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| Montana Administrative Register Notice 24-17-288 | No. 20 10/23/2014 | |
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BEFORE THE DEPARTMENT OF LABOR AND INDUSTRY OF THE STATE OF MONTANA
TO: All Concerned Persons
1. On November 21, 2014, at 10:00 a.m., the Department of Labor and Industry (department) will hold a public hearing in the second floor conference room (conference rooms A and B), 1805 Prospect Avenue, Helena, Montana, to consider the proposed amendment and repeal of the above-stated rules.
2. The department will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, contact the department no later than 5:00 p.m., on November 17, 2014, to advise us of the nature of the accommodation that you need. Please contact the Labor Standards Bureau, Employment Relations Division, Department of Labor and Industry, Attn: Mike Smith, P.O. Box 201503, Helena, MT 59620-1503; telephone (406) 444-1741; fax (406) 444-7071; TDD (406) 444-0532; or e-mail [email protected].
3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:
24.17.103 DEFINITIONS As used in this subchapter, the following definitions apply, unless the context of the rule clearly indicates otherwise: (1) through (10) remain the same. (11) "Dispatch city" is the courthouse in the city from the following list which is closest to the center of the job: Billings, Bozeman, Butte, Great Falls, Helena, Kalispell, and Missoula. (11) through (16) remain the same, but are renumbered (12) through (17). (18) "Per diem" typically covers costs associated with board and lodging expenses. Per diem is paid when an employee is required to work at a location outside the daily commuting distance and is required to stay at that location overnight or longer. (17) through (19) remain the same, but are renumbered (19) through (21). (22) "Travel pay," also referred to as "travel allowance," is and must be paid for travel both to and from the job site, except those with special provisions listed under the classification. The rate is determined by measuring the road miles one direction over the shortest practical maintained route from the dispatch city or the employee's home, whichever is closer, to the center of the job. (20) remains the same but is renumbered (23). (24) "Zone pay" is an amount added to the base pay; the combined sum then becomes the new base wage rate to be paid for all hours worked on the project. Zone pay must be determined by measuring the road miles one way over the shortest practical maintained route from the dispatch city to the center of the job.
AUTH: 18-2-409, 18-2-431, 39-3-202, MCA IMP: 18-2-402, 18-2-403, 18-2-422, 39-3-201, 39-3-202, 39-3-203, 39-3-204, 39-3-205, 39-3-206, 39-3-207, 39-3-208, 39-3-209, 39-3-210, 39-3-211, 39-3-212, 39-3-213, 39-3-214, 39-3-215, 39-3-216, MCA
REASON: Reasonable necessity exists to provide these several definitions to provide clarity and consistency in the prevailing wage process. Definitions of these terms were previously included in the rate schedule adopted by reference. By including them within this rule, the department hopes to clarify the definitions and permit easier use during implementation, and avoid confusion that some users have recently complained of experiencing.
24.17.119 ESTABLISHING THE STANDARD PREVAILING RATE OF WAGES AND FRINGE BENEFITS – BUILDING CONSTRUCTION SERVICES (1) and (2) remain the same. (3) Based on survey data collected by the department for each district, the commissioner will compile wage rate information for a given occupation that reflects wage rates actually paid to workers engaged in public works or commercial projects. Where a wage rate is adopted from a collective bargaining agreement, applicable zone pay or travel pay, if any, shall be adopted from that same agreement. If the wage rate is adopted from collective bargaining agreements which have equal wage rates and different zone pay or travel pay, the zone pay or travel pay shall be adopted from the agreement covering more employees. Wage rates calculated through the survey for each occupation will be established using the following procedure: (a) through (f) remain the same. (4) Based on survey data collected by the department for each district, the commissioner will compile fringe benefit information for a given occupation that reflects fringe benefits actually paid to workers engaged in public works or commercial projects. Where a fringe benefit is adopted from a collective bargaining agreement, applicable per diem, if any, must be adopted from that same agreement. If the fringe benefit is adopted from collective bargaining agreements which have equal fringe benefits and different per diem, the per diem shall be adopted from the agreement covering more employees. A single fringe benefit rate calculated through the survey for each occupation will be established for bona fide benefits paid or contributed to approved plans, funds, or programs for health insurance, life insurance, pension or retirement, vacations, holidays, and sick leave using the following procedure: (a) through (f) remain the same. (5) The commissioner considers current wage rate information on file and as provided in survey responses when setting the standard prevailing rate of wages and fringe benefits for each craft, trade, occupation, or type of workers. (a) Wage information will be considered by the commissioner only if such information is received by the Department of Labor and Industry, (b) through (7) remain the same.
