Contractors’ penalties for wage violations toughened

Thursday, Aug. 30, 2001 | 10:10 a.m.

CARSON CITY -- Contractors who cheat workers by failing to pay the prevailing wage on government construction contracts are going to get hit with stiffer penalties.

And the state and local governments are being told they must keep a closer watch on contractors to detect any violations.

A law went into effect July 1 that changes the prevailing wage provisions, and state Labor Commissioner Terry Johnson held a workshop Wednesday in Carson City to get ideas for drafting regulations to ensure the law is obeyed.

About 30 people representing labor, contractors and the state and local governments attended the workshop to offer suggestions.

The law says a contractor who falsifies a wage report or doesn't pay the prevailing wage would be disqualified for three years from bidding on state or local government contracts on the first offense. The second and subsequent offenses call for a five-year disqualification.

"This is a huge financial incentive to comply with the law," Johnson said. The old law allowed disqualification of two years on the first offense and three years on the second and later violations.

Government construction contracts in Nevada "are big business," Johnson said, adding, "Last fiscal year we did $1.8 billion."

Additionally, contractors who violate the law will be required to pay $20 to $50 for each day in which he falsified a report or underpaid an employee. That penalty will go to the local government that awarded the contract.

A state or local government must pay the prevailing wage on a contract of more than $100,000. The prevailing wage is set by Johnson in the various regions in the state and usually mirrors the local union rate.

Johnson hopes to have the proposed new regulations drafted soon and has scheduled a public hearing Sept. 14 to get more comments.

The new law also stiffens requirements for governments in overseeing their contractors. The former law said the public body must "take cognizance of complaint" but the new law requires them to "investigate possible violation" and determine whether a violation has been committed. These reports are then forwarded to Johnson.

"We need to hold these government agencies accountable for holding the contractors accountable," he said.

One of the new regulations deals with the contractor submitting certified payroll reports to the contracting government. This is aimed at catching the contractors who may be cheating.

Public bodies, said Johnson should not rely only on the word of the contractor. But they should send inspectors into the field to verify that workers are being paid the prevailing wage, the number of workers on the job and if those who are designated as apprentices are really working in that category.

Johnson also said the regulations will be changed involving contractors who have multiple public works projects at the same time. If there are violations at different sites, than the penalties of disqualification from bidding public works projects will run consecutively.

Violations of these prevailing wage laws will now be prosecuted by the state attorney general's office, not the local district attorneys. Johnson said sometimes the district attorney was involved in awarding the contract and a conflict of interest would arise.