Tucson working on ordinance that could boost contractor pay

Firms that contract with the city for public works projects will soon have to show that their workers are being paid a “prevailing wage,” under a new proposed ordinance.

A motion approved unanimously earlier this month by the city council directs city staff to work on the ordinance and code adjustments that could result in a pay boost for city contract workers.

A prevailing wage is essentially a minimum wage by trade that is required to be “paid to those workers to ensure their wages are consistent” with local standards and the market around them, says Mike Rankin, the city attorney.

Rankin and Michael Ortega, the city manager, are to return to the council before the end of January with an ordinance it can pass.

At the federal level, the Davis-Bacon Act governs the rates of wages paid to laborers and mechanics that work on public works contracts funded by the federal government. The new ordinance and code amendments are to refer directly to the U.S. Department of Labor’s determinations under that act. That means wages set for federal contracts will influence the prevailing wage rates here.

Code amendments are to require “timely, weekly payments” to covered workers, Rankin and Mayor Regina Romero said. Cash payments will be prohibited.

Contractors will need to keep records and post notices, similar to Davis-Bacon. These will show employees what the wage rates are for their given trade. The record-keeping, Rankin said, is to ensure contractors stop misclassifying workers as independent contractors so that the burden of taxes doesn’t fall all on the employee.

These requirements, Romero says, will reduce pay gaps and will help lift workers into the middle class.

“Workers are the foundation of our economy, and since I have been on the council and now mayor, I have always made it a priority for me to support good paying jobs for workers. To me, a prevailing wage is important because it helps to stabilize families and protect construction workers who, by the way, are often victims of wage theft and classification,” Romero said. “It helps bring workers into the middle class and helps to reduce pay gaps for women, Black, immigrant and Latino workers.”

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“A lot of our workers that have worked on these projects for so long … they build hospitals they can’t afford to get care at, they build hotels that they can’t afford to stay at and resorts they can’t afford to vacation at,” Bill Ruiz, a representative for Western States Council of Carpenters, told the council. “By addressing the wage area standards you’re able to lift them up so that they can have and appreciate that standard of living they deserve from working and caring for their families.”

The new requirements will not apply to projects of less than $2 million dollars.

This follows the City of Phoenix’s attempt to pass similar requirements in March of this year. Rankin says this issue “came to a head” there when, for a brief moment in the spring, their mayor and council adopted a “resolution,” not an ordinance, which would’ve applied to construction contracting there.

Phoenix acted in March to adopt prevailing wage requirements, but a state senator initiated an SB 1487 complaint, asking the state Attorney General to weigh in on its legality, Rankin told the council.

Phoenix repealed its resolution a month after adoption.

Rankin said a conflict became apparent following the passing of Proposition 206 by Arizona voters which boosted the minimum wage. A.R.S. § 34-321, which came into in the 1980’s, explicitly prohibits municipalities to establish prevailing wage requirements. But Prop. 206 allowed those same municipalities to establish their own minimum wage “without limitations to whether that applies to construction contracting or not,” Rankin said.

In June, Arizona Attorney General Kris Mayes issued an opinion saying Arizona cities can lawfully require a prevailing wage in their construction contracts for public works.

The new city ordinance will “exclude procurements for projects that are funded in-whole or part by bonds or taxes approved by voters prior to Jan. 1, 2024.” Also excluded are projects “under job order contracts,” according to Romero. That would include Propositions 101, 407 and 411.

The ordinance would go into effect by July 1, 2024, so that “projects that are already in the pipeline, already budgeted for” are not subject to it, Rankin says, as well as to allow future contracts to account for the new requirements.