Updated wages at center of Vt. debate (Burlington Free Press)

By Terri Hallenbeck
Free Press Staff Writer

MONTPELIER — An ironworker hired for a federally funded highway construction job in Washington County has to be paid at least $36.69 an hour.
The same ironworker on a job in Chittenden County could be paid just $10.24 an hour, according to figures set by the federal government.

Inequities such as that prompted legislators, in the final hours of the 2009 session, to require contractors to pay the most updated wages for projects receiving federal stimulus money if the rates in a county are three or more years out of date.

“How have we stimulated the economy when we’ve provided minimum wage jobs with no benefits?” said Sen. Vince Illuzzi, R-Essex/Orleans, who pushed for the legislation, arguing that some of those workers are paid so poorly they have to turn to the state’s social services network for help.

However, the Douglas administration, which argued against the legislation, has not enacted the change, instead seeking an opinion from the Attorney General’s Office on its legality.

This week, the Attorney General’s Office stood behind the legislation, essentially telling the Douglas administration to do what the Legislature said.
“Our conclusion is that the Vermont Legislature may set wages for (federal stimulus) projects that are higher than those set by the U.S. Department of Labor,” Attorney General William Sorrell in a letter outlining the opinion to trade unions that had appealed to him for help.

As long as the state doesn’t order contractors to pay less than the established wage for a given county, it should be fine, Assistant Attorney General Jacob Humbert said in a memo to state officials.

He acknowledged, however, that working out the details will not be easy.

“It will require review and analysis of a variety of wage determinations before the minimum acceptable wages for any particular project can be set,” Humbert said in the memo.
The U.S. Department of Labor under the Davis-Bacon Act sets wages that a contractor must pay for any project that receives $2,000 or more in federal funding.

The wage for a highway ironworker is more than three times higher in Washington County than in Chittenden, even though Chittenden has the state’s largest population and a higher cost of living. The Chittenden wage was established in 1999; the Washington wage in 2005.

For some other construction job titles, however, the Chittenden wage is more up-to-date than other counties’. A building carpenter has to be paid $21.31 an hour in Chittenden, but $15.22 in Washington. Both of those wages appear to have been updated in 2009.

Vermont’s congressional delegation has complained to the U.S. Department of Labor about the lack of attention to updating the wages.
Sen. Bernie Sanders, I-Vt., said research done at his request showed that 76 percent of the wage rates had not been updated in the past three years, nearly half not in the past 10 years.

“We have also learned that nearly 30 percent of the wages fall below Vermont’s minimum wage,” Sanders said in a letter to Sorrell, encouraging him to support the state legislation.

Vermont’s minimum wage is $8.06 an hour. The Davis-Bacon wage for a flagger in Chittenden County is $7 an hour.

Sanders said he has met with Labor Secretary Hilda Solis on the issue and expects some action soon. In the meantime, Sanders said, the state legislation is a start.

“I’m glad that the attorney general upheld the state law that says construction companies in Vermont need to pay the most up-to-date prevailing wage,” Sanders said. “Construction workers have a right to earn a fair wage for their labor.”

Though the legislation will boost the minimum required pay for some projects, it’s unclear how much impact it will have on the actual wages that contractors pay.

Many already pay more than the federal requirement, Vermont Labor Commissioner Pat Moulton Powden said.

Ernie Smalley, who owns Smalley Contractors in Rutland, said most of the wages are so outdated, companies pay more than required. “We’re all way ahead of that,” he said.

On a recent stimulus-funded job to replace the Bridge Street Bridge in Richmond, T. Buck Construction Co. of Auburn, Maine, paid general laborers in the range of $16 to $19 an hour. That’s more than the federal requirement for either Chittenden or Washington County.

The Davis-Bacon wage for Chittenden County for that title is $8.33 an hour. In Washington County, the rate is $12.02.

Michael Morelli, business agent for Ironworkers Local 7, which pushed for the legislation, said he believes it will bring higher wages for some stimulus-funded projects that will be put to bid soon. “It’s going to definitely make a big impact,” he said.

Morelli contended that companies misclassify workers to get away with paying less — listing someone as a general laborer rather than a specialist. A state task force is in the midst of exploring that issue and seeking more effective ways to monitor job classification and punish offending employers.

Powden said misclassification issue appeared to be what legislators were trying to tackle, but this new law will not solve that problem.

Illuzzi, who as chairman of the Senate Economic Development, Housing and General Affairs Committee worked on the legislation, said he’s frustrated that the administration has resisted the change, losing two prime months of the construction season in the process.
“I think they’re just stalling,” he said. “It’s very disappointing.”

Powden said among the concerns are that the change would add to cumbersome paperwork for companies and the state. “That’s likely going to drive up the cost of contracts,” she said.
The administration was also concerned whether it would be improperly pre-empting federal law, said Jeff Lively, general counsel for the state Department of Buildings and General Services. The attorney general’s opinion appears to have settled that issue, but Lively said logistical concerns remain.

Determining whether a wage rate has been updated is among them, he said. The federal government might have reviewed the wage recently and decided not to change it, he said, or it might be unclear which county has the most updated rate.

“What if three counties update at the same time?” he said. Which one do we pick?”

Those kind of details will be discussed at a meeting next week of the misclassification task force.

Smalley, who is on that panel, said to remain competitive contractors need to know the wage they have to pay when they are bidding for a job. He wants to be sure that the required wages are stated upfront in the bid solicitation paperwork.