Vermont labor commissioner opposes payroll-certification requirement in prevailing-wage bill

Michael Harrington, commissioner of the Vermont Department of Labor, told a legislative committee that the department does not support a provision in a prevailing-wage bill that would require certified payroll submissions from state contractors.

Harrington said the department already has remedies when workers are underpaid under Vermont's prevailing-wage rules and that forcing certified-payroll review would impose substantial administrative burdens on contractors and on state agencies while creating privacy and capacity problems.

Harrington said, "we certainly did not put forth this request, and we don't support it," adding that the department's wage-and-hour unit investigates complaints and can determine whether an individual was paid additional wages owed under prevailing-wage law. He said those procedures create a complaint-driven remedy for workers who were miscoded or underpaid: "the department operates our wage and hour unit, and so the role of that unit is to receive wage complaints from Vermont workers, and then to investigate those complaints and in the end, come to some determination as to whether or not the individual should have been paid additional wages."

Committee members pressed Harrington on how often his unit handles prevailing-wage issues and on distinctions between prevailing-wage miscoding and worker misclassification. Harrington said the wage-and-hour unit receives "hundreds" of complaints a year but that complaints specifically tied to prevailing wage are likely "not more than a handful" annually. He said the unit currently has "2 investigators" for the entire state, and that a requirement to review certified payrolls from all state contractors would exceed the department's staffing capacity.

Harrington also raised practical and privacy questions about certified payroll collection, noting payroll records can include Social Security numbers and asking who would receive and review the files: "does the payroll go to the organization that they are contracting with? Right? So who who receives that payroll? How is the payroll transmitted? It's it's bridal, protected information in some cases because it includes Social Security numbers," he said.

Harrington said some state agencies already review certified payrolls where federal rules require it and where dedicated units exist'he cited the Agency of Transportation (AOT) as an example'but the Department of Labor does not currently perform that function. He recommended focusing on employer education about prevailing-wage coding and classification, saying: "I'd rather encourage us to focus on again, education, making sure employers are aware of the requirements, making sure they understand the classification system."

During questioning the commissioner clarified the difference between prevailing-wage coding and misclassification (employee versus independent contractor). He explained that misclassification is typically identified through unemployment insurance and workers' compensation audits and that Vermont uses specific state tests in addition to federal guidance like IRS criteria. He also noted that the ABC test is used for unemployment-insurance determinations and that workers' compensation uses a different test.

Members also raised worker-safety and break-related concerns, and Harrington said those issues often fall under federal Fair Labor Standards Act jurisdiction, the Vermont Attorney General's office, or occupational-safety rules administered either federally (OSHA) or by the Vermont Occupational Safety and Health Administration, depending on the issue.

Harrington offered to obtain more detailed data on how many complaints the wage-and-hour unit handled that directly related to prevailing wage and on case processing timeframes. No formal vote or committee action on the bill provision was recorded in the transcript.