Skilled Construction Trades and Respected Contractors
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Welcome to Construction Business Group's Industry Updates.  This monthly e-newsletter will help us communicate the important initiatives that we have underway and relevant updates on issues that impact Wisconsin's construction industry.  
Message from Executive Director  Robb Kahl
As we are about to enter a New Year, I thought it would be a good time to reflect on a few highlights from 2019. In January, Governor Tony Evers and Attorney General Josh Kaul were sworn into office. With new leadership came sweeping change within Wisconsin administrative agencies. In stark contrast to the last term of the previous Governor, Governor Evers appointed secretaries with substantive knowledge and experience, such as DOT Secretary Craig Thompson and DWD Secretary Caleb Frostman. With new agency leadership came much-needed agency reorganization and direction.
On April 15, 2019, Governor Evers signed Executive Order #20 that aimed to streamline enforcement of payroll fraud and protect the taxpayers of Wisconsin. Payroll fraud plagues the construction industry and allows unscrupulous contractors an illegal and unfair competitive advantage over law-abiding contractors. CBG Board member Pete Braun and CBG General Counsel Cindy Buchko were appointed to a Task Force assigned to study the problem and make recommendations. The Task Force has been meeting for several months and will present its first report and recommendations to the Governor and the Legislature in early 2020.
In June 2019, the biennial budget was passed. This budget had substantial funding increases for both vertical and horizontal construction. There was an increase of $467 million to transportation over the two year cycle. There was $1.9B in funding for state building projects, which is a significant increase over the previous two budget cycles. These funding increases were passed with bipartisan support but would not have occurred without a change in Governorship.
On November 20, 2019, Governor Evers signed Assembly Bill 426, now 2019 Wisconsin Act 33, the Worker Safety and Energy Security Act. The Worker Safety Act is critically important to Wisconsin Operating Engineers and any tradesperson that works on pipeline projects. The Worker Safety Act adds pipeline infrastructure projects to a list of critical energy infrastructure that have enhanced the penalties for trespassing and damage to property.Governor Evers did the right thing for construction workers and signed the Worker Safety Act despite the intense opposition from environmental groups.
These are just a few of the highlights for the construction industry from 2019. I am optimistic that 2020 will bring more positive change for the industry.

Industry News and Updates
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From the News Stand
UIAC Reaches Consensus on Changes to State UI Law

The Wisconsin Unemployment Insurance Advisory Council (UIAC) is a ten-member committee comprised of five management and five labor representatives. Every two years, the UIAC is required to submit its recommended changes to the Wisconsin Unemployment Insurance (UI) law for legislative review and consideration.
The UIAC began its formal review of proposals submitted by the general public, the Department of Workforce Development (DWD) - the state agency which administers the UI program, the Management Representatives and the Labor Representatives in March and completed their work in November. During this interim period, the UIAC reviewed 37 separate changes to the Wisconsin UI law.
We were pleased the UIAC rejected proposals that would have eliminated "small business-friendly" UI reforms which were enacted over the past eight years. The UIAC rejected proposals to: 
  • Repeal the Waiting Week for UI Benefits - in 2011, state lawmakers enacted a waiting week for UI benefits. More than 40 states utilize a waiting week to ensure proper processing of UI claims and reduce potential fraud. 
  • Repeal the Substantial Fault Disqualification Standard - in 2013, state lawmakers created a new "substantial fault" disqualification standard in which employees can be disqualified for UI benefit eligibility if they are terminated for "substantial fault" in connection with their work. Substantial fault is defined to include acts or omissions of an employee over which the employee exercises reasonable control and which violate reasonable requirements of the employer.  
  • Repeal the Voluntary Pre-Employment Drug Testing Program - In 2015, state lawmakers created a voluntary program whereby employers may report anyone who either fails or refuses to take a pre-employment drug test that is a condition of the offer of employment to the DWD. If the prospective employee who fails or refuses to take the drug test is a UI claimant, the claimant may accept treatment and remain eligible for UI benefits or reject treatment and be ineligible for UI benefits. 
On the other hand, we were disappointed the UIAC failed to reach consensus on proposals that would establish a clear, consistent and objective standard to define the difference between an employee and an independent contractor under the Wisconsin UI law and clarify the definitions of employee misconduct and/or substantial fault for purposes of determining UI benefit eligibility based on recent court rulings.
The UIAC reached consensus on ten proposed changes to the Wisconsin UI law. While most of the approved proposals are technical amendments to existing law, there are three consensus proposals which beneficially impact small employers. They are: 
  • Creation of Administrative Fund - a segregated fund would be created for receiving employer interest and penalty monies and any other amounts the DWD collects that are not designated for another fund. The purpose of this proposal is to provide consistent treatment for the amounts collected by the DWD and to better ensure that funds paid by employers remain within the UI program. 
  • Convert SIC Codes to NAICS Code - Standard Industry Classification (SIC) Codes would be replaced with North American Industry Classification System (NAICS) Codes. SIC codes are no longer being modified to reflect changes in the economy. SIC and NAICS codes are used to classify businesses into industry group. 
  • Collection of UI Debt - the Wisconsin Department of Revenue (DOR) would be prohibited from collecting debts on behalf of the UI program. This change will ensure employers are not assessed additional fees when repaying their debts. And, this change will ensure that state recoveries of debts owed to the UI program continue to be maximized for the benefit of the UI Trust Fund. 
The UIAC "agree-upon" changes to the Wisconsin UI law will be submitted for legislative review and approval early next year.

