Notices

The Minnesota Department of Labor and Industry (DLI) is proposing a new rule to update the state’s prevailing wage job classifications.

• New Classification Code: The rule introduces Code No. 704a (Wood frame carpenters) alongside the existing Code No. 704 (Carpenters) in Minnesota Rules, Part 5200.1100.
• Scope of Coverage: The new subpart 4a applies specifically to wood-frame construction, remodeling, or finishing work for residential structures up to six stories tall.
• Exclusions: The new wood-frame classification explicitly excludes structures built primarily with concrete, steel, mass timber, or other non-wood structural framing types.
• Public Comment Period: Written comments on this rulemaking docket are open to the public until 4:30 p.m. on October 28, 2026.

Potential Effects in Minnesota

1. Sub-tier Wage Rates: Under traditional prevailing wage rules, general commercial carpentry (Code 704) sets a single high-tier wage rate across major public works. Establishing a distinct “Wood Frame Carpenters” sub-classification allows DLI to set a separate wage scale that reflects residential/wood-frame market rates, which are typically lower than heavy commercial or steel-frame construction rates.
2. Impact on Affordable & Publicly Funded Housing: State-funded or municipal residential projects (such as affordable housing initiatives up to six stories) may see reduced labor cost estimates if the prevailing wage rate for 704a is set below the standard commercial carpentry rate.
3. Contractor Compliance and Payroll: Contractors working on publicly funded residential jobs will need to ensure accurate payroll reporting. Misclassifying commercial or steel construction as wood-frame carpentry—or vice versa—could lead to prevailing wage audit liabilities.

National Landscape (Other States)

• Federal (Davis-Bacon) Model: The U.S. Department of Labor separates construction into four general categories: Building, Residential, Highway, and Heavy. Federal wage determinations routinely apply separate (and lower) wage rates for residential framing compared to commercial building construction.
• State Practices: Approximately 28 states maintain state-level prevailing wage laws (often called “Little Davis-Bacon Acts”).
• Carve-Out Adoption: Among states with prevailing wage laws (e.g., California, Washington, New York, New Jersey, Massachusetts), splitting labor codes into specialized residential/wood-frame tiers or adopting federal residential schedules for state-funded housing is common. States like Washington and Oregon use specific residential framing rates to align public housing construction costs with the broader market.

Written comments are due to the Commissioner of Labor and Industry by 4:30 p.m. on October 28, 2026.

Questions? Contact Grace Keliher at (651) 646-7959 or info@bamn.org.