Labor agreement bill up for final vote

A bill that would require major city construction jobs to employ unionized workers is up for a final vote before the Honolulu City Council today.

Bill 37, which would require the city to negotiate a community workforce agreement with a union for any contract valued at $1 million or more, has divided the local construction industry.

The measure, initiated by several influential construction union groups including the Hawaii Construction Alliance and the Hawaii Building and Construction Trades Council, would require the city to negotiate a community workforce agreement with a union for construction projects valued at $1 million or more. A community workforce agreement, also known as project labor agreement (PLA), is a form of a collective bargaining agreement.

Those who support the bill say the agreements will ensure those on the job are primarily from Hawaii, are paid decent wages and can be assured of safe working conditions. Because the agreements bar labor strikes or slowdowns, they ensure job site harmony and promote government efficiency, according to the introduction in the bill.

But those who oppose it warn that it could lead to higher contract prices and hurt smaller local businesses, and is unnecessary because the local worker protection provisions it offers are already largely in place in state laws.

Bill supporter Nathaniel Kinney, Hawaii Construction Alliance executive director, said “there’s no way to make sure that local workers are placed on the job” without a project labor agreement in place. “There’s nothing stopping a large, out-of-state contractor from coming down to Hawaii bringing all of their workers with them.”

Kinney noted that PLAs are required for all contracts tied to the city’s $9 billion rail project, the most expensive government project in Hawaii history.

Signs are pointing to a slowdown in the state’s economy and construction work, Kinney said. “What are we doing to make sure local jobs go to local people? By using the union bench, we can ensure that those people who are unemployed first go out first. That’s what a project labor agreement does, that’s what it’s doing on the rail.”

Nonunion, California-­based construction firm Shimmick/Traylor/Granite has the $875 million contract with the Honolulu Authority for Rapid Transportation to put up the elevated rail guideway in the airport area and the stations tied to it.

“Because the rail is covered by a project labor agreement, they signed a letter of assent, they hired local guys off the bench along with some of their core employees and we were allowed to make sure that local workers were working on the rail project because of the project labor agreement,” Kinney said.

Without the PLA, the firm “could have come down here, gotten the rail, and then had a whole bunch of guys from the mainland working on the rail project,” said Kinney, whose organization represents about 15,000 workers in five different trade unions including the Hawaii Regional Council of Carpenters.

Contractor groups including the General Contractors Association of Hawaii and Associated Builders and Contractors, oppose the bill.

Layne Machida, GCA president, said the bill would damage the industry and, consequentially, the state’s economy.

“It would hurt union contractors, it would hurt nonunion contractors, it’ll hurt a lot of small businesses because what the bill basically says is that everybody on the job … whether you’re a subcontractor, a sub-subcontractor or even a project manager, you need to sign up with a union,” he said.

Machida said the 500-plus firms in his group are comprised of both union and nonunion firms. There are certain jobs where PLAs work, but not in every case, he said.

“We really don’t see a need for (the bill),” he said. “Hawaii’s a special place, we work very well with union and nonunion contractors. In fact, a lot of our bids are put together with a combination of union and nonunion subcontractors as part of the team.”

Of the roughly 3,700 total contractors in Hawaii, about two-thirds are nonunion, Machida said. About 88% of them are considered small businesses with 19 employees or fewer, or less than $16.5 million in annual revenue, he said.

Statistics show PLAs add as much 13% to 20% more to a project’s cost, he said.

As for wages, all contractors in Hawaii are required under the federal Davis-­Bacon Act to pay prevailing wages, which are similar to unionized wages, Machida said. The employers are required to log reports showing how much each worker was paid, he said.

“They’re already in place, we don’t need anything more,” Machida said.

The contractor groups disagree with the idea that nonunionized shops are less safe. “Our employees are our most important resource and we pay real good attention to safety on the job.,” Machida said.

Bad safety records result in higher insurance premiums, making it more difficult for contractors — unionized or not — to be awarded jobs, he said.