Bill Text: IA HF161 | 2021-2022 | 89th General Assembly | Introduced

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Bill Title: A bill for an act requiring the payment of local prevailing wage rates to persons working on public improvements for public bodies, providing remedies and penalties, and including effective date provisions.

Spectrum: Partisan Bill (Democrat 14-0)

Status: (Introduced - Dead) 2021-01-22 - Introduced, referred to Labor. H.J. 181. [HF161 Detail]

Download: Iowa-2021-HF161-Introduced.html

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House File 161 - Introduced
HOUSE FILE 161
BY HUNTER , OLSON , JACOBY ,
STECKMAN , KRESSIG , CAHILL ,
WILBURN , STAED , JAMES ,
MASCHER , BROWN-POWERS ,
GJERDE , EHLERT , and COHOON
A BILL FOR
An Act requiring the payment of local prevailing wage rates to
persons working on public improvements for public bodies,
providing remedies and penalties, and including effective
date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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Section 1. Section 84A.5, subsection 4, Code 2021, is
amended to read as follows:
4. The division of labor services is responsible for the
administration of the laws of this state under chapters 88 ,
88A , 88B , 89 , 89A , 89B , 90A , 91 , 91A , 91C , 91D , 91E , 91F, 92 ,
and 94A , and sections 73A.21 and 85.68 . The executive head of
the division is the labor commissioner, appointed pursuant to
section 91.2 .
Sec. 2. Section 91.4, subsection 2, Code 2021, is amended
to read as follows:
2. The director of the department of workforce development,
in consultation with the labor commissioner, shall, at the
time provided by law, make an annual report to the governor
setting forth in appropriate form the business and expense of
the division of labor services for the preceding year, the
number of remedial actions taken under chapter 89A , the number
of disputes or violations processed by the division and the
disposition of the disputes or violations, and other matters
pertaining to the division which are of public interest,
together with recommendations for change or amendment of the
laws in this chapter and chapters 88 , 88A , 88B , 89 , 89A , 89B ,
90A , 91A , 91C , 91D , 91E , 91F, 92 , and 94A , and section 85.68 ,
and the recommendations, if any, shall be transmitted by the
governor to the first general assembly in session after the
report is filed.
Sec. 3. NEW SECTION . 91F.1 Short title.
This chapter shall be known and may be cited as the “Public
Improvement Quality Protection Act” .
Sec. 4. NEW SECTION . 91F.2 Public policy.
It is in the public interest that public improvements
are completed by the best means and highest quality of labor
reasonably available, and that workers working on public
improvements be compensated according to the real value of the
services they perform. It is the policy of this state that the
wages of workers working on public improvements should be at
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least equal to the prevailing wage rates paid for similar work
by responsible contractors in the community as a whole in order
to accomplish all of the following:
1. Protect workers and their contractors and subcontractors
from the effects of serious and unfair competition resulting
from wage levels detrimental to efficiency and well-being.
2. Ensure that contractors compete with one another
on the basis of the ability to perform work competently
and efficiently while maintaining community-established
compensation standards.
3. Recognize that local participation in public
improvements and family wage income and benefits are essential
to the protection of community standards.
4. Encourage training and education of workers to industry
skills standards.
5. Encourage contractors and subcontractors to use funds
allocated for employee fringe benefits for the actual purchase
of those benefits.
Sec. 5. NEW SECTION . 91F.3 Definitions.
As used in this chapter, unless the context otherwise
requires:
1. “Commissioner” means the labor commissioner appointed
pursuant to section 91.2.
2. “Contractor” or “subcontractor” means a person who
undertakes, offers to undertake, purports to have the capacity
to undertake, or submits a bid, individually or through others,
to engage in a public improvement.
3. “Custom fabrication” means the fabrication of plumbing,
heating, cooling, ventilation, architectural systems,
structural systems, exhaust duct systems, or mechanical
insulation.
4. “Division” means the division of labor of the department
of workforce development.
5. a. “Fringe benefits” means the following for the
provision or purchase of any of the benefits enumerated in
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paragraph “b” :
(1) The contribution irrevocably made by a contractor or
subcontractor to a trustee or to a third person pursuant to a
plan, fund, or program.
(2) The costs to the contractor or subcontractor which
may be reasonably anticipated in providing benefits to
workers pursuant to an enforceable commitment to carry out a
financially responsible plan or program, given in writing to
the workers affected.
b. (1) Medical or hospital care.
(2) Pensions or annuities on retirement or death.
(3) Supplemental unemployment benefits.
(4) Life insurance.
(5) Disability and sickness insurance.
(6) Accident insurance for nonwork-related accidents.
(7) Vacation or holiday pay.
(8) Defraying costs of apprenticeship programs approved by
and registered with the United States department of labor’s
office of apprenticeship.
6. “Interested party” means any of the following:
a. A contractor who submits a bid for the purpose of
securing the award of a contract for a public improvement.
b. A subcontractor of a contractor mentioned in a bid
referred to in paragraph “a” .
c. A worker employed by a contractor or subcontractor
described in either paragraph “a” or “b” .
d. A labor organization that represents workers engaged
in the same craft or classification as workers employed by a
contractor or subcontractor described in either paragraph “a”
or “b” and that exists, in whole or in part, for the purpose
of negotiating with employers concerning the wages, hours, or
terms and conditions of employment of employees.
e. A joint labor-management committee established pursuant
to the federal Labor Management Cooperation Act of 1978, 29
U.S.C. §175a.
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7. “Locality” means a county of this state.
8. “Maintenance work” means the repair of existing public
improvements when the size, type, or extent of the public
improvement is not changed or increased.