AUTH: 18-2-431, MCA IMP: 18-2-401, 18-2-402, 18-2-403, 18-2-413, 18-2-419, MCA
REASON: Reasonable necessity exists to modify this rule to clarify how zone pay, travel pay, and per diem are calculated. In particular, these amendments permit greater predictability for the public, and provide the department a definitive answer with regard to these pay add-ons. In addition, there is reasonable necessity to update the address used by the department for prevailing wage matters while the rule is otherwise being amended.
24.17.120 ESTABLISHING THE STANDARD PREVAILING RATE OF WAGES AND FRINGE BENEFITS – HEAVY CONSTRUCTION SERVICES (1) and (2) remain the same. (3) Based on survey data collected by the department statewide, the commissioner will compile wage rate information for a given occupation that reflects wage rates actually paid to workers engaged in public works or commercial projects. Where a wage rate is adopted from a collective bargaining agreement, applicable zone pay or travel pay, if any, must be adopted from that same agreement. If the wage rate is adopted from collective bargaining agreements which have equal wage rates and different zone pay or travel pay, the zone pay or travel pay must be adopted from the agreement covering more employees. Wage rates calculated through the survey for each occupation will be established using the following procedure: (a) through (e) remain the same. (4) Based on survey data collected by the department statewide, the commissioner will compile fringe benefit information for a given occupation statewide that reflects fringe benefits actually paid to workers engaged in public works or commercial projects. Where a fringe benefit is adopted from a collective bargaining agreement, applicable per diem, if any, must be adopted from that same agreement. If the fringe benefit is adopted from collective bargaining agreements which have equal fringe benefits and different per diem, the per diem must be adopted from the agreement covering more employees. A single fringe benefit rate calculated through the survey for each occupation will be established for bona fide benefits paid or contributed to approved plans, funds, or programs for health insurance, life insurance, pension or retirement, vacations, holidays, and sick leave using the following procedure: (a) through (e) remain the same. (5) The commissioner considers current wage rate information on file and as provided in survey responses when setting the standard prevailing rate of wages and fringe benefits for each craft, trade, occupation, or type of workers. (a) Wage information will be considered by the commissioner only if such information is received by the Department of Labor and Industry, (b) through (7) remain the same.
AUTH: 18-2-431, MCA IMP: 18-2-401, 18-2-402, 18-2-403, 18-2-414, 18-2-419, MCA
REASON: Reasonable necessity exists to modify this rule to clarify how zone pay, travel pay, and per diem are calculated. In particular, these amendments permit greater predictability for the public, and provide the department a definitive answer with regard to these pay add-ons. In addition, there is reasonable necessity to update the address used by the department for prevailing wage matters while the rule is otherwise being amended.
24.17.121 ESTABLISHING THE STANDARD PREVAILING RATE OF WAGES AND FRINGE BENEFITS -- HIGHWAY CONSTRUCTION SERVICES (1) and (2) remain the same. (3) Based on survey data collected by the department statewide, the commissioner will compile wage rate information for a given occupation that reflects wage rates actually paid to workers engaged in public works or commercial projects. Where a wage rate is adopted from a collective bargaining agreement, applicable zone pay or travel pay, if any, must be adopted from that same agreement. If the wage rate is adopted from collective bargaining agreements which have equal wage rates and different zone pay or travel pay, the zone pay or travel pay must be adopted from the agreement covering more employees. Wage rates calculated for each occupation will be established using the following procedure: (a) through (e) remain the same. (4) Based on survey data collected by the department (a) through (e) remain the same. (5) The commissioner considers current wage rate information on file and as provided in survey responses when setting the standard prevailing rate of wages and fringe benefits for each craft, trade, occupation, or type of workers. (a) Wage information will be considered by the commissioner only if such information is received by the Department of Labor and Industry, (b) through (7) remain the same.
AUTH: 18-2-431, MCA IMP: 18-2-401, 18-2-402, 18-2-403, 18-2-414, 18-2-419, MCA
REASON: Reasonable necessity exists to modify this rule to clarify how zone pay, travel pay, and per diem are calculated. In particular, these amendments permit greater predictability for the public, and provide the department a definitive answer with regard to these pay add-ons. In addition, there is reasonable necessity to update the address used by the department for prevailing wage matters while the rule is otherwise being amended.
