that represents minority-owned, woman-owned and COBID (Certification Office for Business Inclusion and Diversity) certified contractors. These are precisely the types of firms that would benefit most from the proposed bill, Onyeagusi said. Such firms would then be able to recruit and retain skilled and experienced craftspeople, who in turn would help make those firms more competitive in the marketplace.

“When you’re starting off a one-man firm, or with a couple of employees and you’re needing to attract workforce, having a job that pays prevailing wage, it’s a cost that the owner is ultimately agreeing to pay,” she said. “That small firm is able to attract the same caliber of workers as a much larger firm. It levels the playing field in a way that not a lot of things do.”

Matt Swanson, political director for the Pacific Northwest Regional Council of Carpenters, agreed. The legislation would aid contractors in rural communities across the state, he said.

“We feel really good about the prospects,” he said. “We’ve had a number of good conversations about making the rates less cumbersome and setting the prevailing wage rate in a way that’s more predictable.”

A similar policy is already law in Washington, Swanson said, adding that fears of it significantly increasing public project costs appear to have been overblown.

“It’s been an ongoing issue in Oregon for some time,” he said. “We saw it pass in the state of Washington, and it really offers more stability in the wage rates. That’s good for public works and public employees.”

Opponents of the two bills include the Oregon School Boards Association, the League of Oregon Cities and other organizations that represent public agencies. They say the bills could significantly raise labor costs.

“We are highly concerned that relying upon one collective bargaining agreement, which could reflect specialized work or unique project-based needs, could result in significant wage spikes and contribute to a lack of certainty for cities when planning and budgeting for public infrastructure investments, school capital construction projects and some affordable housing projects,” Tracy Rutten Rainey, a lobbyist for the League of Oregon Cities, testified during the House committee hearing.

Washington’s policy has increased costs of public projects such as affordable housing, and generated litigation, Rainey and others say.

“If this bill passes and becomes effective, we expect wages to increase,” Lori Sattenspiel, director of legislative services for the Oregon School Boards Association, said during the House committee hearing. “These eight districts going out for a bond now may find themselves short of funds to complete projects.”

Robert Camarillo, executive secretary of the Oregon State Building and Construction Trades Council, said this stance could be the result of a lack of understanding of how prevailing wage works.

“I think a lot of them, from what I hear, they don’t understand the concept of prevailing wage,” Camarillo said. “The goal is never to increase the cost of projects. We’re all taxpayers, and we want to see our tax dollars spent responsibly.”

Instead, Camarillo said, it is more likely that a higher prevailing wage will allow contractors to attract workers with a higher skill level, leading to a need for a smaller labor pool.

The current annual wage surveys fail to accurately measure wages across all trades, he added, because they do not capture the entirety of the projects being queried.

“Our concern is when the survey is done, we don’t know what phase of the project that survey will capture,” he said. “If we had all the crafts on the job all the time it might be a better snapshot. But to come in only those four weeks, we can’t get an accurate snapshot of the work being done that week.”

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The Oregon Bureau of Labor and Industries will host three free seminars next month in Portland and Salem to help construction companies navigate the state agency’s occupational wage survey.

BOLI annually surveys thousands of construction contractors to determine the prevailing wage rates for public projects. But the mandatory surveys, which ask about project locations, occupations of workers, hours worked and the benefits paid to each employee, can be confusing to fill out, BOLI spokesman Charlie Burr said. The upcoming seminars aim to help demystify the process, he said.

“We want to have accurate data from contractors so we can assess prevailing wage rates,” Burr said. “We also recognize (the surveys) can be difficult for subcontractors and contractors.”

The seminars will include information on each contractor’s responsibilities after receiving a survey; recent changes to the survey; how to report hours, wages and benefits; and how the survey results will help BOLI officials set prevailing wage rates. Another goal of holding the seminars is to help contractors understand what information they do not need to include, ultimately saving time while filling out the survey, Burr said.

