Amendment ASA2-AB621

2023 - 2024 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 2, TO ASSEMBLY BILL 621

February 22, 2024 - Offered by Representative Neubauer.

AB621-ASA2,2,2 An Act to repeal 16.75 (1p), 16.855 (1p), 66.0901 (1) (ae), 66.0901 (1) (am), 66.0901 (6m), 66.0901 (6s), 84.54, 86.51, 111.04 (3) and 947.20; to consolidate, renumber and amend 111.04 (1) and (2); to amend 66.0129 (5), 66.0901 (6), 66.0903 (1) (c), 66.0903 (1) (f), 66.0903 (1) (j), 66.0903 (1m) (b), 103.005 (12) (a), 103.503 (1) (a), 103.503 (1) (e), 103.503 (2), 103.503 (3) (a) 2., 109.09 (1), 111.06 (1) (c), 111.06 (1) (e), 111.06 (1) (i), 111.322 (2m) (a), 111.322 (2m) (b) and 978.05 (6) (a); to repeal and recreate 66.0903 (1) (g) and 103.503 (1) (g); and to create 19.36 (12), 66.0903 (1) (a), (am), (b), (cm), (dr), (em), (hm) and (im), 66.0903 (2) to (12), 84.41 (3), 103.49, 103.50, 104.001 (4), 106.04, 111.01, 111.322 (2m) (c), 227.01 (13) (t), 229.682 (2), 229.8275 and 946.15 of the statutes; relating to: eliminating the right-to-work law, project labor agreements and public contracts, prevailing wage, granting rule-making authority, and providing a penalty.

Analysis by the Legislative Reference Bureau

Right-to-work repeal

The current right-to-work law prohibits a person from requiring, as a condition of obtaining or continuing employment, an individual to refrain or resign from membership in a labor organization, to become or remain a member of a labor organization, to pay dues or other charges to a labor organization, or to pay any other person an amount that is in place of dues or charges required of members of a labor organization. This bill repeals these prohibitions and the associated misdemeanor offense for violating the right-to-work law.

The bill explicitly provides that, when an all-union agreement is in effect, it is not an unfair labor practice to encourage or discourage membership in a labor organization or to deduct labor organization dues or assessments from an employee's earnings. The bill sets conditions under which an employer may enter into an all-union agreement. The bill also sets conditions for the continuation or termination of all-union agreements, including that, if the Wisconsin Employment Relations Commission determines there is reasonable ground to believe employees in an all-union agreement have changed their attitude about the agreement, WERC is required to conduct a referendum to determine whether the employees wish to continue the agreement. WERC is required to terminate an all-union agreement if it finds the union unreasonably refused to admit an employee into the union.

Project labor agreements

Under current law, the state and local units of government are prohibited from engaging in certain practices in letting bids for state procurement or public works contracts. Among these prohibitions, as established by 2017 Wisconsin Act 3, the state and local governments may not do any of the following in specifications for bids for the contracts: 1) require that a bidder enter into an agreement with a labor organization; 2) consider, when awarding a contract, whether a bidder has or has not entered into an agreement with a labor organization; or 3) require that a bidder enter into an agreement that requires that the bidder or bidder's employees become or remain members of a labor organization or pay any dues or fees to a labor organization. This bill repeals these bidding specification restrictions.

Prevailing wage

This bill requires that laborers, workers, mechanics, and truck drivers employed on the site of certain projects of public works be paid the prevailing wage and not be required or allowed to work a greater number of hours per day and per week than the prevailing hours of labor unless they are paid overtime for all hours worked in excess of the prevailing hours of labor. Projects subject to the bill include state and local projects of public works, including state highway projects, with exceptions including projects below certain cost thresholds, minor service or maintenance work, and certain residential projects. Under the bill, “prevailing wage rate” is defined as the hourly basic rate of pay, plus the hourly contribution for bona fide economic benefits, paid for a majority of the hours worked in a trade or occupation in the area in which the project is located, except that, if there is no rate at which a majority of those hours is paid, “prevailing wage rate” means the average hourly basic rate of pay, plus the average hourly contribution for bona fide economic benefits, paid for the highest-paid 51 percent of hours worked in a trade or occupation in the area. “Prevailing hours of labor" is defined as 10 hours per day and 40 hours per week, excluding weekends and holidays. The bill requires the Department of Workforce Development to conduct investigations and hold public hearings as necessary to define the trades or occupations that are commonly employed on projects that are subject to the prevailing wage law and to inform itself of the prevailing wage rates in all areas of the state for those trades or occupations, in order to determine the prevailing wage rate for each trade or occupation. The bill contains certain other provisions regarding the calculation of prevailing wage rates by DWD, including provisions allowing persons to request recalculations or reviews of the prevailing wage rates determined by DWD.

