Possible Revisions to Connecticut’s Prevailing Wage Laws

Anyone involved with public construction projects is familiar with the term “prevailing wage,” which is generally understood to mean the minimum wages established by the government for each labor class that works on a given project. 29 C.F.R. § 1.2(a)(1). Connecticut’s prevailing wage requirements are far less onerous than the federal law, which apply to any project that costs more than $2,000. 40 USCS § 3142. Connecticut’s prevailing wage law only applies to new construction where the total cost of the work is $400,000 or more, and on remodeling or rehabilitation projects where the total cost of the work is $100,000 or more. Conn. Gen. Stat. § 31-53. Nonetheless, the state is currently considering increasing the project costs for which the prevailing wage law requirements will apply, i.e. the law’s threshold limits; indexing the threshold limits to inflation; and/or exempting certain public projects from the requirements entirely.

Given the disparity between the state and federal requirements described above and the proposed bills, it is interesting to consider the goals that the Connecticut state legislature intends to achieve. For all the bills that increase the threshold limits and/or exempt certain projects, the stated goals are to reduce costs for town public works projects;

Expansion of State’s Affirmative Action Program Remains in Effect

In a prior posting on this blog, I explained that a Connecticut program, which requires contractors on state public works construction projects to submit affirmative action plans to the Commission on Human Rights and Opportunities (the “Commission”) for approval, was being expanded to include projects administered by municipal and quasi-governmental agencies, and that the program’s expansion would be a problem because the Commission was already experiencing a backlog of submitted affirmative action plans requiring approval.  The Commission’s backlog has a significant impact on the construction industry because the “[f]ailure to develop an approved affirmative action plan … shall act as a bar to bidding on or the award of future contracts [and the Commission’s approval] shall be prima facie proof of the contractor’s eligibility to bid or be awarded contracts.”  Conn. Gen. Stat. § 46a-68c.  Thus, at a minimum, until the Commission is in a position to handle the required workload, the expanded program will significantly impact the state’s construction industry.

Due to the current situation, legislation was proposed last session that, if it had been passed, would have delayed the implementation of the expanded program until July 1, 2019. H.B.-5049.  The proposal to delay the expansion of the program was supported by trade associations and governmental agencies alike.

Quick Connecticut Legislative Update

Connecticut’s governor has recently signed two bills into law that pertain to the construction industry.

Public Act No. 16-35

According to Public Act No. 16-35, (Effective January 1, 2017), restoration and remediation work will fall within the definition of a “home improvement” pursuant to Conn. Gen. Stat. § 20-419. As a result, water, fire, and storm restoration and mold remediation contractors will have to register as Home Improvement Contractors and have contracts that meet all the requirements of the Home Improvement Act. As more fully explained in my other posts, the Home Improvement Act is an onerous piece of legislation that may bar a contractor’s right to recover the monies it is due simply because there is a technical defect in its contract. The Home Improvement Act is overly burdensome because it does not stop at invalidating the subject contract. If violated, all forms of recovery in law and in equity are prohibited. A contractor subject to the Home Improvement Act cannot even successfully file a mechanic’s lien if its contract does not have a required provision.

Notwithstanding the foregoing, Public Act No. 16-35 does take into account the fact that restoration and/or remediation work is often performed on an emergency basis.