What We Think…
At Minnesota Construction Law Services, we believe that this bill would have severe consequences for the construction industry and its workers. That’s why founding attorney Bill Gschwind testified against the bill, urging lawmakers to reconsider its provisions.
As a contractor or construction industry professional in Minnesota, you should be aware of a new bill that has been proposed in the state legislature. HF1859, also known as the Wage Theft Prevention and Contractor Accountability Act, may seem like a reasonable proposal on the surface. However, upon closer examination, it becomes clear that this bill would have far-reaching and damaging effects on the construction industry.
What You Should Know…
The bill’s stated purpose is to create wage protection laws for construction workers and allow for investigations by the Department of Labor and Industry, as well as private lawsuits when construction workers are not paid by subcontractors or contractors for work on construction projects that are not related to single-family homes or duplexes, unless the project is for construction on ten or more homes. While this may sound reasonable in theory, the reality is quite different.
In practice, the bill would make contractors strictly liable for wages or misclassification of a downstream subcontractor when the subcontractor doesn’t pay the worker. This means that if a subcontractor fails to pay its workers, the contractor would be held liable for those wages, even if the contractor has already paid the subcontractor in full. This would put an enormous burden on contractors, who would be forced to take on the financial risk of subcontractors’ actions and could lead to a significant increase in the cost of construction projects.
Furthermore, the bill could lead to an increase in litigation against contractors. Private parties would be allowed to bring lawsuits against contractors for wages owed by a subcontractor, even if the subcontractor is still in business and available to pay those wages. This would create a situation where contractors are being held responsible for the actions of others, even when those others are still capable of fulfilling their obligations.
In summary, if you’re a contractor or construction industry professional in Minnesota, you should be aware of the potential consequences of HF1859. This bill may seem like a step towards protecting workers’ rights, but in reality, it could have a significant impact on the construction industry’s ability to operate effectively. We encourage you to learn more about this bill and to contact your state representatives to voice your concerns.