Second Regular Session Sixty-eighth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 12-0045.01 Ed DeCecco x4216 HOUSE BILL 12-1082 HOUSE SPONSORSHIP Soper, SENATE SPONSORSHIP (None), House Committees Senate Committees Local Government A BILL FOR AN ACT Concerning the payment of prevailing compensation for workers on public works. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill requires a contractor awarded a contract for a public works by a state agency in excess of $100,000, and each subcontractor that works thereon, to: Pay workers at least the prevailing wages and fringe benefits, as established pursuant to federal law. The requirement for the payment of prevailing wages and fringe benefits must be included in a contract for a public works. Post the prevailing wages and fringe benefits; Pay workers at least once a week; Furnish payroll records to the director of the division of labor in the department of labor and employment (director); and File a written statement to the state agency certifying the amount of unpaid prevailing wages and fringe benefits. With respect to any failure to pay prevailing wages and fringe benefits, the bill: Establishes penalties, including termination of the contract, withholding contract payments, and civil penalties; Establishes a private right of action; Requires the director to publish a list of contractors and subcontractors who willfully fail to make such payments and to debar a contractor or subcontractor for multiple violations within a 3-year period; and Prohibits a contractor or subcontractor from discriminating against a worker for asserting rights or for participating in an action by the director. The director is authorized to investigate whether workers on a public works are being paid prevailing wages and fringe benefits. Appropriations for these investigations shall be made from moneys in the newly created prevailing wage enforcement fund, which shall include revenue from certain penalties paid by contractors or subcontractors. The bill specifies that the prevailing wage and fringe benefits requirement will not interfere with workers' right to bargain collectively. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, add article 16.5 of title 8 as follows: ARTICLE 16.5 Public Works - Prevailing Wages and Fringe Benefits 8-16.5-101. Legislative declaration. (1) The general assembly hereby finds and declares that the establishment of prevailing wages and fringe benefits for workers performing public works will: (a) Promote safe, cost-effective, and high-quality construction by trained, skilled craft workers; (b) Ensure that workers performing public works are fairly compensated for their labor; (c) Protect Colorado workers and employers from the effects of unfair competition caused by the payment of substandard wages and fringe benefits; and (d) Help ensure that employers have a vested interest in Colorado and the local communities in which public works are undertaken. (2) Now, therefore, by enacting this article, the general assembly intends to require all contractors and subcontractors to pay prevailing wages and fringe benefits for workers performing public works. 8-16.5-102. Definitions. As used in this article, unless the context otherwise requires: (1) "Apprentice" means a person who is currently registered as an apprentice in and who receives training from an established, bona fide apprenticeship program that has standards approved by the state or the office of apprenticeship located in the employment and training administration in the United States department of labor or any successor federal agency. (2) "Contractor" means any individual, corporation, company, partnership, firm, joint venture, association, or other business entity that is awarded a contract for a public works by a state agency. (3) "Director" means the director of the division of labor in the department of labor and employment. (4) "Fringe benefits" means the amount of: (a) The costs to the contractor or subcontractor that may be reasonably anticipated in providing health care, pensions, compensation for injuries or illness resulting from occupational activity, unemployment benefits, vacation and holiday pay, apprenticeships or job training, life insurance, disability and sickness insurance, accident insurance, or similar benefits to workers pursuant to an enforceable commitment to carry out a bona fide, financially responsible fund, plan, or program that was communicated in writing to the affected workers; and (b) The contribution irrevocably made by a contractor or subcontractor to a bona fide, financially responsible fund, plan, or program. (5) "Fund" means the prevailing wage enforcement fund created in section 8-16.5-109. (6) "Prevailing wage" means the wage rate paid for the same craft or trade as established by the United States secretary of labor pursuant to 40 U.S.C. sec. 3141 et seq. (7) "Public works" means construction, renovation, demolition, alteration, or repair work performed under contract and financed in whole or in part by state moneys. (8) "State agency" means any department, agency, authority, commission, council, board, bureau, committee, institution of higher education, or other state entity. (9) "Subcontractor" means any subcontractor or lower tier subcontractor of a contractor. (10) "Worker" means any laborer, mechanic, or apprentice employed by any contractor or subcontractor and engaged in the performance of services upon a public works. 