Bill > HF478

Introduced Session

This bill requires a contractor to pay workers the same hourly wage plus fringe benefits for a public improvement costing more than $25,000 as prevails in the locality of the public improvement. The bill allows the per-hour wage rate to be based on what is normally paid in the area by contractors for similar projects, and to be adjusted on a yearly basis by the department of inspections, appeals, and licensing (department). The wage rates that the workers must be paid shall also include benefits such as medical care, life insurance, overtime pay, and vacation and holiday pay. The bill applies to any public improvement that receives money from a public body and includes most types of public improvements from construction to road maintenance to painting to hauling. The director of the department (director) determines the wage rates for specific geographical areas and for specific crafts, classifications, and types of workers. This information must be posted on the department’s internet site. In determining what the wage rate for a worker is, the director may consult collective bargaining agreements, wage rate determinations for federal projects in the same area, and other information the department may receive from contractors who participate in an apprenticeship program approved by the federal office of apprenticeship. Any person affected by the wage rates has 15 days after the department has posted the wage rates on its internet site to object in writing, stating the specific reason for the objection, to the director. The director must reconsider the determination being objected to, and either affirm or modify it within 15 days of receiving the objection. If the director declines to modify the determination, within 10 days, the person affected may submit an objection in writing to the department, stating the specific reasons for the objection. A hearing must be set by the department before an administrative law judge within 45 days after the objection is filed. The person who filed the objection must show the administrative law judge that the wage rate was somehow made in error. The department is required to show how it determined the wage rate. The administrative law judge must make a decision about the wage rate within 30 days and it is considered a final determination. The bill requires that contractors and subcontractors not pay the workers less than the established wage rate but does not prohibit them from paying the workers more than the wage rate. The wage rate must be paid without any deductions such as for food, sleeping quarters, use of tools, or safety equipment. The bill also requires the public body to monitor the contractors and subcontractors to ensure that the wage rate is paid. A call for bids must state that the wage rate must be included in the bids for the public improvement. All bids shall list the specific wage rates for each craft, classification, and type of worker needed for the public improvement. All contractors and subcontractors are required to sign a contract that states they will pay workers the wage rate determined by the department. If the contractors and subcontractors are found to not be paying the wage rate, the contract states that the contractor’s or subcontractor’s right to work on the public improvement and get paid for work already done may be terminated. Before the contractor or subcontractor receives the final payment for the public improvement, the public body overseeing the public improvement must certify the payments include proper amounts due the workers, and the contractor or subcontractor must swear under oath that the records are accurate. The bill does not apply to public improvement projects funded by the federal government that require federal prevailing wage rates. However, unless a federal provision applies, if a public improvement project is financed by both a state public body and the federal government, then the higher of the applicable wage rates shall be paid to the workers. The bill also requires that contractors and subcontractors keep detailed records for at least three years about the workers, the rates paid, and the hours worked for each public improvement. The records are public records and must be available for inspection. However, workers’ personal information is not available to the public for inspection. During the public improvement, a contractor or subcontractor must present a certified weekly payroll to demonstrate that the correct and full wage rate is being paid to workers. The contractors and subcontractors must make all workers available on-site to officials for interviews so that the records’ accuracy can be checked. Contractors and subcontractors must also post the wage rates for each craft, classification, and type of worker in a public place where workers can see the posting or at the place where they receive their wages. The director is given specific powers for investigation, enforcement, and penalization. The director may sue to prevent a contractor or subcontractor from being awarded a contract for a public improvement when the wage rate requirements have not been met. The director is given the power to withhold payments if a contractor or subcontractor does not produce records upon request and to pay the workers directly if the contractor or subcontractor continues to refuse to provide records. After receiving a complaint, the director shall investigate whether there has been a violation. If the director determines there has been a violation, the contractor or subcontractor must be given notice of that violation. The notice is a formal written statement from the department that states the specific violation and the amount of money due as a penalty. If a public body has divided up a public improvement to avoid having to pay the wage rate, the director shall order compliance. A worker who is paid less than the wage rate set by this law can sue for the difference in payment and collect the difference along with costs and attorney fees in court. The contractor or subcontractor shall also have to pay the department 50 percent of the amount of underpayment and is liable to the worker for punitive damages of up to 5 percent of the underpayments for each month the underpayment remains unpaid plus costs and attorney fees. If a second or subsequent action for underpaying a worker is brought against a contractor or subcontractor within a three-year period and the contractor or subcontractor is liable, the contractor or subcontractor shall pay the department 75 percent of the amount of underpayment, is liable to the worker for 10 percent of the penalty for underpayments for each month following it that the underpayment remains unpaid, and is liable to the worker for triple the difference between the amount paid to the worker and the amount due under the wage rate set by the director plus costs and attorney fees. The director or any interested party has a right of action on behalf of any individual who has a right of action under the bill. The director may file a lawsuit in trust for a worker who assigns the claim and then bring legal action to collect the claim. The contractor shall be required to pay the expenses for collection of the claim. The bill prohibits a person from requesting or demanding that a worker pay back, return, donate, contribute, or give any part or all of the worker’s wages, salary, or thing of value, to any person who asserts that failure to comply with the request or demand will prevent the worker from procuring or retaining employment. The bill prohibits a person from paying, requesting, or authorizing any other person to violate the requirements of the bill. However, these provisions do not apply to authorized labor organization representatives collecting dues or assessments. In addition to other penalties under the bill, anyone who attempts to get a worker to give up any part of compensation on a public improvement by threat not to hire or by threat of firing is guilty of a serious misdemeanor. Any agreement to work for less than the determined wage rate is not a defense to criminal prosecution. A serious misdemeanor is punishable by confinement for no more than one year and a fine of at least $430 but not more than $2,560. If a contractor or subcontractor has violated the bill twice within a three-year period, the contractor or subcontractor or any company or group associated with the contractor or subcontractor shall not be given any public improvement work for five years. The department shall keep a list on its internet site of contractors and subcontractors who have violated the bill twice within a three-year period and notify public bodies by restricted certified mail. A contractor or subcontractor who has been notified of the second violation has 10 days to request a hearing before an administrative law judge. A hearing must be held within 45 days of the request. If no hearing is requested, the contractor is barred from receiving public improvement work and its name and information is posted on the department’s internet site. Apprentices employed on a public improvement project must be registered with the federal office of apprenticeship or the Iowa office of apprenticeship. Apprentices must receive the wages set out in the standards of apprenticeship and do only the work specified in the trade to which they are apprenticed. An apprentice not registered with the federal program shall be paid the wage rate the same as any other worker. The bill may include a state mandate as defined in Code section 25B.3. The bill makes inapplicable Code section 25B.2, subsection 3, which would relieve a political subdivision from complying with a state mandate if funding for the cost of the state mandate is not provided or specified. Therefore, political subdivisions are required to comply with any state mandate included in the bill. The bill takes effect January 1, 2026.

AI Summary

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Dave Jacoby (D)*, 

Introduced, referred to Labor and Workforce. H.J. 359. (on 02/19/2025)

Official Document