Bill proposes state project prevailing wage database to increase efficiency, curb wage theft

Greater efficiency, transparency and integrity are the key components of a bill to create a payroll reporting portal and database to compile and make available payroll information for state projects covered by prevailing wage requirements.

Current law requires contractors and subcontractors of projects wholly or partially funded by the state to submit certified payroll reports, which are then maintained by project owners that can include state agencies, local governments and school districts.

As amended, HF4543 would not create any new reporting mandates, expand prevailing wage law or change information available to the public.

“What this bill does is modernize the process,” said Rep. Cedrick Frazier (DFL-New Hope) who sponsors the bipartisan bill — two of the three co-sponsors are Republicans. “It directs the Department of Administration to centralize the electronic certified payroll reporting port, a single secure platform where contractors can submit those reports in one place, rather than through fragmented, inconsistent systems across multiple jurisdictions.”

Illinois, New Jersey and New York have similar systems.

Held over Thursday by the House State Government Finance and Policy Committee, the bill would create administrative relief for project owners who collect and maintain payroll reports throughout a project’s duration and respond to the continued increase in data requests. Such requests would go through the centralized database.

This is one of the simplest things the Legislature can do to help cities, said Bradley Peterson, executive director of the Coalition of Greater Minnesota Cities.

Frazier said oversight would be strengthened via the proposal. “Certified payroll reporting is one of the most effective tools we have to protect public dollars by preventing wage theft, worker misclassification, tax fraud and insurance fraud on publicly funded projects.”

Local governments could opt into the portal for non-state funded projects. “Cities with prevailing wage ordinances or labor standard policies like Richfield, Bloomington, Brooklyn Park and Grand Rapids can also benefit through these efficiencies if they choose,” Frazier said.

Opponents are not against the bill’s intent. Their concerns include protecting sensitive employee and licensed trade data, ensuring current software will integrate with a new system and wanting the state to work with contractors in designing the system.

“This puts detailed payroll information at anyone’s fingertips rather than going through a data practices request. We want to ensure that the appropriate safeguards are in place … so their information is not subject to misuse,” said Laura Ziegler, director of highway/heavy and government affairs at the Association General Contractors of Minnesota.

A fiscal note projects a $1.19 million annual cost beginning in Fiscal Year 2027.

Rep. Tom Sexton (R-Waseca) expressed concern about spending money on a new system when the state has a “significant backlog of antiquated software” in current systems that need updating or replacement.