Wage Determinations PDF Print E-mail

The US Department of Labor surveys all construction types in each state every three years. Based on the information collected, a "wage determination" which lists wage rates and fringe benefit rates is issued for each class of laborer and mechanic in a given area for a particular type of construction. These wage determinations are included in all federal bid specifications and contracts.

Here's an example of a wage determination listing:

Drywall Rates Fringes
DRYWALL INSTALLER/LATHER.... $ 37.35 10.10
STOCKER/SCRAPPER............ $ 10.00 6.67
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    Contractors bidding on prevailing wage project must be careful to determine the correct employment class for their workers. It is the contractor's responsibility to ensure that he or she is using the correct classification and paying the correct amount of base wages and fringe benefits. Even if a compliance officer has given a contractor a class determination for workers, if the determination is incorrect, the contractor is liable.

  • Contractors are required to pay at least the full base wage and full fringe amounts specified on federal projects.

  • On federal projects, a portion of the base wage can be used to provide fringe benefits for workers, provided the total of the fringe benefits and taxable wages paid equal or exceed the wage determination amount.

  • State regulations regarding prevailing wages vary widely. Some states don't even break out the base and fringe wage. Instead they list a single rate which is intended to include both.

  • Apprentices who work on prevailing wage projects must be enrolled in an approved apprenticeship program which is registered with the US Department of Labor Employment and Training Administration (ETA), or the Bureau of Apprenticeship and Training (BAT), or with a State Apprenticeship Agency recognized by the Bureau. Wages paid to apprentices are specified by the apprenticeship program in which they are enrolled, but generally apprentices are paid a percentage of the specified base wage dependent upon their tenure in the program. However, most programs require that apprentices be paid the full amount of the fringe allocation, regardless of the percentage of the base wage they are paid.

  • Prevailing wage contributions made to a bona fide retirement plan can be treated as elective deferrals for plan design purposes. Taking advantage of this allows owners of companies that do prevailing wage work to increase their own 401(k) contributions dramatically.

    If your company typically makes profit-sharing contributions, prevailing wage retirement contributions can be counted toward that amount, saving your company thousands of dollars. If your company is comfortable with a Safe Harbor plan design, which requires a minimum company match or profit-sharing contribution to all employees, prevailing wage retirement contributions can be counted toward both the profit-sharing contributions and used to increase the amount owners and highly-compensated employees can defer.

    Links:

    Wage Determination
    http://www.wdol.gov/

     

    Get more information on The Contractors Plan.

    The Contractors Plan

    Fringe Benefit Group

    The single-source provider of benefits for hourly employees.