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| Montana Administrative Register Notice 24-17-238 | No. 3 02/11/2010 | |
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BEFORE THE DEPARTMENT OF LABOR AND INDUSTRY STATE OF
TO: All Concerned Persons 1. On October 29, 2009, the Department of Labor and Industry published MAR Notice No. 24-17-238 regarding the public hearing on the amendment of the above-stated rule on page 1840 of the 2009 Montana Administrative Register, issue no. 20. 2. On November 23, 2009 a public hearing was held at which time members of the public made oral and written comments and submitted documents. Additional comments were received during the comment period. 3. The department has thoroughly considered the comments and testimony received from the public. The following is a summary of the public comments received and the department's response to those comments: Comment 1: Keith Allen, IBEW Local 233, stated that in the Heavy Construction rates Toole County should be set at the same rates as specified in the federal Davis-Bacon Act ruling ELEC0233-001 06/01/2009, because Toole County had been inadvertently omitted from inclusion in that ruling. Response 1: The department acknowledges that there appears to be a clear oversight in the federal rate that the department had relied upon, and that Comment 2: Keith Allen, IBEW Local 233, stated that the data for work done on wind towers should be included in setting the building construction rates. The commenter stated that in ARM 24.17.501(2)(a) power plants are included in the definition of building construction. The commenter believes the department is confusing the statute that specifies wage rates to be paid for an alternative energy project so it can be classified as Class 14 property taxes with the administrative rule that defines what type of work that should be used to set rates for building construction classifications. Response 2: Heavy rates reported on building construction projects are included in the rate setting process. The fact that a project is classified as a Class 14 property tax, and that the wage rates paid on that project are heavy does not alone exclude the data from being used by the department. Data must be from a commercial, governmental, or industrial building construction project to be considered for use in setting the building construction rates. ARM 24.17.501(2)(a) lists a "power plant" as an example of building construction. A power plant is considered to be an industrial facility that generates electricity. These include steam electric stations (nuclear boiling water reactors), hydroelectric dams, CHP plants, coal plants and wind farms. A hydroelectric dam is considered to be a power plant. However, the dam itself is a heavy construction project. Buildings built incidental to the dam, i.e., control buildings, visitor centers, etc., would meet the building construction criteria. Data for buildings constructed on wind farms, i.e., maintenance or administrative buildings, meet the criteria to be included in the building construction rates. The wind turbines' structures themselves do not. ARM 24.17.501(2) states: "Building construction projects generally are the constructions of sheltered enclosures with walk-in access for housing persons, machinery, equipment, or supplies." A wind turbine is not built with the purpose to house any of the above. It is built to produce wind energy. The door on the side of the wind turbine is for mechanics to enter when the turbine needs repair. The department concludes that it corrected excluded data on the construction of wind turbines for building construction. Comment 3: Keith Allen, IBEW Local 233, submitted letters by employers giving the department permission to use the data submitted by the IBEW in place of the employer's data. Response 3: The data has been incorporated into the rate setting process as provided for in ARM 24.17.121. Revised rates are listed in paragraph 5. Comment 4: Randy Sobeck, IUOE Local 400, requested review of the rates for several Groups of Construction Equipment Operators. The commenter requested review of the wage and benefit for Group 2 in district 5 in the Building Construction publication. In the Heavy Construction publication, the commenter stated the benefit of $5.76 and $2.50 in districts 5 and 6 respectively for Group 3 were incorrect. Response 4: The department has reviewed the rates requested. The wage and benefit set in the building construction rates for Group 2 were set correctly in accordance with ARM 24.17.121. The commenter stated the benefit of $5.76 and $2.50 in districts 5 and 6 respectively for Group 3 were in the Heavy Construction publication and incorrect. Those rates were actually in the Building Construction publication and were set in accordance with ARM 24.17.121. Comment 5: Jim Ryan, SMACNA Local 103, provided data and requested review of the wages for Heating and Air Conditioning in district 8, the benefits for Sheet Metal Worker in districts 1 and 3, and the wages and benefits for Sheet Metal Worker in districts 6 and 8. Response 5: In reviewing the rates requested, the department found that the collective bargaining agreement submitted to the department was not in place during the reference period in which the department was gathering data. The department incorporated the correct CBA and the revised rates for Heat and Air Conditioning and Sheet Metal Worker are noted in paragraph 5.