The two Portland seminars will be held on Aug. 10 at the Portland State Office Building, 800 N.E. Oregon St. The first seminar will take place from 10 a.m. to noon and the second from 2 to 4 p.m.

A third seminar is scheduled to take place on Aug. 17 from 10 a.m. to noon in Salem at the Oregon Employment Department, 875 Union Street NE.

Seminar registration forms are available .  Completed forms should be emailed to Rachelle Herbert at rachelle.herbert@state.or.us

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The two main construction trade associations in Oregon don’t always agree on industry issues. But there’s at least one topic that has them on the same side of the table: their expectations about what to expect from lawmakers during the upcoming session of the Oregon Legislature.

While Democrats and Republicans in Salem are expected, to a large degree, to be in agreement on the issues that will need to be tackled once the session begins on Monday, the leaders of local chapters of Associated General Contractors and Associated Builders and Contractors say they expect there to be wide differences of opinion when it comes to the best fixes for problems such as funding education and transportation projects.

“There’s no consensus of what we need to be doing,” said Mike Salsgiver, executive director of AGC‘s Oregon-Columbia chapter. “The read on what the problems are is pretty clear. They’re just not agreed on what we need to do to fix them.”

The result, according to John Rakowitz, director of public and strategic affairs for AGC’s Oregon-Columbia chapter, is a session that’s going to keep the construction trade groups’ lobbyists on their toes.

“I see it as a session of great potential downsides and great potential risks,” he said.

While AGC and ABC are holding close their specific strategies for the upcoming session, both groups say their lists of priorities for the session reflect the needs and interests of their members.

At the top of AGC’s list is providing support for Gov. John Kitzhaber‘s education budget, specifically a portion that addresses career tech education. Under the proposed weighted formula, schools that establish career tech programs that meet certain criteria – including offering students at least three credits in the program and providing certificates recognized by industries such as construction – would receive money to help sustain the programs, Salsgiver said.

Kitzhaber’s education budget already has received pushback from the teacher’s union, according to Rakowitz.

“This (plan) is not without controversy,” he said. “This is a budget that says the state is now going to incentivize (schools) if you do certain things, like offer career tech ed.”

The ongoing search for funding to create a more stable pot of money for transportation-related new construction and maintenance also is something AGC is paying close attention to during the session, Salsgiver said.

Players in Salem already are butting heads over transportation funding. Earlier this week, Senate President Peter Courtney, D-Salem, told reporters gathered for a media day at the Capitol that he doubted the session would result in a package to pay for new transportation projects and maintenance of existing infrastructure such as roads.

Meanwhile, House Speaker Tina Kotek, D-Portland, has said she believes getting a transportation funding bill passed this session is a priority.

A funding package for transportation is less of a session concern for ABC, which has few members who work in that specific sector, said Laurie Kendall, executive director of the organization’s Pacific Northwest chapter.

Instead, the organization – which promotes an open, or merit-shop, approach to business – and its lobbyist Shawn Miller will keep a close watch on several bills related to apprenticeships.

ABC also is focusing its efforts in Salem on Senate Bill 137 and House Bill 2540, which address the expansion of prevailing wage on private projects that receive a portion of funding for a city, county or state government agency.

Kendall’s and Salsgiver’s organizations will realign when it comes to the topic of public contracting and a handful of issues that could affect businesses in general, including the possibility of legislators pushing a bill on statewide paid sick leave.

“We’re watching everything,” Kendall said. “We’re readying our members. … Their voices are the most important part. If (legislators) can hear (a message) from a contractor (or) a business owner, that has 10 times more impact.”

Even before the official first day of the session, Kendall’s group has been passing advice on to its members, getting them ready to spring into action at a moment’s notice to contact their district legislators – with emails, phone calls and letters – to make their voices heard. The trade group also is planning a Legislature day, when ABC members will have an opportunity to travel to Salem to meet with legislators.

