OAH 7-1900-17022-1
STATE OF
OFFICE OF ADMINISTRATIVE HEARINGS
The Minnesota Department of Labor and
Industry (Department) proposes to adopt the above-entitled rules, as modified by
a version dated August 10, 2006, pursuant to Minn. Stat. § 14.16 and Minn. R.
1400.2240, subp. 4. The initial version
of these proposed rules, published on January 17, 2006, was presented at a
public hearing on February 22, 2006. The Administrative Law Judge disapproved the proposed
rules in a Report dated April 21, 2006.
The Chief Administrative Law Judge, by Report dated April 24, 2006, concurred
with the determination of the Administrative Law Judge. On October 3, 2006, the Department requested
that the Chief Administrative Law Judge review modifications to the rules that
had been disapproved. For reasons
discussed in the attached Memorandum, the Chief Administrative Law Judge finds
that the final proposed rules are substantially different from those published
in the State Register on January 17,
2006, and proposed at the public hearing.
Based upon a review of the
modifications made by the Department as presented in the October 3, 2006
submissions and filings, Minnesota Statutes, Minnesota Rules, and the previous
orders issued in this matter,
IT
IS HEREBY ORDERED: that the modified proposed rules, dated August 10, 2006,
are not approved because they are substantially different from the rules as
originally proposed.
Dated
this 10th day of October, 2006.
s/Raymond
R. Krause
________________________________
RAYMOND
R. KRAUSE
Chief
Administrative Law Judge
MEMORANDUM
The Department’s Director
of the Division of Labor Standards and Apprenticeship is required to determine
the journeyman wage rate.[1] The Department seeks to modify the rules
governing this process.[2] A rulemaking proceeding was commenced by a
Dual Notice published on January 17, 2006. [3]
The published version of
the proposed rules would have permitted the Director to use the Minnesota Department
of Employment
and Economic Development’s (DEED) OES medium wage data as one consideration used in
determining the journeyman wage rate for non-prevailing wage work.[4] The ALJ found the proposed rules were
defective because the Department had not demonstrated how DEED’s OES medium
wage rate, which includes wages paid to all workers in a trade, related to the
wages paid only to journeymen. The ALJ
suggested several possible remedies for the defects he found, including a
suggestion that the Department might find the United States Department of
Labor’s Foreign Labor Certification (FLC) program instructive. The FLC uses OES data with adjustments to
reflect the level of experience, education and supervision demanded by an
occupation.
To cure the defects noted in Findings 86 – 108, the
Department’s proposed use of the DEED’s OES median wage rate to determine the
journeyman wage rate needs to be clarified and supported by evidence. If the Department wishes to use DEED’s OES
median wage rate to determine the journeyman wage rate it must demonstrate a
relationship between the OES median wage rate and the wage rate paid to
journeymen in various areas in
taken in the current proceeding. In order to make an appropriate record, the
Department should publish a new Notice of Hearing and document the evidence
required in a new SONAR. Alternatively,
the Department could withdraw the proposed rule and consider a new proposed
rule that would create a dual wage rate using one of the approaches that have
been adopted in other SAC states without using the DEED OES median wage
data. Finally, the Department could withdraw
the proposed rule and continue to use the existing rule.[5]
The modified rule submitted by the Department adds
language that would require the Director of Labor Standards to “adopt the most
current level three wage from the United States Department of Labor Foreign
Labor Certification Program pursuant to the United States Code, title 8,
section 1182(p)(4)” as the journeyman wage rate.[6] This is substantially different from the
multiple factor analysis that was initially proposed by the Department. The published proposed rule would have added OES
median wage data as one of several factors the Director would have considered in
determining the journeyman wage rate.[7] The modified rule would narrow the data considered
by the Director of Labor Standards to only one factor. Furthermore, the Dual Notice did not apprise affected
parties that the Department would adopt the current level three wage determined
by the United States Department of Labor Foreign Labor Certification Program as
the journeyman wage rate. Accordingly,
none of the parties discussed the possible use of the FLC level three wage rate
as the journeyman wage rate in their oral or written submissions. Adopting
the modified rule at this stage of the proceeding constitutes a substantial change in the
rules as they were proposed and presented at the hearing.[8]
R.R.K.
[2] Statement of Need and Reasonableness (“SONAR”)
[3] 30 S.R. 789 (January 17, 2006).
[4]
[5] Report of the Administrative Law Judge, Finding 109 (footnotes omitted).
[6] Modified rule date August 10, 2006.
[7] The proposed rule stated that the journeyman wage rate would have been determined by: a) the bargained rate for apprenticeship agreements where a bargaining agreement exists, b) the prevailing wage base rate pursuant to Minn. Stat. §§ 177.41 to 177.44 where a collective bargaining agreement does not exist and the work is construction work on public works projects funded in whole or in part by state funds, or c) as determined by the Director, considering “existing wage rates in the employer’s area for the trade including the current OES all-industry median wage rate, the current prevailing wage rates…and existing apprenticeship agreements for the trade in the area.” Proposed Rule dated December 21, 2005. See also SONAR at 7.
[8]