The bill requires contracts and notices for bids for projects subject to the bill to include and incorporate provisions ensuring compliance with the requirements. The bill also establishes a requirement that state agencies and local governments post prevailing wage rates and hours of labor in areas readily accessible to persons employed on the project or in sites regularly used for posting notices.

The bill makes a contractor that fails to pay the prevailing wage rate or overtime pay to an employee as required under the prevailing wage law liable to the affected employee for not only the amount of unpaid wages and overtime pay, but also for liquidated damages in an amount equal to 100 percent of the unpaid wages and overtime pay.

Finally, the bill includes, for both state and local projects of public works, provisions regarding coverage, compliance, enforcement, and penalties, including 1) requirements for affidavits to be filed by contractors affirming compliance with the prevailing wage law; 2) record retention requirements for contractors regarding wages paid to workers and provisions allowing for the inspection of those records by DWD; 3) liability and penalty provisions for certain violations, including criminal penalties; and 4) provisions prohibiting contracts from being awarded to persons who have failed to comply with the prevailing wage law.

Transportation projects

Under current law, for certain highway projects for which the Department of Transportation spends federal money, federal money must make up at least 70 percent of the funding for those projects. DOT is required to notify political subdivisions receiving aid for local projects whether the aid includes federal moneys and how those moneys must be spent. For certain projects that receive no federal money, DOT may not require political subdivisions to comply with any portion of DOT's facilities development manual other than design standards. Any local project funded with state funds under the surface transportation program or the local bridge program must be let through competitive bidding and by contract to the lowest responsible bidder. The bill repeals all of these requirements.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB621-ASA2,1 Section 1. 16.75 (1p) of the statutes is repealed.

AB621-ASA2,2 Section 2. 16.855 (1p) of the statutes is repealed.

AB621-ASA2,3 Section 3 . 19.36 (12) of the statutes is created to read:

AB621-ASA2,4,13 19.36 (12) Information relating to certain employees. Unless access is specifically authorized or required by statute, an authority may not provide access to a record prepared or provided by an employer performing work on a project to which s. 66.0903, 103.49, or 103.50 applies, or on which the employer is otherwise required to pay prevailing wages, if that record contains the name or other personally identifiable information relating to an employee of that employer, unless the employee authorizes the authority to provide access to that information. In this subsection, “personally identifiable information" does not include an employee's work classification, hours of work, or wage or benefit payments received for work on such a project.

AB621-ASA2,4 Section 4 . 66.0129 (5) of the statutes is amended to read:

AB621-ASA2,4,19 66.0129 (5) Bids for construction. The nonprofit corporation shall let all contracts exceeding $1,000 for the construction, maintenance or repair of hospital facilities to the lowest responsible bidder after advertising for bids by the publication of a class 2 notice under ch. 985. Section Sections 66.0901 applies and 66.0903 apply to bids and contracts under this subsection.

AB621-ASA2,5 Section 5. 66.0901 (1) (ae) of the statutes is repealed.

AB621-ASA2,6 Section 6. 66.0901 (1) (am) of the statutes is repealed.

AB621-ASA2,7 Section 7. 66.0901 (6) of the statutes is amended to read:

AB621-ASA2,5,12 66.0901 (6) Separation of contracts; classification of contractors. In public contracts for the construction, repair, remodeling or improvement of a public building or structure, other than highway structures and facilities, a municipality may bid projects based on a single or multiple division of the work. Public contracts shall be awarded according to the division of work selected for bidding. Except as provided in sub. (6m), the The municipality may set out in any public contract reasonable and lawful conditions as to the hours of labor, wages, residence, character and classification of workers to be employed by any contractor, classify contractors as to their financial responsibility, competency and ability to perform work and set up a classified list of contractors. The municipality may reject the bid of any person, if the person has not been classified for the kind or amount of work in the bid.

