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Kentucky Republicans Pass Right-To-Work, Dropping The Hammer On Unions
/0 Comments/in News /by IKORCCBy Dave Jamelson and Travis Waldron
01/07/2017 12:06 pm ET
Organized labor suffered its first major legislative setback due to the 2016 elections on Saturday, when Kentucky Republicans gave final approval to right-to-work legislation and repealed the state’s prevailing wage law. Both bills are expected to be signed into law by the governor, and will take effect immediately.
Kentucky is the last holdout in the South without an anti-union right-to-work law on the books. For decades, labor unions and Democrats fended off such measures, which diminish union membership and weaken the labor movement. But when Republicans captured the state House in November, they paved the way for passage of the legislation. The law will apply to all new labor contracts, but will not affect current agreements.
Unions and Democrats mounted a last-ditch effort to stop the legislation this week, holding protests at the state capitol building in Frankfort saying the bills would drive down wages. But Republicans now have overwhelming control of both the state Senate and the House. Kentucky’s governor, Matt Bevin, is a Republican who won office in 2015.
“They’re cutting workers’ pay,” Bill Finn, state director of the Kentucky State Building and Construction Trades Council, told The Huffington Post this week. “People voted for a change in this election, but they didn’t vote for this. They didn’t vote for pay cuts.”
Right-to-work laws forbid contracts that require all workers in a particular bargaining unit to pay fees to a union. Under U.S. labor law, a union must represent all employees in a unionized workplace, even those who may not want representation. Unions argue it’s only fair that all workers share the costs of bargaining and maintaining the union contract.
By allowing individual workers to opt out of paying union fees while benefiting from representation ― an arrangement unions call “free riding” ― right-to-work laws can drive down membership and weaken unions financially and politically. The conservatives who push right-to-work laws argue that they assure workers’ individual freedoms by not compelling anyone to support a union.
Labor leaders were equally troubled by the legislature’s move to gut the state’s prevailing wage law. Such laws require that employers pay certain minimum wages on work funded by public money. Backers of the laws say they help make sure companies accepting taxpayer dollars don’t drive down wages and working conditions. Opponents argue they inflate the cost of public works projects.
The repeal means prevailing wages will no longer apply to construction workers building schools and government buildings.
Charlie Essex, the financial secretary for Local 369 of the International Brotherhood of Electrical Workers in Louisville, called the measure “an attack on union people.” He estimated that the prevailing wage law applied to more than 30 percent of union construction work in Kentucky.
Backed by business lobbies, Republican lawmakers around the country have been aggressive in pushing right-to-work bills and prevailing wage repeals in recent years. When Democrats lose control of a statehouse chamber or the governor’s mansion, they are often powerless to stop them.
Long confined to the South and West, right-to-work proponents have recently made inroads elsewhere in the country, including even the industrial Midwest. Since 2012, Indiana, Michigan, Wisconsin and West Virginia have all gone right-to-work. Kentucky will be the 27th such state, making it more the norm than the exception around the country.
House Republicans strike down prevailing wage law
/0 Comments/in News /by IKORCCPublished 10:48 pm Wednesday, January 4, 2017
House Republicans passed a bill out of committee Wednesday striking down the prevailing-wage law, which requires workers be paid average benefits and wages on public construction projects.
For several years, a Democrat House majority had thwarted efforts by House and Senate Republicans to repeal the law.
Sen. Wil Schroder, R-Wilder, has sponsored a prevailing-wage bill for the last two years that would have exempted schools from paying prevailing wage on projects of $250,000 or more. The bill was defeated in previous House committee hearings when Democrats were in the majority.
Bill Finn, director of the Kentucky State Building and Construction Trades Council, told members of the House Standing Committee on Economic Development and Workforce Investment that there’s no cost increase to construction projects as a result of the existing prevailing-wage law.
Finn said the costs of paying skilled workers are offset by having the work completed by a more efficient and proficient workforce.