Helping Small Employers Establish Internship Programs

Recently, University of Wisconsin (UW) System and the Wisconsin Economic Development Corporation (WEDC) launched the Talent Generator  - a website designed to help small and medium-sized companies develop and sustain successful internship programs.
According to the UW System, more than half (56%) of all seniors at UW System colleges and universities participate in internships or other career-related field experiences and a high percentage of the students who receive internships at UW are offered full time jobs by the companies that recruit them.  

State High Court Clarifies Scope of Wisconsin Theft Law

On December 4th, the Wisconsin Supreme Court issued a decision that clarifies the scope of the state's theft law. The facts of the case are:
Between January 10 and January 25, 2017, Autumn Lopez and Amy Rodriguez together committed seven retail thefts. Lopez was an employee at Wal-Mart. The State alleges that Lopez pretended to assist Rodriguez at a self-check-out register. Lopez allegedly pretended to scan merchandise for Rodriguez. Rodriguez would then exit Wal-Mart with her stolen merchandise. The seven retail thefts ranged in individual value from $126.33 to $313.95. The total value of all the stolen merchandise was $1,452.12.
On February 16, 2017, the State filed criminal complaints against Lopez and Rodriguez. Instead of charging Lopez and Rodriguez each with seven separate class A misdemeanor retail thefts, the State charged Lopez and Rodriguez with, as parties to the crime, a single class I felony count of retail theft of items valued at more than $500 and less than $5,000.
Lopez and Rodriguez each separately moved to dismiss the complaints, arguing that the State could only charge them with seven misdemeanors. The Green County Circuit Court granted both motions to dismiss. The presiding Judge concluded that the State may not charge multiple acts of misdemeanor retail theft as a single felony. The Court of Appeals reversed and concluded that the State may charge multiple acts of retail theft as one continuous offense.
The Wisconsin Supreme Court accepted jurisdiction of this case and agreed to decide whether the statutory term "theft" includes the statutory charge of retail theft. Writing for the Court's majority, Supreme Court Justice Annette Ziegler said, in part:
"We conclude that "theft" under Wis. Stat. § 971.36 includes retail theft under Wis. Stat. § 943.50. We therefore conclude that the State has authority to charge multiple retail thefts under § 943.50 as one continuous offense pursuant to § 971.36(3)."
Theft is a serious bottom-line problem for Wisconsin retailers. We are pleased that the Wisconsin Supreme Court affirmed the authority of local prosecutors to pursue felony convictions against individuals who commit multiple acts of retail theft.

Wisconsin Lawmakers Propose Online Information  Clearinghouse for Small Businesses

Recently, State Senator Jennifer Shilling (D-La Crosse) and State Representative Robyn Vining (D-Wauwatosa) introduced legislation that would require the State of Wisconsin to establish an online clearinghouse of information relevant to small businesses. At a minimum, the new website would be required to include information relating to the: 
  • requirements for small businesses to obtain from the state or a local government any license, permit, or other authorization; 
  • requirements for small businesses to pay any tax, fee, assessment, or other charge imposed by the state or a local government; 
  • economic development programs that may offer benefits to small businesses; 
  • bidding opportunities for small businesses to participate in state and local government contracts; and 
  • courses of instruction, networking opportunities, and other events or opportunities encouraging the establishment, development, and expansion of small businesses.
These lawmakers rightly noted that many state government agencies work to help small businesses in different ways. However, much of this information is disconnected, and the effort is not coordinated to best fit the needs of small business owners. 
Requiring all state government agencies to work together and merge information to an easy to use one-stop shop website for small employers is a worthy objective.

Status of Business in the Wisconsin State Legislature

Throughout each two-year legislative session, the Legislative Reference Bureau provides regular updates on the status of legislative action. As of this writing: 
  • 682 bills have been introduced in the State Assembly and 618 bills have been introduced in the State Senate; 
  • 41 Assembly Bills and 39 Senate Bills were approved by the Wisconsin State Legislature; 
  • 31 Assembly Bills and 38 Senate Bills were signed into law by Governor Evers; and 
  • 11 bills were vetoed and 1 Assembly Bill (biennial budget bill) was partially vetoed.
Most of the bills signed into law by the Governor were modest in scope and all were approved with strong bipartisan support. The notable exception was the biennial budget bill which was approved by legislative Republicans and signed into law by the Governor with limited vetoes.
At the start of this year, we predicted that it would be difficult for a new Democrat Governor and a Republican-led Legislature to find common ground on public policy matters and that has proven to be true. We expect this trend to continue in 2020.

Foxconn and the State Discussing Contract Revisions

The original agreement between Foxconn Technology Group (Foxconn) and the State of Wisconsin had two key elements. They were: 
  • Foxconn pledged to invest up to $10 billion to construct an advance manufacturing facility in Racine County and create up to 13,000 full-time jobs with an estimated average salary of $53,875 over a six-year period; and 
  • The State of Wisconsin would provide up to $3 billion in tax incentives to Foxconn based on the amount of capital invested and the number of jobs created by the company.
This July 2017 agreement was subsequently transformed into a performance-based contract. Since then, Foxconn has scaled back its plans and the Evers Administration wants to renegotiate the contract.
Recently, Foxconn confirmed that the company is "in discussions with the State regarding our commitment to bring substantial impact to Wisconsin's economy, workforce and educational institutions." 


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