24.17.122 ESTABLISHING THE STANDARD PREVAILING RATE OF WAGES AND FRINGE BENEFITS – NONCONSTRUCTION SERVICES (1) and (2) remain the same. (3) Based on survey data collected by the department for each district, the commissioner will compile wage rate information for a given occupation that reflects wage rates actually paid to workers engaged in public works or commercial projects. Where a wage rate is adopted from a collective bargaining agreement, applicable zone pay or travel pay, if any, must be adopted from that same agreement. If the wage rate is adopted from collective bargaining agreements which have equal wage rates and different zone pay or travel pay, the zone pay or travel pay must be adopted from the agreement covering more employees. Wage rates calculated through the survey for each occupation will be established using the following procedure: (a) through (f) remain the same. (4) Based on survey data collected by the department for each district, the commissioner will compile fringe benefit information for a given occupation that reflects fringe benefits actually paid to workers engaged in public works or commercial projects. Where a fringe benefit is adopted from a collective bargaining agreement, applicable per diem, if any, must be adopted from that same agreement. If the fringe benefit is adopted from collective bargaining agreements which have equal fringe benefits and different per diem, the per diem must be adopted from the agreement covering more employees. A single fringe benefit rate calculated through the survey for each occupation will be established for bona fide benefits paid or contributed to approved plans, funds, or programs for health insurance, life insurance, pension or retirement, vacations, holidays, and sick leave using the following procedure: (a) through (f) remain the same. (5) The commissioner considers current wage rate information on file and as provided in survey responses when setting the standard prevailing rate of wages and fringe benefits for each craft, trade, occupation, or type of workers. (a) Wage information will be considered by the commissioner only if such information is received by the Department of Labor and Industry, (b) through (7) remain the same.
AUTH: 18-2-431, MCA IMP: 18-2-401, 18-2-402, 18-2-403, 18-2-415, 18-2-419, MCA
REASON: Reasonable necessity exists to modify this rule to clarify how zone pay, travel pay, and per diem are calculated. In particular, these amendments permit greater predictability for the public, and provide the department a definitive answer with regard to these pay add-ons. In addition, there is reasonable necessity to update the address used by the department for prevailing wage matters while the rule is otherwise being amended.
24.17.127 ADOPTION OF STANDARD PREVAILING RATE OF WAGES (1) through (1)(d) remain the same. (e) The current building construction services rates are contained in the (f) The current nonconstruction services rates are contained in the (g) The current heavy construction services rates are contained in the (h) The current highway construction services rates are contained in the (2) and (3) remain the same.
AUTH: 2‑4‑307, 18‑2‑409, 18‑2‑431, MCA IMP: 18‑2‑401, 18‑2‑402, 18‑2‑403, 18‑2‑406, 18‑2‑411, 18‑2‑412, 18‑2‑413, 18‑2‑414, 18‑2‑415, 18‑2‑422, 18‑2‑431, MCA
REASON: There is reasonable necessity to update the prevailing wage rates for building construction services, heavy construction and highway construction services, and nonconstruction services following the annual survey of wages that is provided for in 18-2-413, 18-2-414, and 18-2-415, MCA, respectively. The department surveys employers and applies the methodologies provided by ARM 24.17.124 to determine those prevailing wage rates.
24.17.321 PAYMENT OF FRINGE BENEFITS (1) remains the same. (2) Apprentices must be paid the percentage of the basic hourly rate required, based on the total time in the craft (3) through (7) remain the same.
AUTH: 18-2-431, MCA IMP: 18-2-412, MCA
REASON: There is reasonable necessity to amend this rule so as clearly to state that, while apprentices may be paid a percentage of the hourly rate based on time in the craft, fringe benefits must always be paid in full.
24.17.821 FILING COMPLAINTS (1) through (3) remain the same. (4) Wage complaint forms can be obtained from the Labor Standards Bureau, Employment Relations Division, Department of Labor and Industry, 1805 Prospect Avenue, (a) and (5) remain the same.
IMP: 18-2-403, 18-2-407, 18-2-423, 39-3-201, 39-3-207, 39-3-209, 39-3-210, 39-3-211, MCA
REASON: Reasonable necessity exists to modify this rule so that the address contained therein is accurate.