“When you invest in construction worker training … you get a better, more productive worker. Getting the job done right the first time, on time adds value for Kentucky,” Finn said. “The construction labor costs of a project make up about 23 percent of total construction costs. All of the wages — the way prevailing wage is determined — from previous projects the year before, the previous 12 months. It (repealing prevailing wage) is going to affect every construction worker.”
Finn said state workers will lose out on jobs to out-of-state workers who would be able to compete with different wage rates. Training programs would in turn suffer funding for construction workers raising safety concerns if out of state workers were able to compete for bids on projects not paying prevailing wage.
“Kentucky has already tried saving money by cutting wages and benefits of construction workers 35 years ago and exempted schools from paying prevailing wage. It didn’t work then and it won’t work now. Local construction workers on local projects is what we need for Kentucky contractors. A lot of working people voted for a change in this election, but they didn’t vote for this. They didn’t vote for a pay cut.”
House Republican leadership has made the bill one of its priorities as House Bill 3. The Republican majority passed the bill out of committee 16-8, despite Democrat opposition.
Kentucky Republicans Poised To Pass Right-To-Work Law, Delivering Blow To Unions
/0 Comments/in News /by IKORCCBy Travis Waldron and Dave Jaimeson
01/04/2017 03:58 pm ET
Kentucky Republicans opened 2017 by introducing a slate of anti-union bills in both chambers of the state legislature, including legislation that would make the state the last in the South to adopt a so-called “right-to-work” law.
Targeting unions has been a priority for the Kentucky GOP in past years, though Democratic control of the governor’s seat and state House kept right-to-work and other legislation from passing. But Gov. Matt Bevin (R) won election in 2015, and Republicans swept their way to their first majority in the state House in nearly a century in November, paving the way for an ambitious agenda with right-to-work at the top of the list.
The proposed right-to-work bills, the first of which a state House committee approved Wednesday after a brief hearing, would end requirements that employees pay fees to a union. These bills would gut Kentucky’s unions politically and hurt their workers, local labor officials said.
“First of all, when you pass right-to-work you’re racing to the bottom in terms of wages,” said Larry Clark, a retired union electrician and Louisville Democrat who served as speaker pro tempore in the Kentucky House before he stepped down in 2014. “Statistics show that there’s less per capita family income. Statistics show there’s less tax revenue because there’s less money spent.”
Under U.S. labor law, a union must represent all the employees in a workplace it has unionized, even those who may not want representation. Unions say it’s only fair that all the workers in the bargaining unit pay fees to the union to cover the costs of bargaining.
But right-to-work laws make such arrangements illegal, allowing workers to opt out of paying fees to a union that will nevertheless represent them ― a situation that unions derisively call “free riding.” Backers of right-to-work laws argue that no worker should be required to support a union, even if it bargains on his behalf.
By helping to erode union membership, right-to-work laws hurt unions financially and weaken them (and, by extension, Democrats) politically. Right-to-work laws used to be a hallmark of conservative states in the South and West, but they have spread rapidly in recent years, even in the industrial Midwest. Indiana, Michigan, Wisconsin and West Virginia have all gone right-to-work since 2012. West Virginia was the 26th state to pass such a law, marking a symbolic turning point for right-to-work proponents.
F. Vincent Vernuccio, the labor policy director at the Mackinac Center, a conservative think tank that supports right-to-work efforts, said he expects Kentucky Republicans to move quickly after their success in the November elections. Vernuccio said Missouri and New Hampshire could follow Kentucky this year.
“We may see up to 29 [states] before the spring,” Vernuccio said. “You’re definitely seeing a snowball effect, and more and more states are looking to give workers freedom.”
