An investigation by the Minnesota Dept. of Labor and Industry found that Minnesota Controls Solutions, a Champlin, Minn., electrical contractor, incorrectly classified workers as apprentices and paid them less than the prevailing wage rate for work on a state-funded renovation project in 2019 and 2020.
The department recovered $44,873 in back wages owed to five construction workers at Camp Ripley, a 53,000-acre regional training center for military and civilian agencies near Little Falls, Minn., with back-pay amounts ranging from $287 to $21,925.
The workers did not meet the definition of an apprentice under Minnesota rules and should have been paid the prevailing wage rate for the classification of work performed, said Karen Bugar, state program administrative director of Prevailing Wage and Construction Misclassification.
Workers also were not paid overtime as required under the prevailing wage law.
Prevailing wage is the minimum hourly wage employers must pay their employees performing construction work on projects funded in whole or in part with state dollars. DLI sets the prevailing wage rates to be comparable to wages paid for similar work in the county where the construction project is located.
Bugar said misclassification cases in the construction industry often are exposed by workers.
“Generally, DLI’s prevailing wage section receives complaints from workers and other stakeholders that workers were not paid according to applicable law for the work performed on a construction project,” Bugar said. “DLI also performs onsite inspections and may find violations based on worker interviews and records.”
Scott Vossen, president of Minnesota Controls Solutions, did not respond to a call for comment.
Bugar said another In December 2021 involving misclassification set the record in the state for the most back wages collected.
The department recovered more than $334,000 in back wages for 33 construction workers who were not paid the correct prevailing wage or overtime pay on a project at a wastewater treatment plant in Detroit Lakes, Minn. In that case, the prevailing wage investigation found that AE2S Construction doing business as EIM, a North Dakota company, performed electrical work on a project at the plant that was partially funded by a state grant.
To avoid being afoul of state rules, Bugar encourages contractors to contact her department with questions.
“Construction companies should reach out to DLI prior to bidding on a publicly financed project if they have questions about the scope of work to be performed and appropriate classification of their workers,” she said.
She added that "general contractors should review the certified payroll reports from their subcontractors and address prevailing-wage compliance issues before payment is made to its subcontractors.”