Prevailing Wage Classification Definitions
Help write them, or be written out by them.
ABC is working with the Department of Labor and Industry to build definitions for prevailing wage classifications. We have a historic opportunity to sit at the table and help develop statewide rules. In the past, many members have struggled to properly classify workers before bidding, and sometimes workers or owners have differing interpretations. With no written definitions, the landscape has been unclear.
At ABC’s urging, we have a historic opportunity to help write the permanent definitions for trade classifications for prevailing wage. This move will provide clarity and stability to the rules for everyone involved, but a lot can change based on how they are composed. We need your help NOW!
We need you to supply feedback on the proposed definitions. Follow THIS LINK to the proposed definitions. They have been drawn from other state’s prevailing wage definitions, the Dictionary of Occupational Titles, and union contracts. Some of the definitions are fully defined. Some are basically blank. Others seem to favor one construction trade or another.
We need your help in vetting these definitions. Please send your emailed response to Government Affairs Director Phil Raines at praines@mnabc.com or President Robert Heise at rheise@mnabc.com. Or give us a call at the office at 952-941-8693.
These definitions will set the rules for prevailing wage work in Minnesota, so please take a few minutes to provide feedback on the trades that are important to your business.
We have also provided a handy table of contents to help get you quickly through the document:
Labor Code Description/Page
101 LABORER, COMMON (GEN LABOR WRK) 1
102 LABORER,SKILLED-ASST CRFT JRNYMN 3
103 LABORER, LANDSCAPING 3
104 FLAGPERSON 4
105 WATCHPERSON 4
106 BLASTER 4
107 PIPELAYER (WATER, SEWER & GAS) 4
108 TUNNEL MINER 5
109 UNDRGRND & OPEN DITCH LABOR (8') 5
401 HEATING AND FROST INSULATORS 6
402 BOILERMAKERS 8
403 BRICKLAYERS 9
404 CARPENTERS 11
405 CARPET LAYERS (LINOLEUM) 14
406 CEMENT MASONS 16
407 ELECTRICIANS 17
408 ELEVATOR CONSTRUCTORS 19
409 GLAZIERS 21
410 LATHERS 23
411 GROUND PERSON 24
412 IRONWORKERS 25
413 LINEMAN 27
414 MILLWRIGHT 29
415 PAINTERS 30
416 PILEDRIVER 31
417 PIPEFITTERS - STEAMFITTERS 32
418 PLASTERERS 34
419 PLUMBERS 36
420 ROOFER 38
421 SHEET METAL WORKERS 40
422 SPRINKLER FITTERS 42
423 TERRAZZO WORKERS 43
424 TILE SETTERS 44
425 DRYWALL TAPER 45
430 WIRING SYSTEM TECHNICIAN 46
431 WIRING SYSTEM INSTALLER 48
435 ASBESTOS ABATEMENT WORKER 49
436 SIGN ERECTOR 50
The concept of “prevailing wage” was introduced by a Republican Congressman from New York that was offended by low-wage African-American workers from the South working on a federally-funded project in his district. There was no evidence that the work was shoddy; he was just upset that local contributors didn’t get the work. The Congressional Record would certainly be censored today in his description of the winning bidders.
Racism and local-bias still plays a role in this massive abuse of taxpayer funds. And Minnesota’s prevailing wage law is even
more abusive than most state laws, using the statistically meaningless
“mode” from a non-scientific survey to obtain the highest wage possible. Over the last two decades, several states have repealed prevailing wage, and it is time for Minnesota to do the same.
Survey flawed
The prevailing wage survey, taken once per year by the Minnesota Department of Labor and Industry, has a return rate of less than one-percent. Most contractors do not fill out the survey because the data has inadequate legal protection and opens the contractor to liability without offering compensation. The survey instructions offer little guidance about how to fill out the survey, and do not define employee classifications in any meaningful way. As result, two-thirds of all wage rates in Minnesota are not set locally each year because not enough survey data is returned to even set a rate.
Calculation is obscene
Once the limited data set is returned, most prevailing wage laws use the statistical average (the mean or median) to find a typical wage. Minnesota’s law calls for the “mode” or most frequently occurring, calculated to the penny, including fringe benefits. This method was used to set the wage at the collectively bargained rate, and to deliberately disenfranchise the 3/4ths of workers who work for merit shops and have a diversity of wage rates.
If that situation were not bad enough, the calculation gets worse when you consider what happens when there are two wages tied. In that situation, the law shows its bias by automatically selecting the highest rate. When it comes to labor rates, it seems that prevailing wage wants the highest bidder, not the lowest, or even a happy medium.
Local contractors first
The simple reality is that with all things being equal, the local contractor is automatically going to have an advantage in bidding. Local contractors know the project best, have local workers that don’t need to be paid a travel stipend, and have hired local people at the appropriate rate for the area.
The fact is that more often than not, prevailing wage is used to raise the rate so that companies from big cities can compete. Without mandatory inflated wages, they could not travel to your area and compete.
No quality or on-time improvement
One of the constant arguments in favor of prevailing wages are that it will improve quality or timeliness of a project. Put simply, study after study has shown no correlation. Job specifications and oversight are the appropriate tools for quality and timeliness, and have a demonstrated effect. Prevailing wage has no impact.
Inspection costs
A recent study by the City of Mankato found that adopting prevailing wage would cause a $5,000 per project monitoring cost for the city. Once adopted, local governments must collect and inspect wage forms and audit compliance, requiring at least a part-time worker to be trained to monitor prevailing wages. And the $5,000 figure does not include the costs of litigation when a complaint arises.
It doesn’t add up
In the end, studies have shown that Minnesota’s prevailing wage law adds 7-10% to the cost of a project, and no measurable benefits for the city or taxpayer are shown. At best, prevailing wage increases wages for some workers (construction), by taxing everyone else more to pay for it. At worst, it is a racist system to exclude the majority of workers who choose to worker on a merit system.
Calculate Current Prevailing Wage
Minnesota's prevailing wage law (Minnesota Statutes 177.41 through 177.44) requires employees working on state-funded construction projects or other projects covered by law be paid wage-rates comparable to wages paid for similar work in the area where the project is located. Click Here to calculate.
If you have concerns about prevailing wage, please contact ABC for more information and real life examples of how prevailing wage works against local workers and taxpayers.