Comment 6: Mary Alice-McMurray, PNWRCC, requested the wage in district 8 for Carpenters be reviewed. The commenter believes some of the data that was not included met the criteria of building construction, and should be included. Response 6: The original data submitted to the department for district 8 did not meet the criteria of building construction. In an e-mail sent to the department, Bob Bloom, PNWRCC Local #1172, submitted additional data for Carpenters in district 8. The department has reviewed and incorporated the data submitted. The corrections are noted in paragraph 5. Comment 7: Carey Hegreberg, Montana Contractors Association, voiced concern over the consistency of how prevailing wages are handled, in particular with regards to fringe benefits, across trades and districts. Commenter presented testimony that the MCA has 75 employers that contribute to a healthcare and retirement trust. These companies pay exactly the same premium to the healthcare and retirement trust for every worker regardless of classification or where work is done. The commenter states any contractor that is in a position to bid sizeable state and local projects, provide health insurance and retirement to all of their employees, and that this package costs a minimum of $6.00. Specific examples of large disparities in benefits were Glaziers and Groups 3 Operators. The benefit for Glaziers is $0.70 in district 5 and $8.20 in district 3. The benefit for Group 3 Operators in district 6 is $2.50 and $9.05 everywhere else. Additionally, the commenter is concerned that benefit rates in district 6 are too low across the board, and that contractors working on public facilities would be bidding on a benefit package significantly less than what they are actually paying, and would have to eat that cost if they wanted to compete. Response 7: The survey is driven by the number of responses received and the value of those responses. Although persons having information regarding wages and related information have a duty (imposed by rule) to provide that information to the department, the survey is voluntary, in that there is no penalty for not responding to the survey. As such, the responses are skewed in that they reflect information about wages paid by employers who see a value in responding to the survey. The department acknowledges the voluntary nature of the survey and the bias inherent with this type of survey, coupled with the fact that there is no penalty for reporting skewed, incomplete, or untrue data presents a barrier to accuracy that the department is committed to improving. The department's intention is to get a snap shot of the wages, benefits, and travel/per diem a contractor pays during the month the contractor employs the most workers. The department asks for "all commercial, industrial, or government work performed in Comment 8: Aaron Golik, Century Companies Inc., requested that the dispatch points in Lewistown, Havre, and Response 8: The department sets the rates for heavy and highway construction pursuant to 18-2-414, MCA, and currently incorporates federal rates by reference. The department notes that the prevailing wage rates to be paid on a project are only a minimum (a floor amount) and recognizes that contractors may pick the higher of two rates to avoid any confusion staying in compliance paying prevailing wages. Comment 9: Janet Cook, aBCc Erectors, Inc., stated that they did not receive a survey form and would like to have their data be considered in the rate setting process. Response 9: The department incorporated the data provided by the commenter, in line with rate-setting procedures. Revised rates for Ironworker are identified below in paragraph 5.
Comment 10: Robert Papin, UA Local # 30, submitted additional data and requested review of the per diem rate for Plumbers in districts 7, 8, 9, and 10. Response 10: The department has reviewed the information submitted. Revised per diem rates for Plumbers in districts 7, 8, 9, and 10 are identified below in paragraph 5. Comment 11: Steven Carey, UA Local # 459, submitted data and requested review of wages and benefits in districts 1and 2 for Plumbers. Response 11: The department has reviewed the information submitted. The prevailing wage rate for district 1 is correct. In district 2 the wage will be $26.31 and the benefit will be $10.82. The revised rates are also identified in paragraph 5. Comment 12: Steven Carey, UA Local # 459, inquired as to how a union wage could prevail, but not the union benefit in the same district. Response 12: The department notes that wage rates and benefit rates are set separately, as provided by ARM 24.17.121. As an example, survey data for a given district may include information showing that more than 50 percent of the workers receive a given wage and a given benefit amount. The wage amount might be higher than the collectively bargained rate, but benefits amount might be lower than the collectively bargained rate. The wages from the survey would be subject to the provisions of law that restrict the wage rate from being higher than the collectively bargained rate, and thus the prevailing rate established would be capped at the "union rate." The surveyed benefit rate, being lower than the union rate, would prevail. Comment 13: Larry Mayo, PNWRCC Local #112, submitted additional data for Carpenters in district 3. Response 13: The department has incorporated the data in line with the rate-setting procedures. The revised rates are identified below in paragraph 5. Comment 14: Roger Johanson, PNWRCC, provided notice to the department that the wage rate for Carpenters in district 10 is higher than the CBA submitted to the department. Response 14: The department has reviewed the information submitted. The wage rate of $29.00 was set in error. The correct wage rate will be $19.00. The correction is noted in paragraph 5. 4. The rule has been amended exactly as proposed. 5. The following rates in "The State of Electricians District Wage Benefit 1 3 6 Carpenters District Wage Benefit 1 3 8 10
Heating and Air Conditioning District Wage Benefit 1 2 3 4 5 6 7 8 9 10
Sheet Metal Worker District Wage Benefit 1 2 4 5 6 7 8 9 10 Ironworker-Structural Steel and Rebar Placer District Wage Benefit 8
Plumbers District Wage Benefit 2
Travel [for plumbers] District Per Diem 7 8 9 10 6. The "The State of Montana Prevailing Wage Rates – Heavy Construction Services" publication is amended to include work performed in Toole County as being subject to the rate for classification ELEC0233-001 06/01/2009. /s/ MARK CADWALLADER /s/ KEITH KELLY Mark Cadwallader Keith Kelly, Commissioner Alternate Rule Reviewer DEPARTMENT OF LABOR AND INDUSTRY Certified to the Secretary of State February 1, 2010
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