Missouri Governor Eric Greitens has signed into law legislation generally forbidding public entities from requiring union wage rates be paid on public construction projects.
The legislation, signed into law on May 30, 2017, and set to become effective August 28, 2017, prohibits the “prevailing wage” (a wage rate calculated from wage and benefit scales set forth in collective bargaining agreements with local unions) from being imposed by localities on publicly funded projects for the “repair, remodeling, or demolition of a facility.” Public entities also cannot discriminate against, encourage, or give preferential treatment to union contractors, or those voluntarily adhering to union wage and benefit rates.
The existing prevailing wage law barred the use of such “prevailing wages” for projects procured by the state. Senate Bill 182 expands that prohibition to cover projects procured by “any political subdivision of the state.” The bill also expands the applicability of the prohibition by eliminating the requirement that a project be more than 50 percent publicly funded to be subject to the law.
Greitens, a Republican political newcomer, campaigned on a business-friendly platform. Greitens signed “right-to-work” legislation just weeks after taking office. For more on that legislation, read our article Missouri Enacts Right to Work law. Signing of Senate Bill 182 is seen as another campaign promise fulfilled.
Missouri legislators have been pushing both right-to-work and repeal of prevailing wage for years, but the previous governor had vetoed every effort.
Proponents of the repeal claim that the legislation was necessary to provide a level playing field for non-union contractors and that it will save money for local public entities. Opponents argue that the repeal will hurt local workers who now risk losing work to “outside” non-union contractors who can underbid contractors that are bound to union contracts.
The new law provides a legal remedy for violations, including the recovery of attorney’s fees and referral to the local prosecuting attorney or circuit attorney for investigation.
Jackson Lewis attorneys are available to answer any management inquiries regarding this and other workplace developments.