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Section 3: A Roadmap to High -Road <br />Affordable Housing <br />Minnesota recently adopted one of the <br />strongest wage theft laws in the country, and <br />this law has the potential to be a powerful <br />tool to punish employers that steal from <br />workers. Punishment after a crime has <br />occurred, however, is not sufficient. Greater <br />emphasis on prevention is needed to root out <br />the problem. <br />Prevailing wage policies are an important <br />tool for preventing exploitation of vulnerable <br />workers. Greater employment transparency <br />and a fair wage floor vastly reduce the risk of <br />problems on publicly -subsidized projects. <br />In fact, almost all of the evidence that we <br />have gathered is tied to projects that do <br />not carry prevailing wage requirements. <br />Expanding and fully enforcing prevailing <br />wage requirements would be an important <br />first step. <br />TIF "clawback" policies are another critical <br />tool in the fight against worker exploitation <br />on publicly financed projects. These allow <br />local units of government to force recipients <br />to repay TIF subsidies when the terms of the <br />TIF agreement are violated. For example, <br />in Richfield, "fail[ure] to comply with labor <br />laws" is considered an Event of Default for a <br />TIF agreement.b' This is a critically important <br />policy and should serve as a model for other <br />TIF authorities. This creates a substantial <br />disincentive for exploitation. <br />Prevailing wage and TIF clawback policies <br />are vital tools in the effort to root out <br />exploitation, but they are not enough. <br />Contractors that violate the law frequently <br />go unpunished because many workers <br />are too afraid for their jobs or residency <br />status or, in the worst cases, their safety <br />61 Article IX q from exam le TIF agreement under Events <br />of Default, City ofRichld, document httpps://drive. oo le. <br />com/file/d/I7oLQjeoSxj2G7rZY6RSSDApPM7CvaxQSO/ <br />view?usp=drive_ ink. <br />to file a complaint or provide testimony. <br />Further, developers that routinely employ <br />such contractors almost never face legal <br />consequences for the mistreatment of <br />workers on their projects. Exploitation of <br />vulnerable workers is unlikely to end until <br />state and local governments begin to hold <br />project developers accountable for conduct <br />that occurs on their jobsites. <br />While our policy recommendations primarily <br />focus on increasing standards tied to public <br />financing, we also suggest important actions <br />municipal leaders can take to prevent wage <br />theft on all construction projects. Minor <br />policy changes at the permitting level to <br />increase transparency and oversight of <br />projects could have a major impact on <br />preventing crime on multi -family housing <br />projects. <br />3.1 PREVENTION AT THE STATE <br />LEVEL <br />Affordable housing developers that <br />repeatedly allow wage theft and human <br />trafficking and fail to maintain safe <br />workplaces need to be held accountable. It <br />is far too easy for them to pass the buck to <br />construction contractors on publicly financed <br />projects where labor exploitation occurs. <br />Additionally, we should not allow contractors <br />that cheat or exploit workers to profit from <br />publicly financed projects. <br />To increase public transparency on publicly <br />financed projects and to prevent wage theft <br />and exploitation, the legislature should make <br />modifications to increase transparency and <br />create a framework for disqualification from <br />receiving funds for egregious behavior. <br />18 North Star Policy Action <br />