9. “Prevailing wage rate” means the hourly wage plus
fringe benefits that the commissioner determines prevails in
accordance with this chapter, including all of the following:
a. Apprentice ratios and the prevailing apprentice pay
levels for each craft, classification, or type of worker which
the commissioner determines prevails in accordance with section
91F.5.
b. A prevailing rate for overtime pay for work in excess
of the normal prevailing workday and for weekend overtime pay
for each craft, classification, or type of worker, including
apprentices.
c. Holiday pay for holidays that prevail in the locality in
which the work is being performed.
10. “Public body” means the state and any of its political
subdivisions, including but not limited to a county, city,
township, school district, state board of regents, and public
utility. For the purposes of this chapter, “public utility”
includes municipally owned utilities and municipally owned
waterworks.
11. a. “Public improvement” means any of the following that
meets the criteria set out in paragraphs “b” and “c” :
(1) Construction, alteration, reconstruction, repair,
rehabilitation, refinishing, refurbishing, remodeling,
renovation, custom fabricating, maintenance, landscaping,
improving, moving, wrecking, painting, decorating, or
demolishing of, or adding to or subtracting from any building,
structure, highway, road, street, bridge, alley, sewer, ditch,
sewage disposal plant, waterworks, parking facility, railroad,
excavation or other structure, project, development, or
improvement, or any part thereof undertaken by a public body,
including any of the following related activities:
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(a) The erection of scaffolding or other structures or
works.
(b) The maintenance, repair, assembly, or disassembly of
equipment.
(c) The testing of materials.
(d) The hauling of refuse from a site to an outside disposal
location.
(e) The cleaning of grounds or structures.
(f) The addition to or fabrication into any structure,
project, development, or improvement of any material or article
of merchandise undertaken by a public body.
(2) The preparation and removal of roadway construction
zones, lane closures, flagging, or traffic diversions
undertaken by a public body.
(3) The installation, repair, maintenance, or calibration
of monitoring equipment for underground storage tanks
undertaken by a public body.
(4) Work that is performed on any property or premises
dedicated exclusively or nearly so to the completion of a
public improvement, and transportation of supplies, material,
and equipment to or from the property or premises undertaken
by a public body.
b. Work on the public improvement is performed under public
supervision or direction, and the work is financed wholly or
in part from public funds, or if at the time of commencement
of the public improvement all of the following conditions with
respect to the public improvement are met:
(1) Not less than fifty-five percent of the structure is
leased by a public body, or is subject to an agreement to be
subsequently leased by a public body.
(2) The portion of the structure that is leased or subject
to an agreement to be subsequently leased by a public body
measures more than twenty thousand square feet.
c. The public improvement has an estimated total cost that
exceeds twenty-five thousand dollars.
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12. “Worker” means an individual who performs any
labor or service for a contractor or subcontractor on a
public improvement but does not include an individual when
transporting a seller, supplier, manufacturer, or processor of
materials or equipment. The individual is deemed an employee
of a contractor or subcontractor unless all of the following
apply:
a. The individual provides labor or services free from the
direction or control over the means and manner of providing the
labor or services, subject only to the right of the person for
whom the labor or services are provided to specify the desired
results.
b. The individual providing the labor or services is
responsible for obtaining business registrations or licenses
required by state law or local ordinance to provide the labor
or services.
c. The individual providing the labor or services furnishes
the tools and equipment necessary to provide the labor or
services.
d. The individual providing the labor or services has the
authority to hire and fire employees to perform the labor or
services.
e. Payment for the labor or services is made upon
completion of the performance of specific portions of a public
improvement, or is made on the basis of a periodic retainer.
f. The individual providing the labor or services represents
to the public that the labor or services are to be provided
by an independently established business. An individual is
engaged in an independently established business when four or
more of the following circumstances exist:
(1) Labor or services are primarily performed at a location
separate from the individual’s residence or in a specified
portion of the residence that is set aside for performing labor
or services.
(2) Commercial advertising or business cards are purchased
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by the individual, or the individual is a member of a trade or
professional association.
(3) Telephone or electronic mail listings used by the
individual for the labor or services are different from the
individual’s personal listings.
(4) Labor or services are performed only pursuant to a
written contract.
(5) Labor or services are performed for two or more persons
or entities within a period of one year.
(6) The individual assumes financial responsibility
for errors and omissions in the performance of the labor or
services as evidenced by insurance, performance bonds, and
warranties relating to the labor or services provided.
Sec. 6. NEW SECTION . 91F.4 Administration —— rules.
1. The commissioner and the division shall administer this
chapter.
2. The commissioner shall adopt rules pursuant to chapter
17A to administer this chapter.
Sec. 7. NEW SECTION . 91F.5 Determination of prevailing
wages.
1. The commissioner shall determine annually, and publish
pursuant to subsection 2, on the first business day of
July, the prevailing wage rates by locality for each craft,
classification, or type of worker needed to perform work on
public improvements. The rates shall be conclusive for one
year from the date of publication unless superseded within the
one year by a later publication of the commissioner, or for a
longer period as provided in subsection 5.
2. The commissioner shall announce all prevailing wage rate
determinations by locality and give notice by posting them
on the portion of the department of workforce development’s
internet site related to the division. A printed version of
the prevailing wage rates for the state shall be available to
the public upon request to the division.
3. The public body awarding any contract for a public
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improvement, or otherwise undertaking any public improvement,
shall obtain from the internet site the prevailing wage rate
in the locality in which work on the public improvement is
to be performed for each craft, classification, or type of
worker needed to perform work on the public improvement.
After a public improvement contract is awarded, or a public
improvement is otherwise undertaken, the prevailing wage
rate published by the commissioner and stated in the public
body’s public improvement procurement documents shall remain
in effect throughout the duration of the public improvement
unless superseded by a later determination and publication by
the commissioner, or unless multiyear prevailing wage rates
have been published by the commissioner at the time the public
improvement procurement documents were released.