8-16.5-103. Payment of prevailing wages and fringe benefits. A contractor awarded a contract for a public works by a state agency in excess of one hundred thousand dollars, and each subcontractor used on such contract, shall pay its workers the prevailing wages and fringe benefits required pursuant to this article. Such workers shall be paid not less than once a week. A contractor or subcontractor shall meet its obligation to pay fringe benefits by making contributions to a bona fide, financially responsible fund, plan, or program. 8-16.5-104. Contract provisions. Any contract for a public works in excess of one hundred thousand dollars to which any state agency is a party shall contain a provision stating that workers performing work on such contract shall be paid prevailing wages and fringe benefits required pursuant to this article. Such contract shall also contain a provision stating that in the event it is found that any worker employed by the contractor or any subcontractor has been paid wages or fringe benefits at rates less than those required by this article, the state agency may terminate the contractor's or subcontractor's right to proceed with the work, or such part of the work for which there has been a failure to pay prevailing wages and fringe benefits, and may make other arrangements as the state agency deems necessary to complete the work. The contractor and its sureties shall be liable to the state agency for any resulting excess costs. Contractors or subcontractors that fail to pay required prevailing wages and fringe benefits shall also be subject to withholding of payments due from the state agency and other penalties and sanctions as provided by this article. 8-16.5-105. Establishment of prevailing wages and fringe benefits. (1) The prevailing wages and fringe benefits for each respective craft or trade to be employed on a public works shall be the same as the applicable wages and fringe benefits set forth in the prevailing wage determinations made by the United States secretary of labor pursuant to 40 U.S.C. sec. 3141 et seq. The director shall keep and maintain copies of such prevailing wage determinations made by the secretary of labor. (2) Nothing in this article shall prohibit a contractor or subcontractor from paying more than the prevailing wages and fringe benefits to any worker employed on a public works. 8-16.5-106. Certified payroll records. (1) A contractor awarded a contract that is subject to the requirements of section 8-16.5-104, and each subcontractor, shall furnish to the director on a weekly basis a certified copy of its payroll records for the preceding week. The certified payroll shall include each worker's name, address, job classification, hourly wages and fringe benefits paid, deductions, paycheck number, telephone number, and hours worked each day in that classification. The certified payroll shall include a statement signed by the contractor or subcontractor stating that: (a) The records are true and accurate; (b) The hourly wages and fringe benefits paid to each worker are not less than the prevailing wages and fringe benefits required by this article; and (c) The contractor or subcontractor is aware that filing a false certified payroll is a violation of this section. (2) A contractor or subcontractor shall retain a copy of the certified payroll for three years from the date of the end of a contract for a public works. A contractor or subcontractor that fails to provide the certified payroll required by subsection (1) of this section shall pay to the director one hundred dollars for each day of noncompliance, which shall be deposited into the fund. (3) The certified payroll received by the director shall be a public record subject to the provisions of part 2 of article 72 of title 24, C.R.S. 8-16.5-107. Authority of director. (1) With respect to any contract for a public works entered into by a state agency in excess of one hundred thousand dollars, the director shall have the authority to: (a) Investigate and ascertain the wages and fringe benefits of workers employed in the public works; (b) Enter and inspect the place of business of any contractor or subcontractor to: (I) Examine the books, payrolls, and other records relating to wages, hours, fringe benefits, and other requirements of this article; (II) Copy any books, payrolls, and other records as the director may deem necessary or appropriate; and (III) Question workers to determine compliance by the contractor or subcontractor with the provisions of this article; (c) Require from any contractor or subcontractor full and correct written statements, including sworn statements, relating to wages, hours, fringe benefits, and other information pertaining to workers and their employment as the director may deem necessary or appropriate; and (d) Require any contractor or subcontractor to file, within ten days of receipt of a request from the director, any records enumerated in paragraphs (b) and (c) of this subsection (1), sworn as to their validity and accuracy. 8-16.5-108. Posting of prevailing wages and fringe benefits. Any contractor or subcontractor performing work on a contract that is subject to the requirements of section 8-16.5-104 shall post the prevailing wages and fringe benefits for each craft and trade related to the contract in prominent and easily accessible places at the work site of the public works and at any place used by the contractor or subcontractor to pay workers. 