Drafting Error In Bill Forces Payment Of Prevailing Wage On All Public Construction Projects

A drafting error in one of the bills that helped keep House Democrats holed up at a hotel in Urbana, Illinois for more than a month this year will make unions very happy. Instead of raising the project size threshold from $150,000 to $250,000 for the requirement that public construction projects pay the prevailing wage rate, starting July 1 and continuing through the end of this year, all public construction projects regardless of size will be subject to the higher wage requirement. From the Fort Wayne Journal-Gazette:

A mistake in a bill meant to loosen construction wage requirements in Indiana will force all public works projects – regardless of the cost – to go through a process establishing wage rates.

Senate President Pro Tem David Long, R-Fort Wayne, said legislative leaders only recently discovered the error in House Bill 1216 that will affect state and local projects costing less than $150,000 for six months.

“There was a drafting error. It was not caught, and (the legislative services agency) has apologized to us,” Long said. “It should have been caught.”

Indiana’s Common Construction Wage Act establishes labor rates in construction projects contracted by state and local government.

Supporters say it will ensure that government does not upset the market equilibrium in the private sector, while opponents think it will drive up construction labor costs on public projects.

The intent of the bill was to increase the threshold level at which a project must use a common construction wage to $250,000 starting Jan. 1, then $350,000 starting Jan. 1, 2013.

But an error deleted the threshold for all projects between July 1 and Jan. 1. That means public projects – even those costing less than $150,000 – will need to have a common construction wage.

House Democratic Leader Patrick Bauer of South Bend fought against increasing the threshold in the first place, arguing that workers on construction projects that don’t use a common wage aren’t paid enough.

“Maybe this will be a great test to show we can build and have economic development and you don’t have to lower people’s wages,” he said. “It’s a six-month trial showing we can build while giving good living wages.”

Long believes state and local officials should follow the current law and the intent of the legislature, and he said he hopes union members don’t “skewer” the public into paying higher wages on these smaller projects.

But Pete Rimsans, executive director of the Indiana State Building and Construction Trades Council, said “It’s the law, and you can’t just put your blinders on.”

He did say, however, that he doesn’t think a lot of projects will be affected – mainly just smaller maintenance work, such as moving classroom walls in a school for retrofitting, or emergency repairs.