4. a. In determining the annual prevailing wage rate
for any craft, classification, or type of worker, the
commissioner shall ascertain and consider the applicable
wage rates and fringe benefits established by collective
bargaining agreements, the prevailing wage rate determinations
that may exist for federal public improvements within the
locality, and other data obtained by the department during any
prevailing wage rate survey of contractors who participate in
an apprenticeship program approved by and registered with the
United States department of labor’s office of apprenticeship,
who provide health insurance and retirement benefits for their
workers, and who are registered with the division. Based
upon these considerations, the commissioner shall calculate
the prevailing wage rates based on the wage rate plus fringe
benefits most often occurring for each craft, classification,
or other type of worker within each locality.
b. The minimum annual prevailing wage rate determination
established by the department shall not be lower than the
prevailing wage rate determination that may exist for federal
public improvements within the locality and in the nearest
labor market area.
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c. None of the fringe benefits enumerated in this chapter
may be considered in the determination of prevailing wage
rates if the contractor or subcontractor is required by other
federal, state, or local law to provide such fringe benefits.
5. If the commissioner determines that the prevailing
wage rate for any craft, classification, or type of worker
is the rate established by a collective bargaining agreement
applicable in the locality, the commissioner may adopt that
rate by reference and that determination shall be effective
for the life of the agreement or until the commissioner adopts
another rate.
6. a. At any time within fifteen days after the division
has published on the department of workforce development’s
internet site the annual prevailing wage rates for each
classification, craft, or other type of worker in the locality,
any interested person affected may object to the determination
or the part of the determination as the interested person
may deem objectionable by filing a written notice with the
commissioner by restricted certified mail as defined in
section 618.15. When objecting to a prevailing wage rate
determination, the interested person shall submit, as a
part of the written notice, the prevailing wage rate the
interested person believes to be the correct prevailing wage
rate determination, stating the specific grounds to support
that position. Upon receipt of the notice of objection, the
commissioner shall reconsider the determination and shall
affirm or modify the determination and reply in writing by
restricted certified mail to the interested person within
fifteen days from the date of the receipt of the notice of
objection. Any modification to the prevailing wage rate
determination shall be effective on the date the modification
is published by the commissioner.
b. If the commissioner declines to modify the determination,
within ten days upon receiving receipt of the commissioner’s
decision, the interested person affected may submit in writing
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the objection to the division by restricted certified mail,
stating the specified grounds of the objection. The department
of inspections and appeals shall be notified of the objection
and set a date for a hearing before an administrative law judge
on the objection, after giving notice by restricted certified
mail to the interested person and the division at least ten
days before the date of the hearing of the time and place of
the hearing. The hearing shall be held within forty-five days
after the objection is filed, and shall not be postponed or
reset for a later date except upon the consent, in writing, of
the interested person and the division.
7. The party requesting a hearing shall have the burden of
establishing that the annual prevailing wage rate determination
for that locality was not determined in accordance with this
chapter. If the party requesting a hearing under this section
objects to the commissioner’s failure to include a craft,
classification, or type of worker within the annual prevailing
wage rate determination in the locality, the objector shall
have the burden of establishing that there is no existing
prevailing wage rate classification for the particular craft,
classification, or type of worker in any of the localities
under consideration.
8. The administrative law judge may in the administrative
law judge’s discretion hear each written objection filed
separately or consolidate for hearing any one or more written
objections filed with the division. At the hearing, the
division shall introduce into evidence the investigation it
instituted which formed the basis of its determination, and the
division or any interested objectors may introduce evidence
that is material to the determination. The administrative
law judge shall rule upon each written objection and make a
final determination, as the administrative law judge believes
the evidence warrants, and promptly serve a copy of the final
determination by personal service or restricted certified mail
on all parties to the proceedings. The administrative law
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judge shall render a final determination within thirty days
after the conclusion of the hearing.
9. If proceedings to review judicially the final
determination of the administrative law judge are not
instituted as provided in this section, the determination
shall be final and binding. The provisions of section 17A.19
shall apply to and govern all proceedings. Appeals from all
final orders and judgments entered by the court in review of
the final determination of the administrative law judge may be
taken by any party to the action. In all reviews or appeals
under this chapter, the attorney general shall represent the
division and defend its determination.
10. This section does not give reason or provide cause for
an injunction to halt or delay any public improvement.
Sec. 8. NEW SECTION . 91F.6 Payment of prevailing wages
required.
1. Contractors and subcontractors engaged in a public
improvement shall pay not less than the current specified
prevailing wage rates to all of their workers engaged in the
public improvement. However, this chapter does not prohibit
the payment of more than the prevailing wage rate to any
workers engaged in a public improvement.
2. All contractors and subcontractors required to pay the
prevailing wage rate under this chapter shall pay the wages
in legal tender, without any deduction for food, sleeping
accommodations, transportation, use of tools or safety
equipment, vehicle or equipment rental, or any other thing of
any kind or description.
Sec. 9. NEW SECTION . 91F.7 Requirements for public
improvements.
1. The public body awarding a contract for a public
improvement or otherwise undertaking a public improvement shall
specify in the call for bids for the contract that this chapter
applies to the public improvement.
2. If a public improvement requires the payment of
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prevailing wage rates, the public body shall require the
contractor to execute a written instrument that not less
than the prevailing wage rate shall be paid to all workers
performing work on the public improvement. The written
instrument shall also contain a provision that if it is found
that any of the contractor’s workers engaged in the public
improvement have been paid at a wage rate less than the
prevailing wage rate required by this chapter, the public body
may terminate the contractor’s right to proceed with the work
and the contractor and its sureties shall be liable to the
public body for any excess costs occasioned by the failure to
pay the prevailing wage rate. The written instrument shall
have attached a list of the specified prevailing wage rates
for all crafts, classifications, or types of workers in the
locality for each worker needed to be included in the contract
for the public improvement.