4. The department proposes to repeal the following rule:
24.17.101 PURPOSE AND SCOPE
AUTH: 18-2-409, 18-2-431, 39-3-202, MCA IMP: 18-2-401, 18-2-402, 18-2-411, 39-3-201 through 39-3-216, MCA
REASON: There is reasonable necessity to repeal the rule to assist in the departmental goal of producing and maintaining administrative rules which are clear, concise, and free from superfluity.
5. Copies of the proposed 2015 publications, identified as "preliminary building construction rates," "preliminary highway construction rates," "preliminary heavy construction rates," and "preliminary nonconstruction rates" are available and can be accessed online at: www.mtwagehourbopa.com.
6. A printed version of the proposed 2015 publications is also available by contacting Mike Smith at the address, e-mail, or telephone numbers listed in paragraph 2 of this notice.
7. Concerned persons may present their data, views, or arguments, either orally or in writing, at the hearing. Written data, views, or arguments may also be submitted to: Labor Standards Bureau, Employment Relations Division, Department of Labor and Industry, Attn: Mike Smith, P.O. Box 201503, Helena, MT 59620-1503; fax (406) 444-7071; TDD (406) 444-0532; or e-mailed to [email protected], and must be received no later than 5:00 p.m., November 21, 2014.
8. An electronic copy of this notice of public hearing is available through the department's web site at http://dli.mt.gov/events, under the Calendar of Events, Administrative Rules Hearings Section. The department strives to make the electronic copy of this notice of public hearing conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the department strives to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems, and that a person's difficulties in sending an e-mail do not excuse late submission of comments.
9. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program or areas of law the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the Department of Labor and Industry, attention: Mark Cadwallader, 1315 E. Lockey Avenue, P.O. Box 1728, Helena, Montana 59624-1728, faxed to the department at (406) 444-1394, e-mailed to [email protected], or may be made by completing a request form at any rules hearing held by the agency.
10. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.
11. With regard to the requirements of 2-4-111, MCA, the department has determined that the amendment of the above-referenced rules may significantly and directly impact small businesses. The proposed amendments will have an impact on some, but not all, small businesses (those with less than 50 full-time employees). The proposed amendments directly affect the wages that must be paid for work on Montana public works contracts. The types of businesses affected are primarily those in the construction industry, but only affect those businesses that perform (or seek to perform) work on public works projects. In addition, there are businesses that provide certain types of nonconstruction services to state and local government agencies that are subject to payment of the prevailing wage rate. The types of nonconstruction service businesses that potentially are subject to the award of a public works contract are listed in 18-2-401(9), MCA.
There is no single effect on small businesses as a result of the proposed amendments. Some employers may have to pay higher wages as a result of changes to the prevailing wage rates; other employers may have a wage structure that is the same as or higher than the prevailing wage rate. Historically, some employers have stated that the prevailing wage rates are set too high, while other employers have stated that the rates are too low. In certain cases the difference between the established prevailing wage rate and the employer's customary wage rate may be significant, but it is unclear whether that difference will result in a significant change to the profitability of any given small business, as there are many other economic factors at play.
Montana law requires that prevailing wage rates be set following an annual survey of wages. There is an established statutory and administrative formula that establishes the prevailing wage rate for each work classification, based on the data and information gathered. The alternative to amending the wage rates is to not amend the rate, thus freezing the wage rate at the last-adopted level. Some employers would probably be adversely affected by the failure to adopt new prevailing wage rates. The department believes that under either alternative, some small businesses will be adversely affected by the selected alternative. The small businesses likely to be adversely affected by adoption of new rates are probably not the same as those that are likely to be adversely affected by not adopting new rates.
12. The department's Office of Administrative Hearings has been designated to preside over and conduct this hearing. 13. The department proposes to make the above amendments and repeal effective on January 2, 2015, in order to coincide with the start of the calendar year. The department believes there is reasonable necessity to propose the changes now so that interested parties have further opportunity to review them prior to them becoming effective. The department reserves the right to make the proposed amendments effective on a different date, or to not make the proposed changes.
/s/ MARK CADWALLADER /s/ PAM BUCY Mark Cadwallader Pam Bucy, Commissioner Alternate Rule Reviewer DEPARTMENT OF LABOR AND INDUSTRY
Certified to the Secretary of State October 14, 2014.
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