Kentucky, home to organized industrial plants for Ford and General Electric, among other companies, had held back the tide prior to last year’s elections. The state had nearly 200,000 union members in 2015, according to the Bureau of Labor Statistics. Counter to national trends, its share of workers represented by unions has risen in recent years. And ahead of a Wednesday committee hearing, critics of the legislation pointed to data which they said showed that Kentucky’s manufacturing sector had outperformed neighboring Indiana’s since Indiana approved a right-to-work law in 2012.
But now, union officials in Kentucky say the package of legislation introduced Tuesday amounts to an even stronger attack on unions than laws passed in other states.
The House right-to-work legislation, for instance, would prohibit public sector workers from striking, while similar legislation in the Senate would prevent private sector unions from devoting union dues to political causes like political action committees.
A separate bill in the House, meanwhile, would repeal Kentucky’s prevailing wage law that applies to state construction contracts. That bill also passed a House committee Wednesday afternoon.
“It’s devastating,” said Charlie Essex, the business manager and financial secretary for Local 369 of the International Brotherhood of Electrical Workers, based in Louisville. “It’s a blatant attack on union people.”
While right-to-work has been a contentious issue across states, leaders from Kentucky’s construction unions are just as concerned about the repeal of the prevailing wage laws, which apply to between 30 and 40 percent of union construction work in the state, Essex said.
Such laws require that companies bidding on public works projects pay certain minimum wages to the workers employed on the resulting jobs. Unions say the laws are crucial to prevent bidders from driving down wages in the local economy.
Republicans have in the past argued that prevailing wage laws lead to unnecessary cost increases under state contracts, a point that union leaders have disputed. In 2001, the Kentucky Legislative Research Commission examined a period when the state’s prevailing wage law did not apply in certain circumstances and “concluded that prevailing wage has no statistically significant effect on construction cost,” with some caveats.
Clark said that repealing the prevailing wage provisions ― which some studies have shown lead to higher-than-median wages for the Kentucky workers subject to them ― will have a detrimental effect on apprenticeship and job training programs that businesses and unions rely on. The combination of changes, labor leaders said, would also hurt workers’ wages.
“They’re cutting workers’ pay through right-to-work and prevailing wage in Kentucky. That’s what we’re doing,” said Bill Finn, state director of the Kentucky State Building and Construction Trades Council. “People voted for a change in this election, but they didn’t vote for this. They didn’t vote for pay cuts.”
More than 100 union members and activists gathered near the state Capitol on Wednesday, with plans to testify against the legislation in a last-ditch effort to stop it.
Labor Department Launches New Web Page on Worker Misclassification
/0 Comments/in News /by IKORCCby Scott Braddock on Wed, 12/28/2016 – 9:17am
Heading into the new year, the federal government is ramping up efforts to educate employees and employers about the harms caused by worker misclassification. It’s a problem we’ve documented extensively over the years on Construction Citizen.
Our readers know very well that worker misclassification happens when a business pretends its employees are “independent subcontractors” with the intent of avoiding payroll taxes and benefits like workers’ compensation insurance and – thanks to reduced labor costs – are able to submit lower bids for projects, undercutting law-abiding companies. Of course, there are many legitimate and legal uses of contract labor. The problem arises when businesses abuse the designation with the intent of skipping out on taxes and providing benefits for people being utilized as employees.
The Department of Labor this month launched a new webpage devoted to the topic. The site makes the case that worker misclassification negatively impacts everyone: Workers, employers, and all taxpayers who have to pick up the slack when unscrupulous employers shirk their responsibilities.
The site outlines various things misclassified workers miss out on like “minimum wage and overtime pay, protections from anti-discrimination and anti-retaliation laws, workers’ compensation if injured on the job, unemployment insurance, health and safety protections on the job, and employer-sponsored benefits.”
The Labor Department site also points out that even though there are some state efforts to crack down on the practice, it is already illegal.
“Businesses found to have misclassified their workers expose themselves to fines and liability for unpaid wages and unpaid taxes,” the page says. “Competitor businesses who misclassify gain an unfair advantage by unlawfully lowering their personnel costs (for example, by not paying all wages, providing benefits, or providing necessary safety equipment when they should).”
