What is Common Construction Wage?
The Common Construction Wage is the wage paid to construction workers on Indiana's publicly financed projects that cost more than $350,000.
The Common Construction Wage Law allows local communities to determine the wages to be paid on public works construction projects in their area. These wages are established by a five-person committee comprised of taxpayers, industry experts and the agency building the project. The committee determines the wages to be paid on public construction projects based on the wages construction workers have been paid in that county in the past.
Projects like Eskenazi Health, the Indianapolis International Airport, Lucas Oil Stadium, the Ford Center and major projects at state universities were all built using the Common Construction Wage Law.
Why Common Construction Wage?
The Common Construction Wage Law helps hard-working, skilled local workers on public construction projects earn a decent wage to support their families. In turn, the law fuels our local economy by creating jobs, generating economic activity and growing the local tax base.
Common Construction wage projects support apprenticeship and job training programs that provide Hoosiers with middle class career options. Without Common Construction Wage, these educational programs will suffer. In an economy where people without a college education struggle, this law fosters a skilled workforce and further strengthen the Indiana economy
The law promotes competition and rewards productivity, value and quality. It rewards contractors who do quality work rather than those who simply pay the lowest wages.
It gives taxpayers a vote on how their tax dollars are spent to finance community projects.
It controls cost while producing a quality product.
Indiana’s Common Construction Wage Law was first established in 1935, as a Republican Initiative and response to out of state contractors undercutting Indiana contractors with cheaper, less-skilled labor. The law was created to ensure Indiana businesses and Hoosier workers were benefitting from public works projects utilizing local tax dollars.
In 1995, the law was modernized by expanding the Common Construction Wage Committee from 3 to 5 persons. In addition to the Industry Representative appointed by the awarding agency, an AFL-CIO appointee and the governor’s appointee; two taxpayer appointees were added: one taxpayer appointed by the awarding agency and another taxpayer appointed by the county legislative body (usually the county commissioners).
Additionally, the threshold for applicability was increased from $25,000 to $150,000.
In 2012, Indiana’s Common Construction Wage received yet another modernization. The threshold for applicability was again raised from $150,000 to $350,000. The five-person committee used by each local community to implement the law was also again adjusted. This time the governor's appointment was transferred to the Associated Builders and Contractors to give non-union contractors a greater voice in the process. The committee now consists of the following:
An industry representative appointed by the awarding agency;
An appointee of the Indiana AFL-CIO;
An appointee of the Associated Builders and Contractors;
A taxpayer appointee, who will be paying the tax paying for the project, appointed by the awarding agency; and
A taxpayer appointee, who will be paying the tax paying for the project, appointed by county legislative body.
Indiana’s Common Construction Wage law has been modified to work most effectively as our state’s economy has changed. However, in the long run, the original purpose for the law remains as important today as it has been in the past. The need to ensure Indiana companies and Hoosier workers are benefitting economically from the public works projects funded by Indiana tax dollars is imperative to fueling our own local economy.