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Lawmaker Proposes Making Public Works Contractors Hire More Kentuckians

Frankfort, Kentucky - State Capitol Building
Henryk Sadura
Frankfort, Kentucky - State Capitol Building

A state lawmaker wants to require state public works contractors to have a majority of their employees be Kentucky residents.

Contractors with projects costing more than $250,000 would be required to have 51 percent of employees be Kentucky residents. Also, 15 percent of employees would be required to be apprentices in approved programs. Projects worth less than $250,000 would only have to employ at least one apprentice.

State Rep. Rick Nelson, Democrat from Middlesboro, said the bill would be especially effective for construction workers living near the state line.

“A lot of the companies go out of state to get people to do what they can do,” Nelson said.

The bill would apply to contractors working on projects including buildings, bridges, roads, waterworks and correctional facilities.

Apprentices would have to be enrolled in an approved apprenticeship program for the entirety of the project. Apprentices receive supervised on-the-job training and classroom instruction while earning wages.

“This is just something to help the folks in Kentucky, the workers in Kentucky, to get a fair shake to getting a job that’s using Kentucky tax dollars,” Nelson said.

The policy would be enforced by the Department of Workplace Standards in the Kentucky Labor Cabinet. Contractors that don’t comply would be fined as much as $1,000 dollars each day of non-compliance.

Jim Waters, the president of free-market think tank Bluegrass Institute, said Nelson is trying to force government policy on contractors.

"This is an attempt to tell contractors who know their work a lot better than government does how to do their job and who to hire," Waters said

Still, Waters said it would be good for contractors to hire more Kentuckians. But he said a better way would be to attract more employers to the state by eliminating the prevailing wage requirement.

Prevailing wage is the minimum amount public works contractors are required to pay their workers. The wage is set by the Kentucky Labor Cabinet and determined by comparing how much similar workers make in the area.

"I think we have a lot of local builders in Kentucky that would do a great job if they didn’t have this prevailing wage requirement," Waters said.

"They know who they need to have, who the best people are."

Eliminating the prevailing wage requirement has long been a goal of Republicans in the state legislature. The Republican-led state Senate passed a bill eliminating the prevailing wage last year but it wasn't taken up by the Democratic-controlled state House. Gov. Matt Bevin favors eliminating the prevailing wage.

The 2016 legislative session begins Jan. 5.

Ryland Barton is the Managing Editor for Collaboratives. Email Ryland at rbarton@lpm.org.

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