3. If a contract is let for a public improvement requiring
the payment of prevailing wage rates, the public body
awarding the contract shall cause to be inserted in the public
improvement specifications and contract a stipulation that
not less than the prevailing wage rate shall be paid to all
workers performing work under the contract. The contract
shall also contain a provision to the effect that if it is
found that any of the contractor’s workers engaged in the
public improvement have been paid at a wage rate less than the
prevailing wage rate required by this chapter, the public body
may terminate the contractor’s right to proceed with the work
and the contractor and its sureties shall be liable to the
public body for any excess costs occasioned by the failure to
pay the prevailing wage rate. All bid specifications shall
list the specified prevailing wage rates for all crafts,
classifications, or types of workers in the locality for each
worker needed to be included in the contract.
4. If a public improvement requires the payment of
prevailing wage rates, the contractor shall require any
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subcontractors engaged by the contractor on the public
improvement to execute a written instrument that not less
than the prevailing wage rates shall be paid to all workers
performing work on the public improvement. The written
instrument shall also contain a provision that if it is
found that any of the subcontractor’s workers engaged in the
public improvement have been paid at a wage rate less than the
prevailing wage rate required by this chapter, the public body
may terminate the subcontractor’s right to proceed with the
work and the subcontractor and its sureties shall be liable to
the public body for any excess costs occasioned by the failure
to pay the prevailing wage rate. The written instrument shall
have attached a list of the specified prevailing wage rates
for all crafts, classifications, or types of workers in the
locality for each worker needed to be included in the contract.
5. If a subcontract is let for a public improvement
requiring the payment of the prevailing wage rate, the
contractor to whom the contract is awarded shall insert
into the subcontract and into the public improvement project
specifications for each subcontract a written stipulation that
not less than the prevailing wage rate shall be paid to all
workers performing work under the subcontract. A subcontractor
shall insert into each lower-tiered subcontract a stipulation
that not less than the prevailing wage rate shall be paid
to all workers performing work under the subcontract. The
subcontract shall also contain a provision that if it is
found that any of the subcontractor’s workers engaged in the
public improvement have been paid at a wage rate less than the
prevailing wage rate required by this chapter, the public body
may terminate the subcontractor’s right to proceed with the
work and the subcontractor and its sureties shall be liable to
the public body for any excess costs occasioned by the failure
to pay the prevailing wage rate. All bid specifications shall
list the specified prevailing wage rates for all crafts,
classifications, or types of workers in the locality for each
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worker needed to be included in the subcontract.
6. A contractor or subcontractor engaging in a public
improvement shall submit a performance bond in an amount
determined by the public body which bond shall include a
provision that will guarantee the payment of the prevailing
wage rates as required by the contract.
7. Before final payment is made by or on behalf of a public
body of any sum or sums due on a public improvement, the
treasurer of the public body or other officer or person charged
with the custody and disbursement of the funds of the public
body shall require the contractor and subcontractor to file a
written statement with the public body, in a form satisfactory
to the division, certifying to the amounts then due and owing
from the contractor and subcontractor to any and all workers
for wages due on account of the public improvement, setting
forth the names of the persons whose wages are unpaid and
the amount due to each respectively. The statement shall be
verified by the oath of the contractor or subcontractor, as the
case may be, that the contractor or subcontractor has read the
statement certified by the contractor or subcontractor, knows
the contents, and that the statement is true in accordance with
the contractor’s or subcontractor’s own knowledge. However,
this chapter shall not impair the right of a contractor to
receive final payment from a public body because of the failure
of a subcontractor to comply with provisions of this chapter.
The treasurer of the public body or other officer or person
charged with the custody and disbursement of the funds of the
public body shall withhold the amount, if any, listed on the
verified statement filed pursuant to this section for the
benefit of the worker whose wages are unpaid as shown by the
verified statement filed by the contractor or subcontractor,
and the public body shall pay directly to any worker the amount
shown by the statement to be due to the worker for the wages.
Payment shall discharge the obligation of the contractor or
subcontractor to the person receiving the payment to the extent
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of the amount of the payment.
8. The public body awarding a contract for a public
improvement or otherwise undertaking a public improvement shall
notify the commissioner in writing, on a form prescribed by
the commissioner, if a contract subject to the provisions of
this chapter has been awarded. The public body shall file
the notification with the commissioner within thirty days
after the contract is awarded or before commencement of the
public improvement, and shall include a list of all first-tier
subcontractors.
Sec. 10. NEW SECTION . 91F.8 Federal public improvements
—— not applicable.
The provisions of this chapter shall not be applicable
to public improvements financed entirely by federal funds
which require a prevailing wage rate determination by the
United States department of labor. However, unless a federal
provision applies, if a public improvement is financed in part
by a public body and in part by federal funds, the higher of the
prevailing wage rates shall prevail for the public improvement.
Sec. 11. NEW SECTION . 91F.9 Records required.
1. While participating in a public improvement, the
contractor and each subcontractor shall do all of the
following:
a. Make and keep, for a period of not less than three years,
accurate records of all workers employed by the contractor or
subcontractor on the public improvement. The records shall
include each worker’s name, address, telephone number when
available, social security number, trade classification, the
hourly wages paid in each pay period, the number of hours
worked each day, and the starting and ending times of work each
day.
b. Submit weekly a certified payroll to the public body
in charge of the public improvement. The certified payroll
shall consist of a complete copy of the records identified in
paragraph “a” . The certified payroll shall be accompanied by a
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statement signed by the contractor or subcontractor which avers
that the records are true and accurate and the hourly wages
paid to each worker are not less than the prevailing wage rate
required by this chapter.