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A bill that would require contractors to pay prevailing wage for construction projects at public colleges and universities was approved by the Oregon Senate, with a 27-2 vote on Tuesday.

Phil Knight and other Nike executives were silent this time. However, when House Bill 2646 went to the House floor on March 21, Nike executives launched a last-minute attempt to scuttle the legislation. It was nonetheless approved by the House with a 47-10 vote.

Tom Powers, communications director for the Senate Majority Office, said there were no such last-minute lobbying efforts this time.

Because Senate Business and Transportation Committee members made some minor changes in the bill, Powers said the legislation needs to go back to the House for a concurrence vote before it is forwarded to Gov. John Kitzhaber for his signature.

Powers said Knight, co-founder of Nike, dislikes the fact that the bill could drive up the costs of projects such as the $200 million Matthew Knight Arena at the University of Oregon. Knight was the chief donor for the project, which was completed in 2011 and named in honor of his late son. He also is a major donor to the university in general.

State law already requires that prevailing wage by paid for campus projects, but only when they’re funded publicly. House Bill 2646 would expand the law to include projects that use private donations.

“The requirement of paying prevailing wage on university projects has come under legal question when those projects are not publicly funded, depending upon how the project is structured,” said state Sen. Chris Edwards, D-Eugene, who carried the bill on the Senate floor. “This bill would bring clarity and would require prevailing wage on projects built on university property whether publicly or privately funded.”

House Majority Leader Val Hoyle, D-Eugene, was another significant champion of the bill.

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Have you heard them? Carpenters with drums and whistles are picketing outside the Multnomah County Central Library on Southwest 10th Avenue this morning. And… why?

The picketers are members of the . The group is there to protest general contractor , according to union representative Joshua Montero. R&H is the contractor on a renovation project currently happening at the library.

“They hire non-area standard companies,” Montero said. “We’re letting the community know we’re here.”

While the library project is a public job, others R&H works on may not be, Montero said. Though he had no current examples, he said the group was aiming to raise awareness about the importance of using sub-contractors that provide area-standard wages and benefits.

For one example, Montero referenced R&H’s prior use of subcontractor , whose owner Steve Nagy pled guilty earlier this year to a host of charges, including rigging bids and forcing workers to return parts of their paychecks to him. Montero said that the union keeps an eye out for other companies likes Nagy’s.

R&H Construction President John Ward said he wasn’t comfortable commenting on what the union was saying this morning, because he hasn’t been down to the site to find out what they are protesting. In response to the charge about S&S Drywall, he had this to say:

“I think everyone has well-documented the story (of Steve Nagy),” Ward said. “They aren’t in business anymore. I don’t know why (the union) would be using them as an example of anything they’re doing.”

Update, 10:35 a.m.: Ward has made it down to the site, and has a new response to what the protesters are doing. Here’s his statement:

We solicit and hire subcontractors based who is the most qualified for the project.

Whether they are union or non union is not a factor in the decision. We pre-qualify all of our subcontractors to make sure they are in good standing with the construction community.

I visited the Library project to assess the situation and their sign state that R&H does not pay area standard wages. It doesn’t appear to have anything to do with our subcontractor base. The Library is a Public project that requires everyone to pay BOLI prevailing wage.

The definition of an “Area Standard Wage” is the BOLI prevailing wage rate as published in the “Prevailing Wage Rates for Public Works Contracts in Oregon”. The source for determining this rate structure is the union.

R&H is a merit shop contractor with a labor force of approximately 85 craft people. We hire our own employees and subcontractors based on who is the most qualified for the job.

R&H pay is extremely fair and competitive within our industry. Some wage rates are higher than the union and some are slightly lower. R&H provides full benefits for its employees and families.

Our workforce has been with us and average of 12 years with many over 20 years R&H is a very family oriented company that is socially responsible and very active in giving back to the communities.