Meantime, “Governments lose revenue, which in turn hurts taxpayers and undermines the economy.”
The page also includes links to news releases, an administrator’s interpretation of the issue, a video explaining misclassification and other resources from the Wage and Hour Division of the department. You’ll also find industry-specific guidance, since misclassification is not solely a problem in construction, and whistleblower protections from the department’s Occupational Safety and Health Administration.
The Internal Revenue Service publication that describes that agency’s worker classification criteria for tax purposes is included on the site as well. It also highlights agreements the Labor Department has made with 35 states to collaborate on investigating worker status violations.
Opinion: How prevailing-wage laws help veterans
/0 Comments/in News /by IKORCCChicago Sun Times
OPINION 12/08/2016, 06:51pm
Mike Pounovich and Marc Poulos
In about six weeks, President-elect Donald Trump and the two houses of Congress will own responsibility for delivering on some big promises.
Two featured repeatedly in his campaign were fixing our infrastructure and “taking care of vets” who are being treated “horribly.”
These two issues are not as disconnected as you might think
Veterans work in construction at higher rates than non-veterans. And the military invests heavily in training for these types of jobs — providing 22 percent of all skilled trade apprenticeships in the country today.
Research and our own experience inside the industry shows that the key policy driving many veterans and others into these middle-class construction careers is prevailing wage laws — the minimum wage for skilled construction work. Prevailing wage laws not only make veterans more likely to pursue a career in the trades, they also reduce the likelihood of a veteran in construction living in poverty by as much as 30 percent. They promote higher workmanship, safety, and efficiency standards on public construction projects. And by virtue of providing more working families with money to spend in their communities, they are proven to boost job creation across all sectors of the economy.
While these laws were created by Republicans and have long enjoyed broad bipartisan support, many in President-elect Trump’s party are calling for their repeal. Vice President-elect Mike Pence repealed Indiana’s prevailing wage in 2015, and Illinois Gov. Bruce Rauner has gone so far as to hold the entire state budget hostage over a similar demand.
Now, after many blue-collar construction workers helped deliver the White House to Trump over his promise to immediately rebuild our nation’s outdated infrastructure, the question is what will happen to the national prevailing wage law (Davis-Bacon) that’s ensured these projects are done right for 85 years.
On the campaign trail, Trump famously said, “Every policy decision must pass a simple test: Does it create more jobs and better wages for Americans?” Most of the peer-reviewed evidence tells us that repealing prevailing wage laws fails this test spectacularly, and worse, would disproportionately hurt the hundreds of thousands of military veterans working in the construction industry today.
The beneficiaries would not be veterans or working Americans — but the wealthy “low road” contractors who have long supported anti-prevailing wage politicians like Pence, Rauner and Wisconsin Gov. Scott Walker. These special interests aren’t buying politicians because they are planning to send taxpayers a rebate check. Instead, because they know a race to the bottom on safety, wages, and craftsmanship translates to less competition and higher profits for them.
Trump surely knows prevailing wage laws have almost no impact on total project costs, since construction labor only represents about 20 percent of the average project budget.
These laws also make a huge difference for taxpayers who rely on quality roads, water systems, schools and bridges that are built correctly.
How Donald Trump’s infrastructure proposal balances the more extreme elements in his party with his promise to rebuild America’s infrastructure in a way that creates “more jobs and better wages for Americans” will help define his presidency.
Either he will keep faith with the working people and veterans he claims to represent, or he will game the system for low road special interests.
Mike Pounovich is an equipment operator and a former specialist in the U.S. Army Reserves who spent 12 months in Iraq building roads, bridges and other critical infrastructure.
Marc Poulos is the executive director and counsel of the Indiana, Illinois and Iowa Foundation for Fair Contracting, as well as a board member of the National Alliance for Fair Contracting and the Illinois Prevailing Wage Council.