AB621-ASA2,8 Section 8. 66.0901 (6m) of the statutes is repealed.

AB621-ASA2,9 Section 9. 66.0901 (6s) of the statutes is repealed.

AB621-ASA2,10 Section 10 . 66.0903 (1) (a), (am), (b), (cm), (dr), (em), (hm) and (im) of the statutes are created to read:

AB621-ASA2,5,25 66.0903 (1) (a) “Area" means the county in which a proposed project of public works that is subject to this section is located or, if the department determines that there is insufficient wage data in that county, “area" means those counties that are contiguous to that county or, if the department determines that there is insufficient wage data in those counties, “area" means those counties that are contiguous to those counties or, if the department determines that there is insufficient wage data in those counties, “area" means the entire state or, if the department is requested to review a determination under sub. (3) (br), “area" means the city, village, or town in which a proposed project of public works that is subject to this section is located.

AB621-ASA2,6,1 (am) “Bona fide economic benefit" has the meaning given in s. 103.49 (1) (am).

AB621-ASA2,6,2 (b) “Department" means the department of workforce development.

AB621-ASA2,6,3 (cm) “Insufficient wage data" has the meaning given in s. 103.49 (1) (bg).

AB621-ASA2,6,11 (dr) “Minor service or maintenance work" means a project of public works that is limited to minor crack filling, chip or slurry sealing, or other minor pavement patching, not including overlays, that has a projected life span of no longer than 5 years or that is performed for a town and is not funded under s. 86.31, regardless of projected life span; the depositing of gravel on an existing gravel road applied solely to maintain the road; road shoulder maintenance; cleaning of drainage or sewer ditches or structures; or any other limited, minor work on public facilities or equipment that is routinely performed to prevent breakdown or deterioration.

AB621-ASA2,6,13 (em) “Multiple-trade project of public works" has the meaning given in s. 103.49 (1) (br).

AB621-ASA2,6,15 (hm) “Single-trade project of public works" has the meaning given in s. 103.49 (1) (em).

AB621-ASA2,6,17 (im) “Supply and installation contract" has the meaning given in s. 103.49 (1) (fm).

AB621-ASA2,11 Section 11 . 66.0903 (1) (c) of the statutes is amended to read:

AB621-ASA2,6,20 66.0903 (1) (c) “Hourly basic rate of pay" has the meaning given in s. 16.856 103.49 (1) (b), 2015 stats.

AB621-ASA2,12 Section 12 . 66.0903 (1) (f) of the statutes is amended to read:

AB621-ASA2,6,23 66.0903 (1) (f) “Prevailing hours of labor" has the meaning given in s. 16.856 103.49 (1) (e), 2015 stats. (c).

AB621-ASA2,13 Section 13 . 66.0903 (1) (g) of the statutes is repealed and recreated to read:

AB621-ASA2,7,2 66.0903 (1) (g) “Prevailing wage rate" has the meaning given in s. 103.49 (1) (d).

AB621-ASA2,14 Section 14 . 66.0903 (1) (j) of the statutes is amended to read:

AB621-ASA2,7,5 66.0903 (1) (j) “Truck driver" includes an owner-operator of a truck has the meaning given in s. 103.49 (1) (g).

AB621-ASA2,15 Section 15 . 66.0903 (1m) (b) of the statutes is amended to read:

AB621-ASA2,7,21 66.0903 (1m) (b) The legislature finds that the enactment of ordinances or other enactments by local governmental units requiring laborers, workers, mechanics, and truck drivers employed on projects of public works or on publicly funded private construction projects to be paid the prevailing wage rate and to be paid at least 1.5 times their hourly basic rate of pay for hours worked in excess of the prevailing hours of labor would be logically inconsistent with, would defeat the purpose of, and would go against the repeals spirit of this section and the repeal of s. 66.0904, 2009 stats., and s. 66.0903 (2) to (12), 2013 stats. Therefore, this section shall be construed as an enactment of statewide concern for the purposes of facilitating broader participation with respect to bidding on projects of public works, ensuring that wages accurately reflect market conditions, providing local governments with the flexibility to reduce costs on capital projects, and reducing spending at all levels of government in this state purpose of providing uniform prevailing wage rate and prevailing hours of labor requirements throughout the state.