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Planned Parenthood last week declined a $73,893 federal Community Development Block Grant slated to help pay for construction of the agency’s $8.5 million regional health center in Glenwood.

Accepting the money would have required Planned Parenthood to pay prevailing wages to all construction workers under the federal Davis-Bacon Act, which the agency’s leadership didn’t realize until after the general contractor had put the project out to bid to subcontractors.

“We can’t go back and rebid the project at this point,” said Cynthia Pappas, CEO of Planned Parenthood of Southwestern Oregon. “Anyone in the construction industry would understand that.”

The CDBG grant had been earmarked to pay for a bio-swale stormwater treatment system, but instead it will be returned to the community development grant fund. The system will remain in the construction plans, however, and Planned Parenthood plans to market the facility’s many green building features to its donors in hopes of finding the bio-swale funding elsewhere.

Crews are on schedule to pour the slab on Nov. 3, and Chambers Construction has been making “incredible progress,” Pappas said, because the weather has remained relatively rain free so far.

“All of the sub-contractors were chosen through a competitive process, and PPSO is very supportive of paying prevailing wages,” Pappas said. “We’re committed to ensuring that all of the workers on the project are fairly compensated.”

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In the never-ending saga of independent versus union contractors, the independent side has notched a victory in North Clackamas County.

The North Clackamas School District board of directors shot down a policy pitched by board member and passionate pro-union advocate Sam Gillispie that would allow union representatives access to school construction sites. The representatives would be allowed to question workers on site to make sure they’re being paid the state-mandated prevailing wage.

I wrote about (subscription required) the proposed policy back in May, and it seems as if the majority of the school board took the side of the sources in my article at its board meeting last week. Not only did the board fail to second a motion for a vote on the policy brought to the board by Gillispie, the board also shot down the idea of sending the policy to a subcommittee for more work.

I try to cover the entire spectrum of opinions on any union/independent contractor debate, and I have been persuaded by both sides on various occasions. But I must admit – in this case, I think the board has made the right choice.

For one, the folks over at the Oregon Bureau of Labor and Industries already have long-standing policies in place for workers to . While it can be a slightly complicated process, plenty of individuals at BOLI can confidentially walk a worker through the steps.

The other – and more important – point is that construction sites are dangerous environments. The last thing needed at construction site, especially one where children will eventually learn, is more distractions and more people who could potentially be injured.

From what I’ve heard, some similar policies could be drafted for other school districts around the area and potentially, other public agencies around the state. I just hope that while everyone can agree that paying fair, family wages is a very important issue, so is the safety of the construction workers and the people who occupy the buildings once they are complete.

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2011 won’t produce a vote by the Oregon Legislature on a bill that would have required prevailing wage be paid to construction workers on some projects within enterprise zones.

But the bill is certain to be revisited in a future session.

Democrats failed to gather enough signatures by a Tuesday deadline for a discharge petition that would have moved from a House committee to the House floor. Union officials strongly supported the bill, but others worried that it would negate one of the state’s most powerful economic development tools.

“This isn’t just about union workers; it’s about making sure all workers on these jobs are paid fair, family wages,” said bill sponsor Rep. Michael Schaufler, D-Happy Valley.

The bill would require construction workers to be paid prevailing wage – a standard wage determined by the state that is paid to workers on public projects – on jobs worth over $5 million that receive enterprise zone incentives.

An enterprise zone is a state-sanctioned, municipality-governed program. Companies can qualify for property tax abatement from three to five years on improvements they make to properties within the zone. However, companies must create a predetermined number of jobs at a predetermined wage.

“We fully support the state’s enterprise zone program,” said John Mohlis, executive secretary of the Oregon State Building and Construction Trades Council. “But it seems to us that if there are rules in place to ensure that workers inside the facility are to be paid fair area wages, why wouldn’t we want to have similar standards in place to ensure the construction workers are being paid fair area standards?”

