HF3878

Purpose

This bill seeks to raise and standardize wages for workers at Minneapolis–St. Paul International Airport (MSP) and related airport locations. It creates a new requirement called the quality service wage (QSW) and strengthens enforcement, with penalties for violations. The goal is to ensure airport workers receive wages and benefits that align with federal service contract rules and local airport contracts.

Key definitions and scope

• Covered airport or related location: MSP (including its facilities) and public airports managed or supervised by the Metropolitan Airports Commission (MAC), plus property MAC owns at MSP.
• Covered airport or related location employer: any person or entity employing workers at these locations, or who contracts with another to provide food prep or delivery service for airplanes departing from these locations.
• Covered airport or related location worker: anyone who works at these locations (with time spent there accounting for at least half of their workweek), including those who prepare or deliver food for flights. Independent contractors and certain executive/administrative/professional staff are excluded.
• Not covered: the U.S. government, MAC itself, or other local/state political subdivisions.

What the bill requires (Quality Service Wage)

• The new wage standard is called the quality service wage (QSW), defined as the combined hourly wage and benefit rate designated by the state to match what is required under the McNamara-O’Hara Service Contract Act (SCA) for the local area and job type.
• Starting July 1, 2026 and each July 1 thereafter, the QSW must be at least the greater of: 1) the applicable minimum wage rate set by MAC (including MAC contracts or licensing agreements), 2) the health and welfare benefits rate determined by the SCA (as applied to the relevant geographic region), and 3) the local guard SCA wage determination, as applicable.
• Beginning every covered airport location, employers must pay workers at least the QSW.

Supplemental benefits

• In addition to wages, the health and welfare benefits portion must be adjusted annually to the rate specified by the SCA for the relevant region.

Penalties and enforcement

• If an employer violates the QSW provisions, the state may impose a civil penalty of at least $1,000 and up to $10,000 per violation (in addition to penalties already available under current law).
• The amount of the penalty will consider factors like the employer’s size, business context, good faith, seriousness of the violation, prior violations, and whether other requirements were not met.

Compliance orders and dispute resolution

• The state labor commissioner can issue compliance orders requiring an employer to follow the specified wage and related requirements.
• Orders can reference multiple sections and rules; if a violation is found to be repeated, enforcement can escalate.
• Employers may contest the order within 15 days by filing a written objection; if no objection is filed, the order becomes final.
• A contested case process is available, following the established administrative procedures.
• For purposes of enforcement, a contractor that has taken on a subcontractor’s liability is treated as an employer.

Effective date and practical impact

• The QSW and related enforcement provisions take effect on July 1, 2026, with annual updates to reflect changes in SCA-based determinations and MAC-related wage standards.
• This represents a significant change in how airport workers at MSP and related locations are compensated, tying wages to federal SCA and MAC-established rates and requiring regular updating.

Significance and potential impact

• Establishes a uniform wage floor for a specific group of airport workers, anchored to federal and MAC wage determinations.
• Strengthens enforcement mechanisms and introduces a formal process for challenging orders.
• Could increase labor costs for covered employers but aims to improve wage levels and benefits for workers in airport service roles.

Relevant changes to existing law - Adds a new wage standard (Quality Service Wage) for covered airport workers, linked to SCA wage determinations, MAC minimums, and health/welfare rates. - Expands the use of compliance orders and clarifies enforcement timelines and procedures. - Creates penalties for noncompliance and requires annual updates to the wage rate.

• Note: The bill specifically targets MSP and related airport locations under MAC, not general airport or non-airport workplaces.

Relevant Terms - quality service wage (QSW) - covered airport or related location - MSP (Minneapolis–St. Paul International Airport) - Wold-Chamberlain Field - Metropolitan Airports Commission (MAC) - McNamara-O’Hara Service Contract Act (SCA) - General Services Administration (GSA) wage determinations - health and welfare benefits - SCA wage determinations (regional) - local guard SCA wage determination - compliance order - penalty (civil penalty) - two-year look-back (repeat violation consideration) - contractor liability / subcontractor liability - wages and supplements - health and welfare rate - minimum wage (MAC-related) - enforcement process (notice and objection window) - contested case proceedings