AB621-ASA2,16 Section 16 . 66.0903 (2) to (12) of the statutes are created to read:

AB621-ASA2,7,25 66.0903 (2) Applicability. Subject to sub. (5), this section applies to any project of public works erected, constructed, repaired, remodeled, or demolished for a local governmental unit, including all of the following:

AB621-ASA2,8,1 (a) A highway, street, bridge, building, or other infrastructure project.

AB621-ASA2,8,5 (b) A project erected, constructed, repaired, remodeled, or demolished by one local governmental unit for another local governmental unit under a contract under s. 66.0301 (2), 83.03, 83.035, or 86.31 (2) (b) or under any other statute specifically authorizing cooperation between local governmental units.

AB621-ASA2,8,9 (c) A project in which the completed facility is leased, purchased, lease purchased, or otherwise acquired by, or dedicated to, a local governmental unit in lieu of the local governmental unit contracting for the erection, construction, repair, remodeling, or demolition of the facility.

AB621-ASA2,8,13 (d) A road, street, bridge, sanitary sewer, or water main project in which the completed road, street, bridge, sanitary sewer, or water main is acquired by, or dedicated to, a local governmental unit, including under s. 236.13 (2), for ownership or maintenance by the local governmental unit.

AB621-ASA2,8,25 (3) Prevailing wage rates and hours of labor. (am) A local governmental unit, before making a contract by direct negotiation or soliciting bids on a contract for the erection, construction, remodeling, repairing, or demolition of any project of public works, shall apply to the department to determine the prevailing wage rate for each trade or occupation required in the work contemplated. The department shall conduct investigations and hold public hearings as necessary to define the trades or occupations that are commonly employed on projects of public works that are subject to this section and to inform itself of the prevailing wage rates in all areas of the state for those trades or occupations, in order to determine the prevailing wage rate for each trade or occupation. The department shall issue its determination within 30 days after receiving the request and shall file the determination with the requesting local governmental unit.

AB621-ASA2,9,7 (ar) The department shall, by January 1 of each year, compile the prevailing wage rates for each trade or occupation in each area. The compilation shall, in addition to the current prevailing wage rates, include future prevailing wage rates when those prevailing wage rates can be determined for any trade or occupation in any area and shall specify the effective date of those future prevailing wage rates. If a project of public works extends into more than one area, the department shall determine only one standard of prevailing wage rates for the entire project.

AB621-ASA2,9,15 (av) In determining prevailing wage rates under par. (am) or (ar), the department may not use data from projects that are subject to this section, s. 103.49 or 103.50, or 40 USC 3142 unless the department determines that there is insufficient wage data in the area to determine those prevailing wage rates, in which case the department may use data from projects that are subject to this section, s. 103.49 or 103.50, or 40 USC 3142. In determining prevailing wage rates under par. (am) or (ar), the department may not use data from any construction work that is performed by a local governmental unit or a state agency.

AB621-ASA2,9,24 (bm) Any person may request a recalculation of any portion of an initial determination within 30 days after the initial determination date if the person submits evidence with the request showing that the prevailing wage rate for any given trade or occupation included in the initial determination does not represent the prevailing wage rate for that trade or occupation in the area. The evidence shall include wage rate information reflecting work performed by individuals working in the contested trade or occupation in the area during the current survey period. The department shall affirm or modify the initial determination within 15 days after the date on which the department receives the request for recalculation.

AB621-ASA2,10,14 (br) In addition to the recalculation under par. (bm), the local governmental unit that requested the determination under this subsection may request a review of any portion of a determination within 30 days after the date of issuance of the determination if the local governmental unit submits evidence with the request showing that the prevailing wage rate for any given trade or occupation included in the determination does not represent the prevailing wage rate for that trade or occupation in the city, village, or town in which the proposed project of public works is located. That evidence shall include wage rate information for the contested trade or occupation on at least 3 similar projects located in the city, village, or town where the proposed project of public works is located and on which some work has been performed during the current survey period and which were considered by the department in issuing its most recent compilation under par. (ar). The department shall affirm or modify the determination within 15 days after the date on which the department receives the request for review.

