Construction Update: Union Reduction and Prevailing Wage Repeal


The first Kentucky legislative session of 2017 has brought with it significant changes for those involved in the construction industry.  On January 9, 2017, Governor Bevin signed bills to implement a “right to work” law in Kentucky and to repeal Kentucky’s Prevailing Wage laws.  These laws represent sizable shifts in the legal landscape impacting those in the construction industry.  The bills, SB 6 and HB3, have been fought over in the past by the Kentucky legislature in various forms.  Their passage into law moves Kentucky from a historically pro-labor state towards a pro-business state.

  1. SB 6 makes Kentucky what is commonly referred to as a “Right to Work” state. Kentucky now joins 26 other states in the U.S. that have similar right to work laws.  These laws require unions to negotiate on behalf of both union and non-union employees and prevent an employer from discriminating against an employee based upon his lack of union participation.  These “Right to Work” laws are controversial and considered to negatively impact compensation levels for both laborers as a result of a reduction in collective bargaining. Yet supporters of “Right to Work” laws believe “right to work” laws will attract new jobs and commerce to the state and, in turn, create additional demand for labor. SB 6 amends KRS Chapter 336, among other sections.  A draft of the bill can be found here.
  2. HB 3 repeals Kentucky’s Prevailing Wage laws. Prevailing wage laws set minimum payment limitations for classes of laborers on state construction projects.  Kentucky joins 20 other states that have no prevailing wage laws.  Prevailing wage proponents argue that the laws protect fair wages for laborers on public work projects.  Opponents, however, argue that the wages are inflated and increase the overall cost of construction.  The bill terminates the Kentucky Prevailing Wage Board, and contains language limiting city’s abilities to implement prevailing wage requirements.  A draft of the bill can be found here.

Whatever your legal needs, feel free to contact Nick Wallingford at Wallingford Law, PSC; [email protected]; (859) 219-0066.

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