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Bill Overreaches by Extending Prevailing Wage to Prefab Facilities

Prefabrication offers the end-user high-quality components assembled in a safe, climate-controlled facility without the delays caused by weather and site conditions. Employees in permanent fabrication shops elect to work in these safe environments while receiving competitive wages and benefits.

Work in a prefabrication shops is not the same as construction work. That's why H. 2046 is an overreach. It equates the two by saying the prevailing wage law, which applies to public construction projects, should cover work done in a prefab shop.

The MCA’s members who perform public work fully comply with the state prevailing wage laws. The inference of the bill’s title, “An Act relative to compliance with the prevailing wage laws of the Commonwealth” is false. The bill is not about compliance with the prevailing wage law; it is about extending the wage law’s reach far beyond where the boundaries customarily recognized by the Legislature, courts, regulators and businesses in Massachusetts.

1. Cannot be enforced on out-of-state fabrication shops. Many fabricators of project-specific materials are located not only out of state, but out of the country. If the bill is enacted, for the new law to work fairly, the Massachusetts prevailing wage law would need to extend to workers in other states and countries.

2. The Division of Labor Standards and the Attorney General’s Office cannot enforce it out of state. What can the Massachusetts AGO do if a worker in New Hampshire (or Europe) has not been paid the correct prevailing wage? Many products specified for use on publicly financed projects in Massachusetts come from out-of-state fabricators. Prefab prison cells, structural-steel products, HVAC assemblies, lighting fixtures, etc., are some of the items made outside of our state’s boundaries. The DLS and the AGO have no jurisdiction outside of Massachusetts. It would be impossible to interpret how to apply the language of this new law consistently to in-state and out-of-state fabricators.

3. This will place Massachusetts fabrication shops at a competitive disadvantage. The legislation would create an incentive for bidders to outsource fabrication work out of state and this would result in the loss of existing jobs in Massachusetts. In fact, local business may be forced to relocate out of the state just to stay in business.

4. If the jobsite extends to a permanent fabrication shop, do apprentice ratios apply to workers in the fabrication shop, since those workers would be listed on certified payrolls? As written, it appears that the bill would have one jobsite ratio apply to all workers at the jobsite and fabrication site. Do apprentice hours worked in fabrication count the same as apprentice hours worked at a construction site? This work is markedly different as a construction site (or multiple construction sites) involves many safety concerns, a variety of tasks, and exposure to different conditions. A site dedicated to fabrication is a controlled environment that may not offer the same exposure to learning all aspects of the trade. With the bill as written, employers (including union contractors) will have incentive to place apprentices in fabrication shops and licensed employees at the construction site to maximize efficiency, but unintentionally undermine the purpose of apprenticeships and the indentured period of training.

5. If materials are prefabricated by an offsite manufacturer and not by specific construction trade workers, would the manufacturer be required to pay prevailing wage rates? Manufacturers often create products that are project specific. As written, the bill would require payment of prevailing wage to the manufacturing employees. This would be a significant change from current and historical prevailing wage in Massachusetts, federally, or in other states with prevailing wage laws. Also, this would pose a significant jurisdictional question as stated above.

6. This bill will increase the cost of construction. The state and municipalities already pay considerably more for construction than the private sector in Massachusetts. How much will this bill increase the cost of public construction? Should this bill become law, there will be an increased cost to many if not all public projects with respect to labor.

7. The legislation runs counter to federal law and procurement laws in an overwhelming majority of other states. In its 80-year history, the federal Davis-Bacon Act has never extended to off-site, permanent fabrication shops. MCA is not aware of any issues with respect to pay or employment opportunities with fabrication. The jurisdiction of prevailing wage has been the physical jobsite for decades. Extending that jurisdiction to the entire globe is both unnecessary, unworkable and simply wrong.

8. Fabrication work is not the same as construction work. A construction trade worker typically travels to a variety of different construction jobsites and works with a variety of tools of their trade. Depending on their trade, they likely are required to obtain a license after completing a prescribed number of work hours and training. A fabrication shop worker typically works in a single, permanent location and is trained to work on the machinery and equipment needed to repetitively fabricate the products sold by their employer. While perhaps sounding like they are similar, they are not the same job.

9. How will this law be applied to custom-fabricated materials that fall outside of construction trades? For example, the production of custom stage curtains for high school theaters or signs for highways have no directly comparable trade in the current prevailing wage rate sheet.




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