State Budget: Prevailing Wage Reform

After much debate over whether prevailing wage reform would be passed as separate legislation, the changes were ultimately placed into the state budget and passed. Sen. Frank Lasee (R-De Pere) and Rep. Hutton (R-Brookfield) led the effort to include prevailing wage reform in the budget. Otherwise known as the “Lasee/Hutton Plan,” the changes reformed the state’s prevailing wage laws. The reform language included two main provisions: exempting all local governments, technical colleges, schools, municipal utilities and off-site trucking from Wisconsin’s prevailing wage laws; and uses federal rates on state projects.

In February, Sen. Leah Vukmir (R-Wauwatosa) and Rep. Hutton introduced AB 32/SB 49, which would repeal Wisconsin’s prevailing wage laws entirely. The companion bills each had daylong public hearings in committee in the Senate and the Assembly, respectively. The original legislation failed to pass the Senate labor committee on a 2-3 vote and passed the Assembly labor committee 5-4. In April, the first murmurings of including prevailing wage reform in the state budget bill began and three GOP state senators stated publicly that they would vote no on the budget bill unless prevailing wage reform was included.

Last week, GOP leadership announced that prevailing wage reform would be considered outside of the budget. However, during the final Joint Finance Committee meeting on the budget, the committee stood informal at 10:20 p.m. after all three final agenda items were passed. Though no official announcement was made, the press and those inside the capitol speculated Republican leaders were considering advancing changes to the prevailing wage law. After a lengthy delay, at 11:30 p.m., the committee reconvened without any consensus on prevailing wage. When legislators came back from the Fourth of July weekend to debate and pass the budget, the Senate announced prevailing wage changes would be included in the budget bill.

The prevailing wage reforms were adopted into the budget bill in the Senate with a vote of 17-16, along party lines with GOP Sen. Howard Marklein (R-Spring Green) and Sen. Rick Gudex (R-Fond du Lac) joining the Dems.

Currently in Wisconsin, Wisconsin’s prevailing wage laws require state and local units of government to pay “prevailing wages” – not market wages – to workers who work on certain public works projects. To determine prevailing wages in Wisconsin, the Wisconsin Department of Workforce Development (DWD) collects wage data via employer surveys and uses a statutorily-set process to set wages to be paid on public works projects.

The prevailing wage reforms included in SB 21 would take effect on January 1, 2017.

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