8-16.5-109. Prevailing wage enforcement fund - creation. There is hereby created in the state treasury the prevailing wage enforcement fund. Moneys in the fund shall be appropriated to the director for the purpose of enforcing the provisions of this article. All interest and income earned on the deposit and investment of moneys in the fund shall be credited to the fund. Any moneys not appropriated shall remain in the fund and shall not be transferred or revert to the general fund or any other fund at the end of any fiscal year. 8-16.5-110. Enforcement and penalties. (1) Any state agency having public works performed under a contract in excess of one hundred thousand dollars where any worker is paid less than the prevailing wages and fringe benefits shall notify the director in writing of the name of the contractor or subcontractor failing to pay prevailing wages or fringe benefits, unless the contractor or subcontractor cures the alleged underpayment within a reasonable time. (2) Any worker, organization representing workers, or any other person may file a complaint with the director objecting to the wages or fringe benefits paid to workers on a public works. (3) Upon receipt of a notice or complaint pursuant to subsection (1) or (2) of this section, the director shall direct the state agency to withhold payment to the contractor or subcontractor and shall provide the contractor or subcontractor with written notice of intent to withhold payment. Before issuing an order or determination on the alleged violation, the director shall hold a hearing and provide notice to the contractor or subcontractor of the time and place of the hearing, along with a copy of the complaint. The hearing shall occur no later than fifteen days from the date of service of the notice. (4) Hearings held pursuant to this section shall be conducted by the director or the director's designee, who shall have the right to issue subpoenas, administer oaths, and examine witnesses. The director or designee shall make a determination and enter an order within ten days after the hearing and shall serve a copy of the order upon the parties. The order shall either dismiss the charges or direct payment of prevailing wages or fringe benefits found to be due, including interest at the rate of twelve percent from the date of the underpayment to the date of payment. If the order directs payment of prevailing wages or fringe benefits found to be due, the order shall direct payment of reasonable attorney fees and costs to the party that filed the complaint. (5) Upon a finding that a contractor or subcontractor has willfully failed to pay prevailing wages and fringe benefits, the order entered pursuant to this section shall also require a civil penalty of at least two times the total amount due but not more than three times the total amount due. In assessing the amount of the penalty, due consideration shall be given to the size of the contractor's or subcontractor's business, the gravity of the violation, the history of previous violations, and the failure to comply with record-keeping requirements. The penalty shall be paid to the director, who shall transmit the payment to the state treasurer for deposit in the fund. The surety of any contractor or subcontractor found to be in violation of this article shall be bound to pay any penalties assessed on such contractor or subcontractor. (6) If a contractor or subcontractor fails to provide any records relating to the public works requested by the director within ten days from the date of the request, the director shall, within fifteen days from the date of the request, direct the state agency under contract with the contractor or subcontractor to immediately withhold from payment to the contractor or subcontractor up to twenty-five percent of the amount, which withholding shall not exceed one hundred thousand dollars, to be paid under the contract. The amount withheld shall be immediately released upon receipt by the state agency of a notice from the director that the request for records has been satisfied. (7) Any contractor or subcontractor found to have willfully made a false or fraudulent representation on any records requested by the director for enforcement of this article shall be required to pay a civil penalty in an amount no less than one thousand dollars and no more than fifteen thousand dollars for each such representation. The penalty shall be paid to the director, who shall transmit the payment to the state treasurer for deposit in the fund. (8) An order entered pursuant to this section shall constitute final agency action for purposes of section 24-4-106, C.R.S. (9) For purposes of this article, conduct that is undertaken willfully is any action that was taken as the result of intentional conduct or conduct undertaken with a reckless disregard as to the result or consequences. 8-16.5-111. Statement by contractor of amounts due. (1) Before final payment is made by a state agency of any sum due on a contract for a public works, the state agency shall require the contractor to file a written statement certifying the amounts due and owing to workers by the contractor and each subcontractor for unpaid prevailing wages and fringe benefits and including the names of the persons whose wages or benefits are unpaid and the amount due to each. The contractor shall verify in writing that the contractor has read the statement, that the contractor knows its contents to be true and accurate, and that the contractor has the authority to make the statement. (2) The state agency shall notify the director in writing of the name of a contractor or subcontractor failing to pay the prevailing wages or fringe benefits for public works performed for the state agency. (3) The state agency shall withhold the amount of any unpaid prevailing wages and fringe benefits for the public works, as shown by the verified statement filed by the contractor, and shall pay directly to any worker the amount owed to the worker shown by the statement. 