The bill (HF1984/SF1919) is termed a “Responsible Contractor” bill, and seeks to prohibit companies from working on government construction projects if they have had have had even minor, accidental or rectified violations of certain statutes in the past.
The big construction unions are pushing this legislation to allow government to reject contracts from certain companies who have paid back-wages of $10,000 or more in the past three years, even if the back-payments were completely voluntary.
The need to make back-payments can occur through accounting errors (in mid-to-large firms, $10,000 can easily be attributed to rounding errors), work classification confusion and other complex compliance issues or labor disputes. Under the new law if a company voluntarily makes back-payments of $10,000 or more over a three-year span, they can be banned from public work for five years.
The reality is, this legislation is an attempt to hamper non-union and smaller competitors.
More regulation and paperwork doesn’t usually impact larger firms, but it can be prohibitive to smaller competitors and the big companies know this.
This legislation was developed by the unions in a misguided effort to close out certain non-union companies from government contracts, but it may come back to bite some unionized companies as well.
Any company that does significant public work can be thrown out for relatively small errors, even if voluntarily rectified.
This is ill-considered legislation. It’s bad for Minnesota businesses, bad for taxpayers and bad for jobs.
Please write your legislators today and ask them to oppose HF1984 and SF1919. This legislation will increase the cost of government and harm responsible contracting businesses in Minnesota.