Prevailing Wage Changes May Still Get Missouri Governor’s OK

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By Christopher Brown

The Missouri Legislature forwarded to the governor’s office May 30 bills that would put additional restrictions on public-sector unions, reduce the number of workers covered by the state’s civil service law, and carve out additional exceptions to the state’s prevailing wage law.

But the march of the bills toward full enactment will not be as steady as had been expected after the May 29 announcement by Gov. Eric Greitens (R) that he will step down June 1 amid scandals related to an extramarital affair and to political fundraising.

Greitens’ signature on the bills had been considered very likely, given his reputation for supporting employer-friendly legislation. He signed a right-to-work law in 2017 with much fanfare.

If Greitens doesn’t sign the bills before he leaves office, their fate will be in the hands of Lt. Gov. Mike Parson (R), a former state lawmaker with a reputation as a reliable conservative and an adept inside operator.

Neither Greitens nor Parson was available for comment May 30.

Union officials who are opposed to all three of the labor-related bills tell Bloomberg Law that Parson is also very likely to sign them, despite his lack of a strong track record on labor issues.

“Lt. Gov. Parson is a conservative who is in the mainstream of his party in Missouri, and I doubt he’s going to do anything that will separate him much from the Republican caucus in the Legislature,” Otto Fajen, legislative director for the Missouri National Education Association, said. “He’s not the kind of guy who’ll be pushing for much more than is contained in these bills in the future, but he’s probably pretty comfortable with the direction they’ll be taking things.”

The bills are H.B. 1413, S.B. 1007, and H.B. 1729.

‘Contracting Minimum Wage’ May Prevail

H.B. 1729 would provide some additional carve-outs from the state’s prevailing wage law. Contractors in each county would be asked to provide information on wages paid in the previous year for certain job categories. If information for at least 1,000 hours of work is not available for a job category in that county, the prevailing wage law wouldn’t apply.

Workers not covered by the prevailing wage system would be paid a newly established “contracting minimum wage,” defined as 120 percent of the county’s average wage. That minimum is intended to provide a wage that reflects a standard fringe benefit package, according to a summary of the bill prepared by the SITE Improvement Association, a lobbying group for union contractors.

The bill also would exempt from prevailing wage requirements any public works project with a projected cost under $75,000.

The Missouri School Boards’ Association supports reform of the prevailing wage law to give school districts more flexibility in controlling costs, Susan Goldammer, the group’s senior director of employment and labor relations, told Bloomberg Law. Districts in areas with high union membership are very supportive of the law, however, she said.

The $75,000 threshold would be helpful in dealing with one of the thorny legal issues related to the Missouri prevailing wage law: the distinction between construction projects, which are covered by the law, and maintenance projects, which are not, Goldammer said.

“Most maintenance projects end up coming in under $75,000, so that provision will help our members avoid some of the wrangling and legal uncertainty they’ve had to deal with in the past,” she said.

H.B. 1729 represents a compromise worked out between lawmakers interested in a full repeal of the prevailing wage law and union contractors and other supporters of the prevailing wage requirements, Terry Briggs, executive director of SITE, told Bloomberg Law.

A key argument to winning over lawmakers potentially open to a repeal was the harmful economic effects that eliminating prevailing wage would have on many localities, he said.

“We were able to talk to some of the legislators that we have relationships with, and let them know what would happen to the wage rate, and to the construction industry overall, if the prevailing wage went away,” he said.

“It’s hard enough now to get young people to go into construction. It would be nearly impossible if you cut the wages any further.”

Public Workers and Recertification

H.B. 1413 would require public-sector workers to recertify every three years that they want to continue being represented by their union. A vote of more than 50 percent of the members of the bargaining unit would be required.

The bill also includes a “paycheck protection” provision, sometimes derided by unions as a “paycheck deception” provision. That portion of the bill would require unions to obtain annual authorization from each member before deducting dues or fees from paychecks.

The bill would provide needed clarity to public employers as to their collective bargaining obligations, Goldammer said.

MSBA didn’t take a stand on the bill, and Goldammer said opinions are divided among school boards around the state as to the value of collective bargaining. Those that have made their peace with the process or even embrace it may find some provisions onerous, such as those related to the withholding of union dues, she said.

The recertification provisions of H.B. 1413 are potentially damaging for public unions, Clark Brown, legislative director for the Service Employees International Union in Missouri and Kansas, said.

The bill could result in a “serious erosion of public unions to represent” as each unit is subject to a recertification battle every three years, Brown said.

“This is a very restrictive piece of legislation, an egregious attack on public unions,” he said. “The strong units in our state will be able to survive the effects of this bill, but with the way they’ve set this up, we could see some losses.”

Merit System Targeted

S.B. 1007 removes most state workers from the state’s merit-system law, making them at-will employees who no longer have due-process protections in hiring, promotions, and firing.

Sen. Mike Kehoe (R), the bill’s sponsor, and other supporters have said the measure is merely an attempt to reform a 70-year-old merit system that is out of date and applies to less than half of the state’s workers.

Moving most workers out of the merit system would have the benefit of putting all state workers on a level playing field and allow managers to reward high-performing employees without being restricted by the merit system’s pay bands, supporters said when the bill was being debated by the House General Laws Committee.

Kehoe didn’t respond to requests for comment.

Fajen rejects the supporters’ characterization of the bill in such moderate terms. The legislation is one of the more far-reaching attempts at reform of a state civil service system that the country has yet seen, he said.

“The merit system law creates a structure and protections for workers so that they are not subject to the whims of managers, and not exposed to political retaliation,” he said. “S.B. 1007 strips those protections away, and allows workers to be fired for good reasons, bad reasons or no reasons at all.”

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