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IN Repeals Minimum Construction Wages

Monday, May 11, 2015

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INDIANAPOLIS—Lawmakers in Indiana have approved a controversial measure to eliminate 80-year-old boards that set base wages for major public construction projects.

Gov. Mike Pence, a Republican, signed House Bill 1019 into law Wednesday (May 6) after the measure passed in both the House and Senate.

Republicans control 71 percent of the House and 80 percent of the Senate.

Indiana statehouse

Supporters say the repeal of the common construction wage in Indiana will cut as much as 20 percent of public project costs.

“Wages on public projects should be set by the marketplace and not by government bureaucracy,” Pence said in a statement, calling the new law “a victory for Hoosier taxpayers.”

“By repealing the common construction wage, our state is putting hard-working taxpayers first, lessening the burden on cash-strapped local governments and schools, and opening doors of opportunity for small businesses across our state.”

The repeal becomes effective July 1.

Eliminating Boards

The law eliminates the five-member boards that set construction wages for each state or local project exceeding $350,000 in cost.

The boards include members appointed by labor unions and by non-union contractors.

ARSEE Engineers Inc.
ARSEE Engineers Inc.

The law repeals base wages on all state and local public-works projects that cost more than $350,000. The 2011 state-run renovation of the Victory sculpture atop the Indianapolis Soldiers and Sailors Monument cost $1.5 million.

Supporters say the change will allow more contractors to pay below union scale, slashing the cost of local and state construction projects by as much as 20 percent, the Associated Press reported.

The bill’s author, State Rep. Jerry Toor (R-Carmel), has said it will ensure “taxpayers get the best deal for their money.”

‘Slap in the Face’

Critics, however, argue that such savings are not likely.

They also say the law will encourage low-paying, out-of-state contractors to swoop in and underbid Indiana firms on government projects.

In a statement, State Rep. David Niezgodski (D-South Bend) called the signing of the bill a “slap in the face to not only our hard-working men and women, but Hoosier business owners and taxpayers as well.”

David L. Niezgodski

State Rep. David L. Niezgodski (D-South Bend) calls the law  a "slap in the face" to hardworking Indiana men and women.

He said the common construction wage had created a stable work environment and paid good wages to working-class Indiana residents.

“It was a system that worked for close to 80 years. It gave a $700 million boost to our economy,” Niezgodski said.

“The middle class in Indiana is dying," he said. "By getting rid of the common construction wage, our governor and his Republican supermajorities have sped up the process."

The wage proposal comes just a few months after Indiana's Supreme Court upheld the constitutionality of the state's "right to work" law, which drew thousands of protesters to the Statehouse when the measure passed in 2012.


Tagged categories: Construction; Good Technical Practice; Government; Government contracts; Laws and litigation; North America; Public Buildings

Comment from Mike McCloud, (5/11/2015, 5:04 AM)

The way America should be. This will allow for a lot more jobs and projects to be done. Nice job Indiana!

Comment from Rodney White, (5/11/2015, 8:21 AM)

Kudos, Hoosiers!

Comment from Robert Bullard, (5/11/2015, 10:03 AM)

Yep, Florida is the one-shot-job-out-of-state-contractor mecca. With bonding underwriters willing to take on anyone, these out of state guys vanish into wherever and the bond companies nickel and dime public owners on punch listing the last ten per cent of retainer.

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