AB621-ASA2,11,2 (dm) A local governmental unit that is subject to this section shall include a reference to the prevailing wage rates determined by the department and to the prevailing hours of labor in the notice published for the purpose of securing bids for the project of public works. Except as otherwise provided in this paragraph, if any contract or subcontract for a project of public works is entered into, the prevailing wage rates determined by the department and the prevailing hours of labor shall be physically incorporated into and made a part of the contract or subcontract. For a minor subcontract, as determined by the department, the department shall prescribe by rule the method of notifying the minor subcontractor of the prevailing wage rates and prevailing hours of labor applicable to the minor subcontract. The prevailing wage rates and prevailing hours of labor applicable to a contract or subcontract may not be changed during the time that the contract or subcontract is in force.

AB621-ASA2,11,4 (e) No contractor, subcontractor, or contractor's or subcontractor's agent that is subject to this section may do any of the following:

AB621-ASA2,11,7 1. Pay an individual performing the work described in sub. (4) less than the prevailing wage rate in the same or most similar trade or occupation determined under this subsection.

AB621-ASA2,11,12 2. Allow an individual performing the work described in sub. (4) to work a greater number of hours per day or per week than the prevailing hours of labor, unless the contractor, subcontractor, or contractor's or subcontractor's agent pays the individual for all hours worked in excess of the prevailing hours of labor at a rate of at least 1.5 times the individual's hourly basic rate of pay.

AB621-ASA2,11,18 (4) Covered employees. (a) Subject to par. (b), any person subject to this section shall pay all of the following employees the prevailing wage rate determined under sub. (3) and may not allow such employees to work a greater number of hours per day or per week than the prevailing hours of labor, unless the person pays the employee for all hours worked in excess of the prevailing hours of labor at a rate of at least 1.5 times the employee's hourly basic rate of pay:

AB621-ASA2,11,20 1. All laborers, workers, mechanics, and truck drivers employed on the site of a project of public works that is subject to this section.

AB621-ASA2,12,2 2. All laborers, workers, mechanics, and truck drivers employed in the manufacturing or furnishing of materials, articles, supplies, or equipment on the site of a project of public works that is subject to this section or from a facility dedicated exclusively, or nearly so, to a project of public works that is subject to this section by a contractor, subcontractor, agent, or other person performing any work on the site of the project.

AB621-ASA2,12,10 (b) A laborer, worker, mechanic, or truck driver who is employed to process, manufacture, pick up, or deliver materials or products from a commercial establishment that has a fixed place of business from which the establishment supplies processed or manufactured materials or products or from a facility that is not dedicated exclusively, or nearly so, to a project of public works that is subject to this section is not entitled to receive the prevailing wage rate determined under sub. (3) or to receive at least 1.5 times his or her hourly basic rate of pay for all hours worked in excess of the prevailing hours of labor unless any of the following applies:

AB621-ASA2,12,15 1. The laborer, worker, mechanic, or truck driver is employed to go to the source of mineral aggregate such as sand, gravel, or stone and deliver that mineral aggregate to the site of a project of public works that is subject to this section by depositing the material directly in final place, from the transporting vehicle or through spreaders from the transporting vehicle.

AB621-ASA2,12,19 2. The laborer, worker, mechanic, or truck driver is employed to go to the site of a project of public works that is subject to this section, pick up excavated material or spoil from the site of the project, and transport that excavated material or spoil away from the site of the project.

AB621-ASA2,12,22 (c) A person subject to this section shall pay a truck driver who is an owner-operator of a truck separately for his or her work and for the use of his or her truck.