2. The public body in charge of the public improvement
shall keep the records submitted in accordance with subsection
1, paragraph “b” , for a period of not less than three years.
The records shall be considered public records and be made
available in accordance with chapter 22. Personal information
submitted in accordance with subsection 1, paragraph “a” ,
including names, addresses, social security numbers, telephone
numbers, and other identifying information shall remain
confidential and shall not be made public.
3. The contractor and each subcontractor shall make
available for inspection the records identified in subsection
1, paragraph “a” , to the public body in charge of the public
improvement, its officers and agents, and to the division.
4. For the purpose of verifying the accuracy of the records
submitted pursuant to this section, the contractor and each
subcontractor shall make its workers available at the site of
the public improvement for interview by the public body in
charge of the public improvement, its officers and agents, and
the division.
5. Contractors and subcontractors performing work on public
improvements subject to this chapter shall post the prevailing
wage rates for each craft, classification, or type of workers
involved in the public improvement in a prominent and easily
accessible place at the site of the public improvement or at
the place or places used by the contractor or subcontractor to
pay workers their wages.
Sec. 12. NEW SECTION . 91F.10 Powers of commissioner.
The commissioner shall do all of the following:
1. Inquire diligently about any complaint of a violation of
this chapter, institute actions for penalties prescribed, and
enforce generally the provisions of this chapter.
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2. Sue for injunctive relief against the awarding of a
contract, the undertaking of a public improvement, or the
continuation of a public improvement when the prevailing wage
rate requirements of this chapter have not been met.
3. Investigate and ascertain the wages of workers engaged in
any public improvement in this state.
4. a. Enter and inspect the place of business or employment
of a contractor, subcontractor, or workers employed on a public
improvement in this state, for the purpose of examining and
inspecting books, registers, payrolls, and other records of a
contractor or subcontractor that in any way relate to or have a
bearing upon the question of wages, hours, and other conditions
of employment of workers covered under this chapter.
b. Copy the books, registers, payrolls, and other
records as the commissioner or the commissioner’s authorized
representative deems necessary or appropriate.
c. Question the workers for the purpose of ascertaining
whether the provisions of this chapter have been and are being
complied with.
d. Administer oaths, take or cause to be taken depositions
of witnesses, and require by subpoena the attendance and
testimony of witnesses and the production of all books,
registers, payrolls, and other evidence relative to the matter
under investigation or hearing.
5. Require from a contractor or subcontractor full and
correct statements in writing, including sworn statements,
with respect to wages, hours, names, addresses, and other
information pertaining to its workers and their employment,
as the commissioner or the commissioner’s authorized
representative may deem necessary or appropriate.
6. Require a contractor or subcontractor to file, within
ten days of receipt of a request, any records enumerated in
subsection 4, sworn as to their validity and accuracy as
required by subsection 5. If the contractor or subcontractor
fails to provide the requested records within ten days, the
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commissioner may direct, within fifteen days after the end
of the ten-day period, that the fiscal or financial officer
charged with the custody and disbursements of the funds of the
public body, which contracted for construction of the public
improvement or undertook the public improvement, to immediately
withhold from payment to the contractor or subcontractor
up to twenty-five percent of the amount to be paid to the
contractor or subcontractor under the terms of the contract
or written instrument under which the public improvement is
being performed. The amount withheld shall be immediately
released upon receipt by the public body of a notice from
the commissioner indicating that the request for records as
required by this section has been satisfied.
7. If a contractor or subcontractor fails to provide
requested records in accordance with subsection 6 within ten
days, direct, within fifteen days after the end of the ten-day
period, the fiscal or financial officer charged with the
custody and disbursements of the funds of the public body,
which contracted for construction of the public improvement or
undertook the public improvement, to pay directly to workers
employed by the contractor or subcontractor from the amount
withheld from the contractor or subcontractor pursuant to
subsection 6 any prevailing wage rates found to be due and
payable to the workers.
8. Contract with a person registered as a public accountant
under chapter 542 to conduct an audit of a contractor,
subcontractor, or public body.
Sec. 13. NEW SECTION . 91F.11 Notice of violations.
1. For purposes of this section:
a. “Accurate records” means the payroll records required
to be submitted to the public body in charge of the public
improvement by section 91F.9. “Accurate records” also means the
hourly rate of contribution and costs paid for fringe benefits
and whether the contributions and costs of the fringe benefits
were paid into a fund or paid directly to the worker.
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b. “Decision” means a determination by the division that a
single violation of this chapter has occurred, warranting the
commissioner to issue a notice of violation to a contractor or
subcontractor.
c. “Notice of second violation” is a formal written notice
issued by the division advising a contractor or subcontractor
that a second or subsequent violation has occurred within three
years from the date of the notice of a first violation.
d. “Notice of violation” means a formal written notice
issued by the division to a contractor or subcontractor
that the division has made a decision that the contractor or
subcontractor has violated this chapter.
e. “Violation” means that a contractor or subcontractor has
done one of the following:
(1) Failed or refused to pay the prevailing wage rate to one
or more workers as required by this chapter.
(2) Failed to keep accurate records as required by this
chapter.
(3) Failed to produce for the division accurate records or
produced records not in compliance with this chapter.
(4) Refused to submit records or testimony to the division
in response to a subpoena issued in accordance with this
chapter.
(5) Refused to comply with the certified payroll provision
of section 91F.9.
(6) Refused the division access, at any reasonable hour at
a location within the state, to inspect the contractor’s or
subcontractor’s records as required by this chapter.
