Missouri lawmakers are rethinking prevailing-wage system

Missouri lawmakers are weighing two measures that have drawn strong criticism from organized labor.

One would change the way prevailing wages are calculated for government projects. The other would cut in half the number of state workers who investigate employers who may be violating child labor, overtime and wage laws.

While the two measures technically are unconnected, critics contend the move to cut state inspectors is actually an attempt to undermine prevailing-wage law.

“If you have a law but you don’t actually enforce it, that’s the way to get around their failure to get rid of prevailing wage legislatively,” said Senate Minority Leader Victor Callahan, an Independence Democrat.

If the staffing cuts go through, the Division of Labor Standards would have three investigators to police the entire state.

Republican lawmakers have unsuccessfully fought to rework the prevailing-wage system in Missouri for years, and the latest attempt was once again delayed by a Democratic-led filibuster on Wednesday.

Missouri’s prevailing-wage law establishes a minimum wage rate that must be paid to workers on public construction projects, such as bridges, roads and government buildings.

The prevailing-wage rate differs by county and for different types of work. For example, a carpenter in Jackson County must receive $36 an hour, plus benefits, while the same job in Nodaway County would only demand $29 an hour plus benefits.

But legislation sponsored by Senate President Pro Tem Rob Mayer would change the way the prevailing wage is calculated by basing it on the median hourly estimated wage in a county as determined by the U.S. Bureau of Labor Statistics.

Currently, the wage is based on surveys conducted by the Missouri Department of Labor for every county.

Mayer, a Dexter Republican, argued that the law is causing some public projects to be deferred.

“If we align the prevailing wage more with what the wages actually are in out-state counties, you’ll see a lot more public works construction going on,” Mayer said.

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The move to cut the number of labor investigators in half came during a debate over the state’s budget in the House.

Majority Leader Tim Jones, a Eureka Republican, argued that the department is overstaffed for the amount of work it must do. He sponsored an amendment shifting $160,000 out of labor and into the state’s public defenders’ system instead.

The amendment was part of the $24 billion budget the House sent to the Senate for consideration.

“I am very happy to cut some waste out of Department of Labor’s excessive inspector budget and send the money to our overwhelmed public defenders,” Jones said.

David Kendrick, an official with the Greater Kansas City Building and Construction Trades Council, called the move “completely irresponsible.”

“It’s just taking the cops off the beat,” Kendrick said. “If you don’t have anyone to enforce the law, people are going to stop abiding by the law.”

In 2011, investigators found 191 violations of child labor laws. The state recovered $1.1 million for workers resulting from prevailing-wage violations, and $97,000 for workers who had not been paid the legal minimum wage.

The possible loss of half the state’s wage inspectors came up repeatedly this week as thousands of labor supporters gathered for a rally at the Missouri Capitol.

Democratic Rep. Jacob Hummel of St. Louis slammed the move while addressing the crowd.

“They tell us those inspectors are not needed,” said Hummel, a member of the International Brotherhood of Electric Workers. “You know where they were needed? They were needed on a National Guard base outside of Springfield where a company was caught hiring 30 illegal immigrants on the job.”

Hummel was referring to an investigation of HTH Companies Inc., a Union, Mo.-based company.

But company CEO Greg Hoberock said Hummel’s allegations were wrong.

A spokeswoman for the Missouri Department of Labor said last year that the agency received a tip about possible violations at Hoberock’s company and sent investigatorse.

Hoberock, however, told The Star that his company isn’t in violation of any state labor laws and hasn’t been cited for anything. He said he has not heard from federal officials in at least six months on the issue of illegal immigrants.

“We cooperated fully with authorities,” he said, adding that the company uses the E-Verify database to determine whether his employees can work legally in the United States.

The state labor department could not be reached for comment Wednesday about the investigation.

Hoberock is a long-time critic of prevailing-wage laws who has donated thousands of dollars to Republican candidates and political committees over the last decade.

Since the state has been facing a budget shortfall, Hoberock said, he’s pleased that the House is considering cutbacks at the Labor Department.

“Public defenders have been underfunded for years,” he said. “We need to figure out what the fundamental responsibility of government is, and I would put public defenders and education far ahead of wage inspectors.”

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Hoberock traveled to Jefferson City this week for debate on Mayer’s prevailing-wage legislation. The bill would exempt counties that receive federal disaster assistance from the prevailing wage and would rework how the wage is calculated across the state, among other provisions.

“The current system is bad public policy,” Hoberock said. “I’ll keep beating my drum.”

As for the provision exempting disaster areas from the law, Mayer pointed at Joplin, insisting that high wages are slowing down progress on rebuilding the tornado-ravaged city.

“At the end of the day, there will be a good wage in place,” Mayer said. “Anyone who can make $22 to $25 an hour plus benefits, I don’t see that as being a bad wage.”

But Callahan argued that lower wages could hamper disaster recovery and result in substandard construction. He pointed to a study by the University of Missouri-Kansas City which concluded that repealing the prevailing wage would increase occupational injuries and their associated costs, as well as boost construction work done by out-of-state contractors.

“The people of Joplin have been through a horrific disaster, and they need to rebuild,” Callahan said. “Why would we want to pay them less or open the door to out-of-state contractors?”

Meanwhile, Callahan said he expects funding for the child labor law and wage investigators to be restored by the Senate, which is what happened last year after similar efforts to cut the division’s budget. The full state budget would then go to a conference committee to work out differences with the House version.

House Budget Chairman Ryan Silvey, a Kansas City Republican, would likely be a member of the conference committee. He was one of nine Republicans who voted against Jones’ amendment to eliminate the investigator positions.