No More Kickbacks on Public Work!
A controversial issue in the industry is the use of “industry funds,” “market recovery grants,” and “job targeting funds” to buy down the cost of labor on a project and guarantee work for union members only. ABC and others in the construction industry feel that this practice is unethical, should be illegal on all public work, and is really just an old-fashioned kickback.
A kickback is the return of all or part of a payment in order to guarantee future employment. These “industry funds,” derived from mandatory payroll deductions, line the pockets of contractors to guarantee that only union workers can be employed on the job. These funds are shifted across companies, unions, and even states.
The federal government, moving to protect prevailing wage guarantees, has prohibited both the collection and payment from these funds on federally-funded work. Other states have also worked to eliminate this practice. In fact, Minnesota law currently bans “rebates” on prevailing wage work, but state officials have been reluctant to enforce this provision evenly on union and non-union shops.
Minnesota cherishes its reputation for efficient, clean government. Our state must ban this abusive practice and ensure open and honest contracting on public works.