Prevailing wage upheld--and challenged

Whether you`re for or against the prevailing wage, two developments in Illinois and Minnesota bear watching.

--Catherine Varmazis

Whether you`re for or against the prevailing wage, two developments in Illinois and Minnesota bear watching.

Last September, the Illinois Department of Labor created a prevailing wage classification for communications technicians, meaning that all communications workers, whether or not they belong to a union, will be paid the same wage as members of the International Brotherhood of Electrical Workers (ibew) Local 292.

"This is good for low-voltage contractors," says Chuck Wilson, executive director of the National Systems Contractors Association (Cedar Rapids, IA). When non-union contractors work on jobs that pay the prevailing wage, they have to add to their employees` pay to bring it up to the prevailing wage for the duration of the project. The ruling "simplifies the way we do business," says Wilson. "You don`t have to pay people extra on this job but not on the other, or do extra paperwork."

Constitutional challenge

In Minnesota, the prevailing wage is at the center of a legal battle against a law passed by the state legislature in the spring of 1997. The law ruled that all school districts, whether or not they received state funds, had to pay according to the prevailing wage on projects of $100,000 or more. The Monticello School District was in the midst of getting bids for a $30-million high-school remodeling contract, which included a technology component. "The law changed our bidding pro-cess," says Kent Baldry, superintendent of schools in Monticello. "It would cost us 4% to 6% more to go with the prevailing wage. In some other districts, the estimates were as high as 9%. That`s a considerable amount of money for some folks."

The Monticello School District joined the Minnesota chapter of the Associated Builders and Contractors (Eden Prairie, MN) in a lawsuit against the state. They argued that the prevailing-wage law had been passed in violation of the state constitution`s "single-subject rule," which mandates that each piece of legislation must deal with a single subject. The prevailing-wage law had been passed as part of a larger, omnibus tax bill.

Last June, Judge M. Michael Monahan of the Ramsey County District Court overturned the law, ruling that it was unconstitutional. The ruling is being appealed by the state attorney general, with the ibew and other parties named as intervenors.

Not everyone believes the prevailing wage is the focus of the legal challenge. "It doesn`t have much to do with the prevailing-wage law," says assistant attorney general Susan Gretz. This sentiment is shared by Richard Miller, of Miller, O`Brien, and Bloom (Minneapolis, MN), legal counsel to the ibew: "The prevailing-wage law is being used as the whipping boy for a constitutional challenge," he says. "We`re interested in the case for two reasons: We believe the prevailing-wage law is good, and we`re interested in the legislative process....The question before the court of appeals is, `To what extent should the courts interfere with the legislative process?` "

Douglas Seaton, of Burk, Seaton, and Castle (Minneapolis, MN), legal counsel to the plaintiffs, explains that the law that was overturned last June applied only to projects that were purely locally funded. It did not affect state projects or those funded by other local governmental units, all of which continue to pay according to the prevailing wage.

At press time, the appeals process was under way. "Ultimately," predicts Seaton, "the state supreme court will probably hear this case. The issues before the court will be whether or not the legislative process will be open and above-board and legislators held accountable for their votes."

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