Nov 08, 2016
Although he knew it was a function of the Auditor’s Office, Denver Auditor Timothy M. O’Brien, CPA, didn’t have much experience with prevailing wage enforcement when he took office in July, 2015. “It was baptism by fire,” he remembers. “I heard complaints from employers, employees and even from my own staff. I quickly realized that Denver’s 66-year-old prevailing wage ordinance might be part of the problem.”
“Auditor O’Brien is a natural problem solver,” said Jeff Garcia, who oversees prevailing wage enforcement and serves as the Auditor’s Director of Contracts and Accountability. “He began by holding meetings with all the stakeholders – employers, contractors, union leaders, contract managers and others who deal with prevailing wage – to gather information about where the prevailing wage ordinance was and wasn’t working.”
Auditor O’Brien’s efforts led to a major rewrite of Denver prevailing wage law. The revised ordinance was passed unanimously by Denver City Council last night.*
“Prevailing wage” was a concept enshrined in the federal Davis-Bacon Act, passed in 1931. Davis-Bacon applied to federally-funded construction projects. Its benefits were clear and similar legislation was passed by cities and states around the country.
“Prevailing wage prevents a ‘race to the bottom’ in wages. Contractors have to compete on quality and efficiency, not on who can pay their workers the least,” explained Howard Arnold, Business Manager for Pipefitters Local 208. “It also keeps the government from skewing the entire local wage scale because the largest construction projects are usually public works funded by the government.”
After numerous meetings with stakeholders, Auditor O’Brien asked the groups to delegate representatives to serve on a working group. The working group met all summer to hammer out changes to the ordinance. “This was the first time in history that the Auditor’s Office proactively reached out to both business and labor leaders to update the ordinance,” praised Dave Davia, CEO of the Colorado Association of Mechanical and Plumbing Contractors. “Auditor O’Brien won the respect of contractors by the way he handled the process.”
The ordinance clarifies the type of projects where prevailing wage applies and beefs up the penalties for willful non-compliance and non-reporting. For the first time, there will be a dispute resolution process, so that differences can be resolved without lengthy litigation. The revised ordinance simplifies previously complicated procedures to reduce the burden on contractors and encourage more of them to seek work with the City. When necessary, Denver’s Office of Human Resources will be empowered to set new wage rates with the advice of the Auditor’s Office. The debarment process is expected to work better by increasing to five the debarment panel members.
“I was surprised at the amount of agreement between management and labor,” said Auditor O’Brien. “Both groups wanted to make it easier to get rid of irresponsible or deceptive contractors. We added a provision that prime contractors list their subcontractors on their bids, or as soon as they become aware of them. This will allow City officials to help the prime contractors avoid subcontractors who have caused problems in the past.”
“One of the most important initiatives to us is Auditor O’Brien’s formation of a continuing prevailing wage advisory group,” said Taryn Edwards, Saunders Senior Vice-President and veteran of many large Denver construction projects. “Continuing the working group as an ongoing advisory body to the Auditor gives us a forum for resolving issues and making sure prevailing wage enforcement is both fair and effective.”
Historically, Denver’s prevailing wage ordinance covers many contracted service jobs as well as construction jobs. “Many contractors are familiar with Davis-Bacon, but having to adhere to prevailing wage for janitorial and other service jobs is more unusual, even though it has long been part of the City’s law” said Ron Ruggiero, President of the Service Employees International Union Local 105. “Auditor O’Brien recognized the importance of having our voice at the table.”
The ordinance goes into effect January 1, 2017. Under Auditor O’Brien’s tenure, the Prevailing Wage Division has emphasized education over penalties. “Sometimes employers don’t adhere to prevailing wage because they aren’t familiar with the automated payroll system or don’t know the difference between classifications,” explained Garcia. “Auditor O’Brien obtained funds in the 2017 budget to produce training videos and interactive programs to make it easier for employers to implement prevailing wage and allow workers to check their own wage rates.”
“I’m proud to be a prevailing wage investigator,” said Valerie Ramirez, a 32-year employee of the department. “It’s rewarding to know that the Prevailing Wage department provides protection to ensure employees are paid appropriately for the work they perform. Paying a fair wage produces benefits in both directions. Whole families can be helped by raising a breadwinner’s wage. And paying a fair wage means Denver can attract the most qualified workers.”