This was the line of thinking in 2009 when an identical bill was passed by both the House and the Senate, but not signed by then-Gov. Ted Kulongoski. In this year’s session, House Bill 2624 was passed out of the Committee on Business and Labor and referred to the Committee on Revenue. But because no one was pushing the bill to the House floor and the legislative session is set to end soon, Democrats started a discharge petition.

However, only 17 signatures were gathered, and 31 were needed to send HB 2624 to the House floor, so the bill will start the next session in the same committee.

Rep. Jason Conger, R-Bend, fully supports the enterprise zone program, and noted that “little old Redmond” has created 1,700 permanent jobs and $123 million in capital investments since its enterprise zone was established in 1988. But he thinks the added costs of prevailing wage would deter companies from coming to Oregon, despite incentives.

John Southgate, economic development manager for Hillsboro, added that Oregon can’t significantly compete with other states in regard to incentives. Enterprise zones are one of Oregon’s few advantages and would become less attractive if costs increased, he said.

“We can’t cut the big checks like some states can,” Southgate said.

Research conducted by Ron Fox, executive director of Southern Oregon Regional Economic Development Inc., found that requiring prevailing wage in an enterprise zone could increase a project’s cost by as much as 25 percent. That would essentially negate the property tax abatement, and perhaps increase cost, he said.

The League of Oregon Cities and the Association of Oregon Counties oppose the bill because they say those that oversee enterprise zones already have authority to require prevailing wage be paid.

Associated Builders and Contractors, which oversees independent contractors, also opposed the bill.

“Expanding prevailing wage to private construction work is a bad idea, end of story,” said John Killin, president of ABC‘s Pacific Northwest chapter. “Public and private work are incredibly different, and there just isn’t a case for prevailing wage in private work.”

Schaufler, meanwhile, said Oregon will continue to benefit from enterprise zones.

“The program has been successful and it will continue to be,” he said. “I want to make it clear: We are not trying to change the program; we are trying to get fair wages for those that work on the projects.”

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Construction sites can be crowded, chaotic places full of dangerous equipment and safety hazards. But the North Clackamas School District Board of Directors believes there should be room for at least one more person on district project sites to make sure workers are being paid the required wages.

A new draft district policy discussed by the school board last week would allow labor organization representatives on school construction sites to see whether workers are being paid prevailing wages mandated by Oregon law. But while some school board members consider the policy necessary to ensure fair wages are being paid, others say it would be redundant and create a hazard.

Prevailing wage disputes in Oregon

Failure to comply with state requirements for prevailing wage has not been a problem within the North Clackamas School District since its $229.1 million construction bond was passed in 2006; however, the issue has popped up around the state.

According to an analysis of data from the Oregon Bureau of Labor and Industries by the Oregon Center for Public Policy, construction workers in the state filed 1,823 claims for unpaid wages from June 2006 to June 2010. The alleged underpayment of those claims totaled $5.2 million – an average of $2,847 per claim – according to the data.

Of those claims, BOLI found that workers were owed $3.2 million. Only $1.9 million of that $3.2 million – or 61 percent – was actually recovered by the workers that filed complaints.

The data on construction wage complaints is part of an OCPP report titled “The Tip of an Iceberg: Substantial Wage Theft Complaints in Oregon’s Construction Industry.” As the report states, the numbers reflect only the share of construction workers with wage claims who knew about BOLI and sought the bureau’s assistance despite the possibility of employer reprisal.

The draft policy, which will go up for vote in front of the entire board on June 16, is being pitched by 16-year board member Sam Gillispie, who also is the grievance director for United Food and Commercial Workers Local 555. If the policy were approved, Gillispie said, it would allow union representatives to come on site and inquire about workers’ wages as long as they were to check in with the project manager first and have proper safety equipment on.

“On a public project, everyone must get paid prevailing wages – whether union or not,” Gillispie said. “All this does is give a friendly gesture towards craft unions that allows them to make sure.”