AB621-ASA2,12,23 (5) Nonapplicability. This section does not apply to any of the following:

AB621-ASA2,13,5 (a) A single-trade project of public works for which the estimated project cost of completion is less than $48,000, a multiple-trade project of public works for which the estimated project cost of completion is less than $100,000, or, in the case of a multiple-trade project of public works erected, constructed, repaired, remodeled, or demolished by a private contractor for a city or village having a population of less than 2,500 or for a town, a multiple-trade project of public works for which the estimated project cost of completion is less than $234,000.

AB621-ASA2,13,9 (b) Work performed on a project of public works for which the local governmental unit contracting for the project is not required to compensate any contractor, subcontractor, contractor's or subcontractor's agent, or individual for performing the work.

AB621-ASA2,13,11 (c) Minor service or maintenance work, warranty work, or work under a supply and installation contract.

AB621-ASA2,13,14 (f) A project of public works involving the erection, construction, repair, remodeling, or demolition of a residential property containing 2 dwelling units or less.

AB621-ASA2,13,20 (g) A road, street, bridge, sanitary sewer, or water main project that is a part of a development in which not less than 90 percent of the lots contain or will contain 2 dwelling units or less, as determined by the local governmental unit at the time of approval of the development, and that, on completion, is acquired by, or dedicated to, a local governmental unit, including under s. 236.13 (2), for ownership or maintenance by the local governmental unit.

AB621-ASA2,14,2 (8) Posting. A local governmental unit that has contracted for a project of public works shall post the prevailing wage rates determined by the department, the prevailing hours of labor, and the provisions of subs. (10) (a) and (11) (a) in at least one conspicuous place on the site of the project that is easily accessible by employees working on the project, or, if there is no common site on the project, at the place normally used by the local governmental unit to post public notices.

AB621-ASA2,14,11 (9) Compliance. (a) When the department finds that a local governmental unit has not requested a determination under sub. (3) (am) or that a local governmental unit, contractor, or subcontractor has not physically incorporated a determination into a contract or subcontract as required under this section or has not notified a minor subcontractor of a determination in the manner prescribed by the department by rule promulgated under sub. (3) (dm), the department shall notify the local governmental unit, contractor, or subcontractor of the noncompliance and shall file the determination with the local governmental unit, contractor, or subcontractor within 30 days after the notice.

AB621-ASA2,14,16 (b) Upon completion of a project of public works and before receiving final payment for his or her work on the project, each agent or subcontractor shall furnish the contractor with an affidavit stating that the agent or subcontractor has complied fully with the requirements of this section. A contractor may not authorize final payment until the affidavit is filed in proper form and order.

AB621-ASA2,15,6 (c) Upon completion of a project of public works and before receiving final payment for his or her work on the project, each contractor shall file with the local governmental unit authorizing the work an affidavit stating that the contractor has complied fully with the requirements of this section and that the contractor has received an affidavit under par. (b) from each of the contractor's agents and subcontractors. A local governmental unit may not authorize a final payment until the affidavit is filed in proper form and order. If a local governmental unit authorizes a final payment before an affidavit is filed in proper form and order or if the department determines, based on the greater weight of the credible evidence, that any person performing the work specified in sub. (4) has been or may have been paid less than the prevailing wage rate or less than 1.5 times the hourly basic rate of pay for all hours worked in excess of the prevailing hours of labor and requests that the local governmental unit withhold all or part of the final payment, but the local governmental unit fails to do so, the local governmental unit is liable for all back wages payable up to the amount of the final payment.

AB621-ASA2,15,12 (10) Records; inspection; enforcement. (a) Each contractor, subcontractor, or contractor's or subcontractor's agent that performs work on a project of public works that is subject to this section shall keep full and accurate records clearly indicating the name and trade or occupation of every individual performing the work described in sub. (4) and an accurate record of the number of hours worked by each of those individuals and the actual wages paid for the hours worked.

AB621-ASA2,15,21 (b) The department or the contracting local governmental unit may demand and examine, and every contractor, subcontractor, and contractor's or subcontractor's agent shall keep, and furnish upon request by the department or local governmental unit, copies of payrolls and other records and information relating to the wages paid to individuals performing the work described in sub. (4) for work to which this section applies. The department may inspect records in the manner provided in ch. 103. Every contractor, subcontractor, or agent performing work on a project of public works that is subject to this section is subject to the requirements of ch. 103 relating to the examination of records.