Hispanic Contractors Foundation Chairman Pedro Alfonso Testifies Before City Council on:
Chairman McDuffie and members of the Committee, my name is Pedro Alfonso, and I am here today providing testimony on behalf of the Metro DC Hispanic Contractors Association (MDCHCA). We are a member driven construction association comprised of over 200 contractors of mostly Hispanic, Brown and Black immigrants, that are primarily small businesses. Our mission is to provide training, technical assistance, and marketing opportunities for our members. To raise the level of our commitment to the community we plan to one day advance these efforts with our own Construction Trades Academy here in DC under our recently formulated community non-profit organization.
We are here today to provide support for the legislative initiative of The “Electric Utility Underground Work Wage Act of 2021”. This proposed legislation can provide much needed financial relief for the hard-working construction labor force operating in the underground utility space of the construction industry. Many rank and file workers are underpaid for the type, complexity and level of risk taken to do this type of underground work. Therefore, raising the requirement for their pay scale warrants this body’s consideration.
While the MDCHCA is in support of such advancement in pay we are concerned in many ways that the burden of pay will fall on the small business community that are already struggling to stay in business and survive. There are four matters we are asking the Council to consider in their deliberations on this bill.
- First, not rush the implementation. The increases should be phased in over time so that the required “administrative systems” could be developed to appropriately address this multilevel change in pay. Our members need time to ensure that they can develop the administrative systems to pay those rates once implemented and be able to prepare and submit any required reports such as “Certified Payrolls” that are often part of the process. The resultant contract modifications must happen in a timely manner to avoid cash strains on small businesses. The industry will also need an education to reduce the confusion.
- Second, resolve the issues regarding setting the project size at $250K. There are still many details to be resolved in the application of project size to trigger a prevailing wage. For instance, is the threshold of $250K for a single job or is it for cumulative projects over time within the same utility? What if bids have been submitted and the delivery is over several years. Will cost adjustments be immediate for these large projects and include all cost burdens a business must carry including project management, employee benefits, and overhead costs? We don’t believe that those issues have been resolve in any cost impact analysis.
- Third, pay compression should be considered and analyzed. There is a relationship in pay scales for all positions and titles within any organization. How will an existing or even multiyear contract compensate businesses for the pay compression that is likely to occur within the ranks of the construction staff. This will occur when those hourly rates for those specific categories of workers increase at such a fast pace. The utility company should fairly and earnestly be willing to adjust contracts to mitigate such a likely issue. Will all unit cost contracts be renegotiated? The cost for any adjustments in staff equity maybe di minimis to the ratepayer that will have to ultimately carry this cost in higher utility bills, to the city that will collect higher tax dollars for the rise in cost of infrastructure projects, and for the utilities that are positioned to receive their industry norm ROI, but I assure you, small businesses cannot past any of these higher cost to anyone one else.
- Fourth, positioning the DC unit that will have oversight. our members are the local businesses that play by the rules, and we wouldn’t want to lose out to outside competition that often do not do the same. We would support the DC Department of Employment Services (DCDOES) having the oversight responsibilities. In this manner they would insure an equitable adherence to the law by all contractors. Yet, they need time to install, increase and train the staff for this type of new inspection. Therefore, ensuring a level playing field through an equitable enforcement mechanism that DOES can implement is important and having one that is at the right level of staffing and training probably can’t be immediate or at least an overnight miracle. The timing of the implementation should be well thought out to be accepted by all parties. This certainly should not take years, but neither is it a matter of a few weeks after the passage.
Our organization is in support of higher wages for our employees so that they can keep pace with inflation and our own members want to be able to attract and retain an experienced work force that would be willing to work in our city which is already in short supply of skilled labor. All construction workers with their higher skills should be duly compensated, in particular, those performing outside underground work, which is even harder, riskier and more physically demanding. A higher more competitive rate of pay for this work is warranted. But it needs to be implemented with proper forethought to reduce confusion and chaos in the ecosystem of our membership of the small business market.
This concludes the MDCHCA testimony. We thank you for this opportunity to share our comments.