8-16.5-112. Contractors and subcontractors - list of violators - debarment. (1) The director shall create a list of the names of any contractor or subcontractor whose failure to pay prevailing wages or fringe benefits was determined to be a willful violation of the requirements of this article and provide a copy of the list to any state agency that requests it. The director shall make the list publicly available and post the list on the official web site of the department of labor and employment. (2) In the event that the director determines that a contractor or subcontractor has committed two or more willful violations of this article, each of which occurs within a three-year period and each of which results in awards of back pay or other penalties of one thousand dollars or more, the contractor or subcontractor shall be debarred from performing work on a new contract for a public works for a period of at least one year, but not greater than three years, as determined by the director. (3) Prior to making the determination set forth in subsection (2) of this section, the director shall notify the violating contractor or subcontractor. The contractor or subcontractor shall have ten days to request a hearing with the director on the alleged violations. Failure to respond within the ten-day period shall result in debarment for a period set by the director. If the contractor or subcontractor requests a hearing within the ten-day period, the director shall set a hearing on the alleged violations no later than forty-five calendar days after the receipt of the request by the director. 8-16.5-113. Discrimination against workers. (1) A contractor or subcontractor shall not discharge, threaten, retaliate against, or otherwise discriminate against a worker, former worker, or any authorized representative of a worker regarding compensation, terms, conditions, locations, or privileges of employment because the worker, former worker, or authorized representative: (a) Participates in any investigation, hearing, or inquiry conducted by the director in connection with this article; and (b) Reports a violation of this article or otherwise asserts rights pursuant to this article. (2) A worker, former worker, or an authorized representative of a worker may file an action in any court of competent jurisdiction for a violation of this section. If there is a violation, the court shall order reinstatement, restitution, or both as appropriate; back pay to the date of such violation; an additional amount in liquidated damages equal to twice the amount of back pay; and reasonable attorney fees and costs. 8-16.5-114. Private right of action. (1) (a) A worker, former worker, or an organization representing workers may bring a civil action for violations of this article in any court of competent jurisdiction for appropriate injunctive relief, actual damages, or both within three years after the occurrence of the alleged violation. Such an action may be brought by a worker or organization on behalf of the worker or an organization and other workers or former workers similarly situated. If the action is brought on behalf of other workers or former workers similarly situated, the action shall proceed as a collective lawsuit. (b) Any contractor or subcontractor found liable shall pay to an affected worker the amount of unpaid prevailing wages or fringe benefits, an additional amount in liquidated damages equal to the amount of the unpaid prevailing wages or fringe benefits, and interest. (c) Damages for any other violation of this article shall be paid to the director, who shall transmit the payment to the state treasurer for deposit in the fund. (2) A civil action filed pursuant to this section may be commenced instead of, but not in addition to, a hearing by the director held pursuant to section 8-16.5-110 if the civil action is filed prior to the date the director issues notice of such a hearing. At the request of a worker, former worker, or an organization representing workers, the director may take an assignment of the wage claim in trust for the worker and may bring any legal action necessary to collect the claim. (3) An action pursuant to this section may be brought by one or more workers or former workers on behalf of themselves and other workers. (4) Unpaid fringe benefit contributions owed pursuant to this section in any form shall be paid to the appropriate benefit fund, and in the absence of an appropriate benefit fund, the benefit shall be paid to the director, who shall transmit the payment to the state treasurer for deposit in the fund. (5) In addition to any judgment awarded pursuant to this section, the court shall require the payment of reasonable attorney fees and costs. 8-16.5-115. Collective bargaining. Nothing in this article shall be deemed to interfere with, impede, or in any way diminish the right of workers to bargain collectively through representatives of their own choosing in order to establish wages and fringe benefits in excess of the prevailing wages and fringe benefits established pursuant to this article. 8-16.5-116. Rule-making authority. The director is authorized to promulgate rules in accordance with article 4 of title 24, C.R.S., as may be required for the administration and enforcement of this article. SECTION 2. Act subject to petition - effective date - applicability. (1) This act takes effect September 1, 2012; except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within the ninety-day period after final adjournment of the general assembly, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2012 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor. (2) The provisions of this act apply to contracts for a public works that are entered into or renewed on or after the applicable effective date of this act.