Gillispie, who wears his union badge proudly, said that these days the costs of materials are generally similar across the board, so public jobs are usually won or lost with the cost of labor. The policy would help make sure federal and state laws were being followed, as well as help union firms compete with nonunion firms.

“This access agreement doesn’t ask for anything beyond what the Davis-Bacon Act already says,” he said. “But having someone on site can help make sure contractors aren’t cooking the books when they turn over their certified payrolls.”

John Killin, president of the Pacific Northwest chapter of the Associated Builders and Contractors, however, said he would have recommended that the school board talk with contractors before drafting a policy. He said the state already has a process to catch noncompliant contractors, and that the effort would waste time in an already hectic environment.

“It’s totally unnecessary and doesn’t make sense,” Killin said. “Not to mention that there are safety issues here, as well as insurance and liability issues. What are they going to do – walk around with a prevailing wage booklet asking each person if they are making this amount?”

Enforcement of prevailing wage requirements is handled by the state Bureau of Labor and Industries. In addition to reviewing certified payrolls on public projects, the agency also investigates claims made by employees, companies and labor organizations.

BOLI spokesman Bob Estabrook said the bureau wouldn’t take any sort of stance on the draft policy, or the issue in general. But he said he could see pros and cons.

“We’re the agency that enforces prevailing wage, so the official way to get it taken care of is to file a complaint with us and then we can conduct an investigation,” Estabrook said. “But at the same time we like having as much information as possible when we do conduct an investigation, so there’s no harm in having a second set of eyes to help out.”

The issue may not be significant in the North Clackamas School District, however. Since a $229.6 million construction bond – the largest school bond approved in state history – was OK’d by voters in 2006, not one contractor was disqualified by BOLI for not paying fair wages, according to Garry Kryszak, the bond construction manager for the school district.

“There were probably three instances where the state took a look to make sure a worker was being classified in the right category,” Kryszak said. “But in all this bond work, I don’t think there were any instances of BOLI investigating complaints.”

But even if the policy is redundant, Gillispie said it would be good for any public agency. He said he plans to forward the policy if it were approved by the North Clackamas board.

“This is something I’ve been looking to do for a while now, and when Paul Riggs came on board with the (Columbia Pacific Building Trades Council), we made it happen,” he said. “And I truly think you’ll see this start to pop up in other public entities.”

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A couple of times a year, officials at the Oregon Bureau of Labor and Industries publish a comparison of prevailing state and federal wages.

But there is a problem.

Federal wages change 20 times during the course of the year, Kate Newhall, legislative director for BOLI, told members of the Senate Business, Transportation and Economic Development Committee last week.

It’s confusing, Newhall said.

Comparing state and federal wages is important, she said, because Oregon’s prevailing wage law requires workers hired under state contracts to be paid the higher of the two rates.

Tracking state wages is easy, she added. However, factoring in fluctuating wages and benefits on a national scale swelled the January report to 499 pages requiring 200 hours of staff time. Compare that, Newhall said, to January 2010, when the report was only 179 pages.

Current federal rates can be verified online, but state law requires BOLI to print hard copies of comparisons at $11 a pop.

This is where Senate Bill 178 comes in.

It would abolish the requirement for BOLI to print comparisons of state and federal wages.

“The requirement that contract specifications provide information about how to electronically access the applicable wage rates is retained,” Newhall said.

“To ensure utmost clarity, SB 178 creates a new requirement that every public works contract and subcontract contain a provision that workers must be paid no less than the higher of the applicable state or federal prevailing rate of wage.”

The legislative effort is commendable, Newhall added.

“This legislation reduces confusion for contractors by discontinuing an unwieldy, unusable publication while saving agency resources in printing and staff time that are better focused on providing the clear information and technical assistance necessary for contracting agencies and contractors to comply with the prevailing wage rate law,” she said.

Following a public hearing, the committee will schedule a work session on the bill.

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