The Indiana Common Construction Wage Act (“CCWA”) was first established in 1935. The primary purpose was to avoid out of state contractors from undercutting Indiana contractors on construction bid projects, where out of state contractors typically would hire cheaper and less-skilled laborers. Another primary goal was to increase the middle class workers of Indiana who may not have obtained a college education, because this law fostered a local skilled workforce, which in return strengthened the Indiana economy.
The common construction wage was only applicable for Indiana’s publicly financed projects worth more than $350,000. This allowed for local communities through a five person committee comprised of taxpayers, industry experts, and the agency building the project, to set wages based on previous construction project wages in the past for that county.
However, the Indiana General Assembly repealed the CCWA this 2015 legislative session, and it will take effect July 1, 2015. Governor Pence repealed the law and as such now, “unless required [under] federal or state law, public agencies are prohibited from establishing, mandating, or otherwise requiring a wage scale or wage schedule for a public works project.” Indiana is not the only state to have repealed its prevailing wage acts; West Virginia and Nevada have also recently repealed their wage acts.
One effect of repealing the CCWA is a more streamlined bidding and implementation process of public construction projects, by the removal of local boards that controlled the wage setting. Another prospective effect is that there will be significant savings to taxpayers. In replace of the Indiana Common Construction Wage Act, the Indiana General Assembly implemented new requirements under House Enrolled Act (“HEA”) 1019:
- That General or Prime Contractors (Tier 1) shall contribute to at least 15% of the contract price in work, materials, services, or any combination;
- Employees cannot be paid in cash from their Contractors;
- Contractors must E-verify each employee for a project;
- Contractors need to verify that they are in accordance with all federal and state law requirements regarding wage and safety standards;
- Contractors will need to maintain the required levels of general liability insurance; and
- Increases the cap for “small projects” from $150,000 to $300,000.
One provision from the CCWA that was not changed was the concept of apprenticeships and the E-Verify system. Uniquely though, the Indiana Department of Labor has no authority to enforce or investigate an alleged violation of any of new implementations, those allegations need to be addressed to the governmental agency that awarded the contract. These new laws regarding public finance construction projects are codified under Indiana Code Title 4: State Offices and Administration and within Articles 13.5 and 13.6, Construction of State Office Buildings and Other Facilities, and State Public Works, respectively.
It will be interesting to see how these changes under the new law not only affect Indiana’s potential economy growth, but also how public funds are distributed under Indiana’s Motor Vehicle Highway Fund. Currently for the fiscal year of 2014, Indiana approximately distributed over $753,416,640 to various counties, cities, and towns, with the largest portion going to the Indiana Department of Transportation at $385,211,405.
Corey Meridew of Camden & Meridew, P.C. practices in the areas of construction law, appellate law, business litigation, and utility law. Corey has litigated hundreds of claims under Indiana’s Damage To Underground Facilities Act and can help you. Should you need an attorney in this specialized area, call 317-770-0000 or complete our online contact form today.
This website supplies general information about the law but it is provided for informational purposes only. This content does not create an attorney-client relationship and more importantly is not meant to constitute legal advice. You should not act on any of the information contained herein without first consulting an attorney.
 Indiana Common Construction Wage, Section: About, History, http://www.commonconstructionwage.org/#!about/ci93 (last visited Jul. 15, 2015).
 Indiana Common Construction Wage, Section: About, What is Common Construction Wage?, http://www.commonconstructionwage.org/#!about/ci93 (last visited Jul. 16, 2015).
 Id. (last visited Jul. 15, 2015).
 Id. (last visited Jul. 16, 2015).
 Barnes & Thornburg, LLP, Indiana Repeals Common Construction Wage Act, The National Law Review, (May 12, 2015), http://www.natlawreview.com/article/indiana-repeals-common-construction-wage-act.
 Barnes & Thornburg, LLP Supra note 7.
 Indiana General Assembly, 2015 Session, Section: House Bill 1019, Digest, https://iga.in.gov/legislative/2015/bills/house/1019 (last visited Jul. 16, 2015).
 Barnes & Thornburg, LLP, Supra note 7.
 Indiana Department of Labor, Supra note 10.
 I.C. § 4-13.5 et. seq.; I.C. § 4-13.6 et. seq.
 Indiana General Assembly, 2015 Session, Handbooks: Taxes, Revenues, and Appropriations – Fiscal Year 2014 Edition, Section: State of Indiana Distribution of Motor Vehicle Highway Fund July 1, 2013 to June 30, 2014, page 283, https://iga.in.gov/legislative/2015/publications/handbooks/.