Despite broad support, prevailing wage reform may get sunk
By April Corbin Girnus | Originally posted on yahoo.com
Aerial view of construction at the Clark County School District JD Smith Middle School capital improvement/replacement project in 2019. (CCSD video)
A bill to boost the state’s ability to investigate and enforce prevailing wage violations has earned the support of both organized labor and industry groups, but it may still face an uphill battle in the Nevada State Legislature because it would fund new state positions at a time of fiscal uncertainty.
Assembly Bill 502 would restructure the Office of the Labor Commissioner to include a dedicated Public Works Compliance Division to investigate alleged violations of state prevailing wage laws, which set minimum wages for workers on publicly financed projects. The bill also adjusts the penalty structure and allows the office to help public bodies who are having difficulties monitoring compliance.
“We all agree that something needs to change,” Labor Commissioner Brett Harris told lawmakers earlier this month, referring to organized labor groups, the companies that hire them, and the executive branch agency.
The effort to improve the Labor Commissioner office stems from an interim legislative committee. Democratic Assemblymember Max Carter, who represents east Las Vegas, says he was asked to work on proposed legislation.
“I look at this as an industry bill,” he told the Nevada Current. “Not labor or management. It was joint.”
Contractor groups did testify in opposition to AB502 during its hearing in the Assembly Committee on Government Affairs on April 7 but lobbyists emphasized the concerns were relatively minor and could likely be addressed through a minor amendment to the bill.
Lobbyist Warren Hardy, representing the Associated Builders and Contractors of Nevada and Nevada Urban Consortium, called AB502 “the best good faith effort I’ve seen to get at the issues that are of concern.”
The bill was amended and passed out of the committee three days later, and Carter said he believes everyone is satisfied with the end result.
AB502 was referred to the Assembly Ways and Means Committee on Thursday because it comes with a fiscal impact — approximately $790,000 over the biennium, mostly to fund four new staff positions.
Gov. Joe Lombardo included that funding request in his recommended budget.
But many in Carson City expect the state’s revenue forecast to be adjusted downward come May 1 when the Economic Forum meets. If that happens, the state may be forced to “triage,” as Lombardo has put it, state resources and programs, making any request for additional funding much tougher.
Carter told the Current the uncertain revenue outlook feels “like a wet blanket over everything.”
Still, he said he remains “cautiously optimistic” that AB502 can find a path forward.
Labor groups have long said that wage violations are rampant across the state and that better enforcement is needed. In the case of prevailing wage, the public agency awarding the funds is supposed to monitor compliance but many don’t for one reason or another.
“If I go to a big box store and walk out with a set of golf clubs, it will be rapidly investigated, I will be found, prosecuted and punished in a very defined, timely manner,” Nevada State Pipe Trades lobbyist Greg Esposito told lawmakers during the bill hearing. “The people that you represent, wage earners, workers, they probably don’t even know who to call if they haven’t gotten paid properly. If their boss has decided ‘no, you didn’t really work 40 hours last week, you worked 20, and I dare you to say something about it.’”
In Fiscal Year 2024, the Labor Commissioner received 3,828 non-prevailing wage claims and 146 prevailing wage claims, in addition to other types of investigations they oversee. Only 62% of prevailing wage claims were resolved in 90 days, compared to 82% of general wage claims.
The current fiscal year doesn’t end until June 30, but Harris told the committee that as of March 27 her office had received 2,521 wage claims and 185 prevailing wage claims.
“What happens is, our wage and hour claims are so highly voluminous and so regulated that those kind of get priority,” Harris said, adding that public works claims are “more audit heavy” and “a lot denser in technicality” with more complex legal interpretations.
In Nevada, any public project with a contract price of $100,000 or greater that is wholly or partially funded by public dollars is subject to prevailing wage law. Rates for prevailing wage are set annually by the Nevada Office of the Labor Commissioner, which compares similar projects in the region.
Of the 185 wage claims received in the first nine months of the current fiscal year, only 32 were initiated by the public body; 153 were filled by a third party.
Jimmy Schwarz, an organizer with Ironworkers Local 433, said a complaint filed by the union led to members receiving $120,000 in back pay last year.
“Workers were performing iron work and paid as laborers,” he said. “That’s about a $20 an hour difference.”
Harris, who was appointed labor commissioner in 2022, told the Current last year she wanted the office to become more proactive on prevailing wage issues.
The Office of the Labor Commissioner currently has 26 full-time employees. Four of those positions were added last session as part of a 2023 bill that broadened apprenticeship mandates on public works projects.
Republican Assemblymember Rich DeLong asked the labor commissioner if the addition of four new positions this session would be enough considering their current and expected workload.
“The honest answer to that is probably not,” responded Harris. “Ideally, I think we’d want eight, but I also know we have to start somewhere.”
