SENATE BILL REPORT
HB 1743
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
As Reported by Senate Committee On:
Labor & Commerce, March 18, 2019
Title: An act relating to the methodology for establishing the prevailing rate of wages for the construction of affordable housing, homeless and domestic violence shelters, and low-income weatherization and home rehabilitation public works.
Brief Description: Addressing the methodology for establishing the prevailing rate of wages for the construction of affordable housing, homeless and domestic violence shelters, and low-income weatherization and home rehabilitation public works.
Sponsors: Representatives Ormsby, Sells, Appleton, Fey, Tharinger and Kloba.
Brief History: Passed House: 3/01/19, 95-0.
Committee Activity: Labor & Commerce: 3/14/19, 3/18/19 [DPA].
Brief Summary of Amended Bill |
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SENATE COMMITTEE ON LABOR & COMMERCE |
Majority Report: Do pass as amended.
Signed by Senators Keiser, Chair; Conway, Vice Chair; King, Ranking Member; Saldaña, Walsh and Wellman.
Staff: Jarrett Sacks (786-7448)
Background: State law requires prevailing wages be paid to laborers, workers, and mechanics employed upon all public works and under all public building service maintenance contracts. Public works means all work, construction, alteration, repair, or improvement other than ordinary maintenance that is executed at the cost of the state or any municipality. The prevailing wage is the hourly wage, usual benefits, and overtime paid in the largest city in each county, to the majority of workers, laborers, or mechanics in the same trade or occupation.
Prior to 2018, the industrial statistician at the Department of Labor and Industries conducted wage and hour surveys to establish prevailing wages. In 2018, the Legislature changed the method for determining the prevailing wage. The industrial statistician establishes the prevailing wage by adopting the hourly wage, usual benefits, and overtime established in collective bargaining agreements for those trades and occupations that have collective bargaining agreements. For trades and occupations with more than one collective bargaining agreement in the county, the higher rate is used. For trades and occupations with no collective bargaining agreements in the county, the industrial statistician must conduct wage and hour surveys to establish the prevailing wage. If a survey is not feasible, the industrial statistician may employ other appropriate methods.
For some trades, a separate prevailing wage rate is established for commercial and residential construction. If a separately bargained residential rate for a particular trade exists, the industrial statistician adopts this rate for residential construction. Otherwise, the rate for the particular trade applies to both commercial and residential construction.
Summary of Amended Bill: For residential construction, the industrial statistician must establish the prevailing wage by conducting wage and hour surveys. The industrial statistician must conduct initial surveys as soon as feasible and must conduct wage and hour surveys for the relevant trades at least every five years. If the industrial statistician determines that information received from a survey is insufficient, they may employ other appropriate methods to establish the prevailing wage.
Residential construction means construction, alteration, repair, improvement, or maintenance on single-family dwellings, duplexes, apartments, condominiums, and other residential structures not to exceed four stories, including the basement, in the following categories:
affordable housing;
weatherization and home rehabilitation programs for low-income households; and
homeless shelters and domestic violence shelters.
Before the initial survey, prevailing wages for residential construction must be determined by calculating the percentage change in the annual average hourly construction worker wages since the prevailing wage for that trade was last adjusted, adding that percentage change to 100 percent, and multiplying that percentage to the rate in effect prior to the 2018 rate adjustments.
The industrial statistician must publish the wage rates within 30 days after the effective date of the bill, and the wage rates take effect 30 days after publication.
EFFECT OF LABOR & COMMERCE COMMITTEE AMENDMENT(S): The formula for calculating interim prevailing wage rates is changed to adding the percentage change in annual hourly construction worker wages to 100 percent and then multiplying that percentage to the prevailing wage rate in effect prior to the 2018 rate adjustments.
Appropriation: None.
Fiscal Note: Available.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: The bill contains an emergency clause and takes effect immediately.
Staff Summary of Public Testimony on House Bill: The committee recommended a different version of the bill than what was heard. PRO: This bill stems from a bill that passed last year to simplify the way prevailing wage is calculated. That bill had unintended consequences for low-income housing and other areas that rely on residential prevailing wage rates. This bill is designed to fix the unintended consequences.
Persons Testifying: PRO: Representative Timm Ormsby, Prime Sponsor; Mark Riker, Washington State Building and Construction Trades Council; Andrew Calkins, King County Housing Authority and Association of Washington Housing Authorities; Michele Thomas, Washington Low Income Housing Alliance.
Persons Signed In To Testify But Not Testifying: No one.