(7) Failed to insert into each subcontract or lower-tiered
subcontract and into the public improvement specifications
for each subcontract or lower-tiered subcontract or provide a
written instrument if no contract exists, a written stipulation
that not less than the prevailing wage rate be paid as required
by this chapter, and a statement that if it is found that a
subcontractor’s workers engaged in the public improvement have
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been paid at a rate of wages less than the prevailing wage rate
required to be paid by the contract, the public body shall
terminate the subcontractor’s right to proceed with the work.
(8) Failed to obtain a bond in the proper amount that
guarantees the payment of the prevailing wage rates required in
the contract.
(9) Failed to post the prevailing wage rates as required by
this chapter.
2. After receipt of a complaint or on the division’s
initiative, the commissioner shall review the investigative
file to determine whether a violation has occurred for
which the contractor or subcontractor must be given notice.
All information and observations made during an audit or
investigation shall be considered and shall constitute the
basis for the division’s decision that this chapter has
been violated and that a notice of violation is required
to be issued. The notice of violation shall identify the
specific violation and the amount of moneys estimated due the
division and in controversy based on reasons contained in the
investigative file.
3. In making a decision that a contractor or subcontractor
has failed to allow the commissioner access to accurate
records, the commissioner shall rely on the information
contained in the investigative file, the certified payroll
records submitted to the public body in charge of the public
improvement or any other information, and shall assess a
separate violation for each day worked by each worker on the
public improvement. Each decision of a separate violation
shall be listed in the notice of violation.
4. In determining that this chapter has been violated and
that the issuance of a notice of violation is required, the
commissioner shall base the decision on one or any combination
of the following reasons:
a. The severity of the violation, which includes the
following:
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(1) The amount of wages that are determined to be underpaid
pursuant to this chapter.
(2) The activity or conduct complained of that violates the
requirements of this chapter and was not merely a technical,
nonsubstantive error. Examples of a technical error include
but are not limited to a mathematical error, bookkeeping error,
transposition of numbers, or computer or programming error.
b. The nature and duration of the present violation and the
prior history of the contractor or subcontractor related to
this history. The prior history considered shall not exceed
seven years before the date of the notice of violation.
c. Whether the contractor or subcontractor submitted
certified payroll records with the public body in charge of the
public improvement; whether the contractor or subcontractor
has kept payroll records and accurate records for three years;
and whether the contractor or subcontractor produced certified
payroll records in accordance with section 91F.9.
d. Whether the contractor or subcontractor has violated any
other provision of this chapter.
5. The notices of the first, second, and subsequent
violations shall be sent by restricted certified mail,
addressed to the last known address of the contractor or
subcontractor involved. The notices shall contain a reference
to the specific provisions of this chapter alleged to have been
violated, identify the particular public improvement involved,
identify the conduct complained of, and identify whether the
notice is a notice of a first, second, or subsequent violation,
and include a contractor’s or subcontractor’s statement of
liabilities.
Sec. 14. NEW SECTION . 91F.12 Violations —— remedies and
penalties.
1. If the commissioner determines that a public body has
divided a public improvement into more than one contract for
the purpose of avoiding compliance with this chapter, the
commissioner shall issue an order compelling compliance. In
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making a determination whether a public body has divided a
public improvement into more than one contract for the purpose
of avoiding compliance with this chapter, the commissioner
shall consider all of the following:
a. The physical separation of the public improvement
structures or work.
b. The timing of the work on the public improvement phases
or structures.
c. The continuity of public improvement contractors and
subcontractors working on public improvement parts or phases.
d. The manner in which the public body and the contractor
and subcontractors administer and implement work on the public
improvement.
2. A worker employed by the contractor or subcontractor who
is paid less than the specified prevailing wage rate under this
chapter shall have a private right of action for the difference
between the amount so paid and the specified prevailing wage
rate, together with costs and reasonable attorney fees as shall
be allowed by the court.
3. The contractor or subcontractor shall additionally be
liable to the division for fifty percent of the amount of
underpayments and shall be additionally liable to the worker
for punitive damages in an amount equal to five percent of the
liability to the division for underpayments for each month
following the date of payment during which underpayments remain
unpaid, together with costs and reasonable attorney fees as
shall be allowed by the court.
4. If a second or subsequent action to recover underpayments
is brought against a contractor or subcontractor within a
three-year period and the contractor or subcontractor is
found liable for underpayments to a worker, the contractor or
subcontractor shall be liable to the division for seventy-five
percent of the amount of underpayments payable as a result of
the second or subsequent action, additionally liable to the
worker for ten percent of the amount of the liability to the
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division for underpayments for each month following the date
of payment during which the underpayments remain unpaid, and
further liable to the worker for triple the difference between
the amount so paid to the worker and the specified prevailing
wage rate required, together with costs and reasonable attorney
fees as shall be allowed by the court. The three-year period
begins to run from the date the contractor or subcontractor is
determined liable for the first violation.
5. The commissioner and any interested party shall also
have a right of action on behalf of a worker who has a right of
action under this chapter. An action brought to recover the
same shall be deemed to be a suit for wages, and all judgments
entered in the action shall have the same force and effect as
other judgments for wages. At the request of a worker employed
by a contractor or subcontractor who is paid less than the
prevailing wage rate required by this chapter, the commissioner
may take an assignment of the wage claim in trust for the
assigning worker and may bring any legal action necessary to
collect the claim, and the contractor or subcontractor shall
be required to pay the expenses of the division incurred in
collecting the claim.
6. In circumstances where a worker may not be available to
receive a payment or judgment, the payment due the worker shall
revert to the division after one year elapses from the time
payment was attempted to be made or judgment was rendered.
7. a. It is a violation of this chapter to do any of the
following:
(1) To request or demand, either before or after the worker
is engaged in a public improvement, that a worker pay back,
return, donate, contribute, or give any part or all of the
worker’s wages, salary, or thing of value, to any person, upon
the statement, representation, or understanding that failure to
comply with the request or demand will prevent the worker from
procuring or retaining employment.
