Indiana Senate panel considers changes to bill that would repeal state construction wages law

Economic Indicators Associated Press

Indiana lawmakers proposed changes Tuesday to a GOP-backed bill that would repeal the law that sets wages for public construction projects, though opponents say those efforts aren't enough to offset potential damage to the state's construction industry.

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Members of the Senate Tax and Fiscal Policy Committee are considering a measure to eliminate the decades-old Common Construction Wage Law, along with the local boards that set construction wages for state or local projects that cost more than $350,000.

Supporters of the repeal say these set wages are artificially high and hinder the competitive market from lowering bid prices, which would save taxpayers money on public projects.

Glenna Jehl, a Fort Wayne Community Schools board member, says local board members favor union workers and often come to meetings already knowing the vote outcome.

"I was kind of stunned when I went to the hearings and they turned around and voted for artificially higher wages, which when you have a limited pot, means that you're not going to get as much work done," Jehl said.

Opponents argue the change would hurt many Indiana-based companies by opening the door for low-paying, out-of-state contractors to underbid on projects.

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"I think we run the risk of taking away a level playing field," said William Mott, corporate vice president of labor relations at Hunt Construction Group in Indianapolis.

Mott said Indiana contractors will struggle to be competitive under an unregulated market, while also trying to pay workers proper salaries and maintain the high level of workforce training.

Committee Chairman Brandt Hershman, R-Lafayette, proposed an amendment Tuesday that he said helps to address concerns about potential out-of-state competition.

Changes would include establishing a mandatory E-Verify program to ensure that all workers are legally allowed to work within the country and requiring contractors with at least 10 employees to have an employee training program.

"We want to ensure that we have a well-trained workforce," Hershman said. "It leads to greater worker safety and we think that's important."

The amendment would also prohibit businesses from paying workers in cash, and require general contractors to perform at least 20 percent of the work on a project with their own employees, services or materials. This would prevent businesses from subcontracting entire projects out to a potentially cheaper workforce.

Contractors who violate these rules could face criminal charges or be temporarily suspended from bidding on future government projects.

Opponents said the changes were a step in the right direction but questioned why lawmakers were making rushed proposals on such a major issue that has a big impact on the construction industry.

Labor Committee Chairman Phil Boots, R-Crawfordsville, who would normally lead discussion on this type of measure, has said he wasn't in favor of taking up the proposal this session and believed a special committee should review the construction wages law.

But Republican Senate President Pro Tem David Long, who supports the measure, decided to assign it to the Tax and Fiscal Policy committee.

"This repeal could have severe unintended consequences," Mott said. "I don't think it's broke so I don't think we should fix it."

Hershman said lawmakers won't vote on the measure until next week to allow for further review.