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Union and contractors clash over certified payroll requirement for state-funded construction
Summary
Union witnesses and construction contractors debated a proposed requirement for certified payroll on state-funded projects. Union speakers said certified payroll helps detect misclassification and wage theft; contractors warned certified payroll and prevailing-wage rules would shrink the contractor pool and raise costs.
Alex Bobbin, a 20-year member and officer of Local 693 (plumbers and pipefitters), told the Senate Economic Development, Housing & General Affairs Committee on March 18 that requiring certified payroll on state-funded projects would make misclassification and wage theft easier to detect and would not impose a novel burden on contractors.
"All contractors who participate in federal Davis-Bacon work are already compelled to abide by these requirements," Bobbin said, urging the committee to require certified payroll in state-funded projects to protect workers and taxpayer dollars.
Bobbin described two common forms of misclassification: classifying workers as independent contractors (1099) rather than employees (W-2) and classifying journeymen as helpers to reduce pay and deny fringe benefits and apprenticeship hours. He recounted a recent case in which a worker was shorted roughly $2,400 over a month and said the DOL complaint process can be cumbersome and intimidating for young workers.
Contractors and state procurement voices pushed back. One contractor witness, who identified characteristics of the state's contractor pool, said Vermont has about 1,000 registered contractors, of whom roughly 50–75 bid on Agency of Transportation (AOT) projects and about 15 general contractors currently bid on state work. He warned that adding certified-payroll requirements tied to prevailing-wage enforcement would reduce the pool of contractors willing or able to bid on state contracts and could raise project costs.
“That study found certified payrolls and prevailing wage laws increased the average cost of construction by about 15%,” the contractor said, referencing an outside study as part of his testimony.
Committee members noted the state already requires certified payroll for many AOT and federally assisted projects and that Buildings and General Services (BGS) does not require certified payroll across its projects. One senator summarized the compromise under consideration: require certified payroll on state projects that already carry prevailing-wage or federal Davis-Bacon requirements, and examine agency implementation and contractor supports for smaller subcontractors.
Why it matters: proponents said certified payroll gives the state a near-term tool to verify classifications and fringe-benefit payments on projects funded with public money; opponents warned about added paperwork, fewer bidders and higher bid prices. The committee did not adopt final language during the session but asked staff to continue refining language and to consult AOT, BGS and other states for models and implementation guidance.
Context and next steps: Alex and other union witnesses proposed using AOT's existing certified-payroll process as a model for other state agencies. Contractors asked for attention to small- and medium-sized firms' administrative capacity and suggested state training and vendor-support efforts if a certification requirement is expanded. Committee members asked staff to return with options in the next day or two; no formal committee vote was recorded during this meeting.