(2) To directly or indirectly pay, request, or authorize any
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other person to violate this chapter.
b. This subsection does not apply to an agent or
representative of a duly constituted labor organization acting
in the collection of dues or assessments of the organization.
8. In addition to other penalties provided under this
chapter, whoever induces a worker working on a public
improvement subject to this chapter to give up or forego
any part of the prevailing wage rates to which the worker
is entitled under this chapter by threat not to employ
or by threat of dismissal from employment is guilty of a
serious misdemeanor. An agreement between the worker and the
contractor or subcontractor to work for less than the specified
prevailing wage rate shall not be a defense to criminal
prosecution.
9. a. A contract shall not be awarded by a public
body to a contractor or subcontractor who, on two separate
occasions within a three-year period, has been determined
to have violated this chapter, or to any firm, corporation,
partnership, or association in which the contractor or
subcontractor has any interest until five years have elapsed
from the date on which a final determination is rendered
finding the contractor or subcontractor in violation of this
chapter.
b. For the purposes of this subsection, “any interest” means
an interest in the entity bidding or performing work on the
public improvement, whether as an owner, partner, officer,
manager, employee, agent, consultant, or representative. “Any
interest” includes but is not limited to all instances where the
barred contractor or subcontractor receives payments, whether
cash or any other form of compensation, from any entity bidding
or performing work on the public improvement, or enters into
a contract with the entity bidding or performing work on the
public improvement for services performed or to be performed
under contract that have been or will be assigned or sublet,
or for vehicles, tools, equipment, or supplies that have been
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or will be sold, rented, or leased during the period from the
initiation of the barring proceedings until the end of the term
of the barring period. “Any interest” does not include shares
held in a publicly traded corporation if the shares were not
received as compensation after the barring of an entity bidding
or performing work on a public improvement.
10. If the division determines that a contractor or
subcontractor has violated this chapter on two separate
occasions within a three-year period, the division shall list
on the department of workforce development’s internet site and
keep on record the name of the contractor or subcontractor and
give notice by restricted certified mail of the list to any
public body requesting the list.
11. Upon a determination that a contractor or subcontractor
has violated this chapter on two separate occasions within a
three-year period, the division shall notify the violating
contractor or subcontractor by restricted certified mail. The
contractor or subcontractor has ten working days to request of
the division a hearing before an administrative law judge on
the alleged violation. Failure to respond within ten working
days shall result in automatic and immediate barring of the
violator from work as provided in subsection 9 and placement
and publication of the violator’s name on the department of
workforce development’s internet site as provided in subsection
10. If the contractor or subcontractor requests a hearing
within ten working days by restricted certified mail, the
department of inspections and appeals shall set a hearing
before an administrative law judge on the alleged violation.
The hearing shall take place no later than forty-five calendar
days after the receipt by the division of the request for a
hearing. An action by an administrative law judge constitutes
final agency action and is subject to judicial review under
section 17A.19.
12. The attorney general shall prosecute the cases
identified in this section upon complaint by the commissioner
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or by any interested person. In any proceeding brought
pursuant to this section, the commissioner shall be represented
by the attorney general.
13. This section does not give reason or provide cause for
an injunction to halt or delay any public improvement.
Sec. 15. NEW SECTION . 91F.13 Apprentices.
This chapter shall not prevent the employment of apprentices
upon public improvements. However, an apprentice employed
on a public improvement must be registered with the United
States department of labor’s office of apprenticeship under
an apprenticeship program registered with that office, paid
the proper wages specified in the standards of apprenticeship,
and engaged only in the trade to which the apprentice is
registered. If the apprentice is employed on a public
improvement in a trade to which the apprentice is not
registered with the United States department of labor’s office
of apprenticeship, the apprentice shall be treated as any other
worker under this chapter.
Sec. 16. IMPLEMENTATION OF ACT. Section 25B.2, subsection
3, shall not apply to this Act.
Sec. 17. EFFECTIVE DATE. This Act takes effect January 1,
2022.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
This bill requires a contractor to pay workers the same
hourly wage plus fringe benefits for a public improvement
costing more than $25,000 as prevails in the locality of the
public improvement. The bill allows the per-hour wage rate to
be based on what is normally paid in the area by contractors
for similar projects, and to be adjusted on a yearly basis by
the department of workforce development.
The wage rates that the workers must be paid shall also
include benefits such as medical care, life insurance, overtime
pay, and vacation and holiday pay. The bill applies to any
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public improvement that receives money from a public body and
includes most types of public improvements from construction to
road maintenance to painting to hauling.
The labor commissioner determines the wage rates for
specific geographical areas and for specific crafts,
classifications, and types of workers. This information must
be posted on the department of workforce development’s internet
site. In determining what the wage rate for a worker is, the
commissioner may consult collective bargaining agreements, wage
rate determinations for federal projects in the same area, and
other information the department may receive from contractors
who participate in an apprenticeship program approved by the
federal office of apprenticeship.
Any person affected by the wage rates has 15 days after the
department of workforce development has posted the wage rates
on its internet site to object in writing, stating the specific
reason for the objection, to the labor commissioner. The
commissioner must reconsider the determination being objected
to, and either affirm or modify it within 15 days of receiving
the objection.
If the commissioner declines to modify the determination,
within 10 days, the person affected may submit an objection in
writing to the division of labor services, stating the specific
reasons for the objection. A hearing must be set by the
department of inspections and appeals before an administrative
law judge within 45 days after the objection is filed. The
person who filed the objection must show the administrative
law judge that the wage rate was somehow made in error. The
division is required to show how it determined the wage
rate. The administrative law judge must make a decision about
the wage rate within 30 days and it is considered a final
determination.
The bill requires that contractors and subcontractors not
pay the workers less than the established wage rate but does
not prohibit them from paying the workers more than the wage
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rate. The wage rate must be paid without any deductions
such as for food, sleeping quarters, use of tools, or safety
equipment.
The bill also requires the public body to monitor the
contractors and subcontractors to ensure that the wage rate
is paid. A call for bids must state that the wage rate must
be included in the bids for the public improvement. All
bids shall list the specific wage rates for each craft,
classification, and type of worker needed for the public
improvement. All contractors and subcontractors are required
to sign a contract that states they will pay workers the wage
rate determined by the division. If the contractors and
subcontractors are found to not be paying the wage rate, the
contract states that the contractor’s or subcontractor’s right
to work on the public improvement and get paid for work already
done may be terminated.
Before the contractor or subcontractor receives the final
payment for the public improvement, the public body overseeing
the public improvement must certify the payments include proper
amounts due the workers, and the contractor or subcontractor
must swear under oath that the records are accurate.
The bill does not apply to public improvement projects
funded by the federal government that require federal
prevailing wage rates. However, unless a federal provision
applies, if a public improvement project is financed by both a
state public body and the federal government, then the higher
of the applicable wage rates shall be paid to the workers.
The bill also requires that contractors and subcontractors
keep detailed records for at least three years about the
workers, the rates paid, and the hours worked for each
public improvement. The records are public records and must
be available for inspection. However, workers’ personal
information is not available to the public for inspection.
During the public improvement, a contractor or subcontractor
must present a certified weekly payroll to demonstrate that
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the correct and full wage rate is being paid to workers. The
contractors and subcontractors must make all workers available
on-site to officials for interviews so that the records’
accuracy can be checked. Contractors and subcontractors must
also post the wage rates for each craft, classification, and
type of worker in a public place where workers can see the
posting or at the place where they receive their wages.
The commissioner is given specific powers for investigation,
enforcement, and penalization. The commissioner may sue to
prevent a contractor or subcontractor from being awarded
a contract for a public improvement when the wage rate
requirements have not been met. The commissioner is given the
power to withhold payments if a contractor or subcontractor
does not produce records upon request and to pay the workers
directly if the contractor or subcontractor continues to refuse
to provide records.
After receiving a complaint, the commissioner shall
investigate whether there has been a violation. If the
commissioner determines there has been a violation, the
contractor or subcontractor must be given notice of that
violation. The notice is a formal written statement from the
department of workforce development that states the specific
violation and the amount of money due as a penalty.
If a public body has divided up a public improvement to
avoid having to pay the wage rate, the commissioner shall order
compliance. A worker who is paid less than the wage rate set by
this law can sue for the difference in payment and collect the
difference along with costs and attorney fees in court.
The contractor or subcontractor shall also have to pay the
division 50 percent of the amount of underpayment and is liable
to the worker for punitive damages of up to 5 percent of the
underpayments for each month the underpayment remains unpaid
plus costs and attorney fees.
If a second or subsequent action for underpaying a worker
is brought against a contractor or subcontractor within a
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three-year period and the contractor or subcontractor is
liable, the contractor or subcontractor shall pay the division
75 percent of the amount of underpayment, is liable to the
worker for 10 percent of the penalty for underpayments for each
month following it that the underpayment remains unpaid, and
is liable to the worker for triple the difference between the
amount paid to the worker and the amount due under the wage
rate set by the commissioner plus costs and attorney fees.
The commissioner or any interested party has a right of
action on behalf of any individual who has a right of action
under the bill. The commissioner may file a lawsuit in trust
for a worker who assigns the claim and then bring legal action
to collect the claim. The contractor shall be required to pay
the expenses for collection of the claim.
The bill prohibits a person from requesting or demanding
that a worker pay back, return, donate, contribute, or give
any part or all of the worker’s wages, salary, or thing of
value, to any person who asserts that failure to comply with
the request or demand will prevent the worker from procuring
or retaining employment. The bill prohibits a person from
paying, requesting, or authorizing any other person to violate
the requirements of the bill. However, these provisions do
not apply to authorized labor organization representatives
collecting dues or assessments.
In addition to other penalties under the bill, anyone who
attempts to get a worker to give up any part of compensation
on a public improvement by threat not to hire or by threat of
firing is guilty of a serious misdemeanor. Any agreement to
work for less than the determined wage rate is not a defense to
criminal prosecution. A serious misdemeanor is punishable by
confinement for no more than one year and a fine of at least
$315 but not more than $1,875.
If a contractor or subcontractor has violated the bill twice
within a three-year period, the contractor or subcontractor
or any company or group associated with the contractor or
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subcontractor shall not be given any public improvement work
for five years. The department of workforce development
shall keep a list on its internet site of contractors and
subcontractors who have violated the bill twice within a
three-year period and notify public bodies by restricted
certified mail.
A contractor or subcontractor who has been notified of
the second violation has 10 days to request a hearing before
an administrative law judge. A hearing must be held within
45 days of the request. If no hearing is requested, the
contractor is barred from receiving public improvement work and
its name and information is posted on the department’s internet
site.
Apprentices employed on a public improvement project must
be registered with the federal office of apprenticeship.
Apprentices must receive the wages set out in the standards of
apprenticeship and do only the work specified in the trade to
which they are apprenticed. An apprentice not registered with
the federal program shall be paid the wage rate the same as any
other worker.
The bill may include a state mandate as defined in Code
section 25B.3. The bill makes inapplicable Code section 25B.2,
subsection 3, which would relieve a political subdivision from
complying with a state mandate if funding for the cost of
the state mandate is not provided or specified. Therefore,
political subdivisions are required to comply with any state
mandate included in the bill.
The bill takes effect January 1, 2022.
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