FREQUENTLY ASKED QUESTIONS ON STATE PREVAILING WAGE
Whether you are just starting out as a prevailing wage contractor or just looking to keep yourself updated, we have compiled these resources about state prevailing wage. Here are the most common questions of prevailing wage contractors and workers to help expand your knowledge!
Alaska is considered as a Little Davis-Bacon state, and its state-funded government projects are governed by the state laws under the Little Davis-Bacon Act. The act establishes the prevailing wage rates, as well as some requirements that contractors must accomplish when working on public construction projects.
Below are some commonly asked questions by contractors who are working or are planning to work for public constructions projects in Alaska.
What is the Little Davis-Bacon Act and is it different from the Davis-Bacon Act? . . .
The Little Davis-Bacon Act refers to a set of state laws that dictates minimum wage and other required benefits for prevailing wage workers, working under contracts for public construction projects awarded by the State of Alaska that exceed $25,000. The prevailing wage rate is applicable to construction-related workers. The prevailing minimum wages schedule is being published by the Alaska Department of Labor and Workforce Development (DOLWD), twice a year.
The Davis-Bacon Act applies to federal public works projects, whereas the LDBA applies to state projects. There may be instances when a construction project is funded both by federal and state funds. In this case, the contractor must comply with the most strict or binding provisions of the two laws.
Does the Little Davis-Bacon Act require the same prevailing wages statewide?. . .
No. Prevailing wages vary across the two primary regions of the state: Northern Alaska and South Central Alaska.
How do I calculate the overtime pay of my prevailing wage workers?. . .
Overtime pay for prevailing wage workers is equal to 1.5 times of the worker’s basic hourly pay rate. A worker’s fringe benefits must be paid for all the hours that he has worked, but not to be multiplied by 1.5 if overtime was incurred. Hours considered as overtime work are those hours worked after 8 hours in a given day, or after 40 hours in a given week.
How is overtime by weighted average calculated?. . .
Overtime pay can be calculated in a week. You must first count all the hours the employee has worked, across all applicable job classifications in the week. This can include all works done in the public and private sectors. Add all the wages incurred for the week, at all the different rates applicable. Divide the sum of the straight-time wages by the total hours worked for the entire week. This computation will give you the straight-time average for the week.
The rate is then divided by two to get the half-rate, and the half-rate is multiplied by the total overtime hours incurred for the week. The resulting product will thereafter be added to the total of straight-time wages earned by the worker for that week.
There are employees who work under more than one job classification, with different pay rates. How do I pay these employees? . . .
Employees working under more than one job classification must be paid the minimum prevailing wage rate for each classification he has worked on that week. As a contractor, you have the option to break down specific hours and apply the applicable classification rate, or you may pay the worker with the highest applicable rate for all the hours he has worked. If you choose the first option, you must pay overtime hours using the weighted average of all the straight time rates of pay.
What is a Certified Payroll and why is it needed?. . .
A Certified Payroll is a specially formatted payroll. It contains the name of the workers, the number of hours they have worked, and how much they were paid. The Certified Payroll also contains legal information and must have the original signature of the company’s representatives,
These make up the Statement of Compliance, which confirms that:
· All employees were properly paid, without any kickbacks to the company;
· All employees in the list were paid an amount not less than the prevailing wage;
· All fringe benefits are complied and given to the employees, either paid fully in cash to the employees or paid to bona fide fringe benefit plans;
· Only lawful and allowed deductions were made;
· The contractor complies with the resident hire state laws;
· And all apprentices are duly registered with the US Department of Labor. The owner or operator of the contracting company must be listed in the certified payrolls. It can be a sole proprietorship, partnership, or an LLC.
The law requires that all subcontractors and contractors file certified payrolls with the Alaska DOLWD
How often should I pay my prevailing wage workers?. . .
You must pay their wages in a weekly basis.
Who are qualified for Per Diem?. . .
If non-domiciled wage workers are not provided with room and boarding, they must be paid a per diem of $75. If in the event that room is provided but without boarding, they must be paid a per diem of $36 per day. A non-domiciled worker is defined as an employee who is living more than 65 miles from the midpoint of the project for at least a year prior to the awarding of the contract.
Where can I find the Alaska DOLWD project number?. . .
It will be emailed to you through the LSS Online Services. You must submit your Notifications of Award to the DOLWD before your project number will be assigned to you.
What should I pay my employee during his learning/training stage?. . .
You must pay your prevailing wage worker with the published prevailing wage, unless he is enrolled in an approved apprenticeship program and duly registered with the Department of Labor’s Office of Apprenticeship.
I want to register my employee as apprentice. Where do I register for an apprenticeship program?. . .
Contact the office of the U.S. Department of Labor, Office of Apprenticeship at (907) 271-5035. 4, to register your employee as an apprentice.
How much should I pay my foreman?. . .
You must pay your foreman, who does hands-on work, with the prevailing wage for the applicable work classification(s), including fringe benefits.
Is my foreman and supervisor exempt from overtime pay?. . .
There are very specific conditions to be met for an employee to be classified as exempt from overtime. For more information, inquire with the nearest Wage and Hour Division Regional Office.
I am not sure if my project is subject to the prevailing wage requirements. Where can I check?. . .
Contact the Wage and Hour Regional Office in the region where the project is located.
What will happen if I, the contractor, fail to pay my employees appropriately?. . .
The DOLWD will intervene and enforce an action to collect the due wages for your employees.
What actions are taken against violating contractors?. . .
Contractors who fail to pay their obligations to their wage workers may be debarred from working on Little Davis-Bacon Act projects for three years. A prime contractor can be debarred due to the subcontractor’s violations.
What are the common violations of government contractors?. . .
Below are the common violations of government contractors:
· Failure to pay proper prevailing rates for the classification worked by the wage workers;
· Failure to keep records of hours worked by the wage workers in each classification;
· Failure to pay the correct fringe benefit amount to the wage workers;
· Failure to pay prevailing rates on covered projects awarded by private, nonprofit corporations that are recipients of state grant money and use the funds for public projects;
· Failure to pay filing fees and to submit all required forms pursuant to AS 36.05.045, to the Department.
Am I required to post the minimum wage rates for each classification of wage workers??. . .
Yes. The schedule of prevailing wages must be posted in a prominent and accessible place at every project work site, where it can be seen by your employees.
I am an officer or shareholder of the company. If I perform hands-on work on a project, should I be paid prevailing wage and be included in the Certified Payroll?. . .
Yes. As the corporation and LLC structure creates a separate legal entity for liabilities, the owners are considered employees of the company. Owners must be paid same as the employees.
How long should I keep payroll records?. . .
You must keep your payroll records for three years.
Can I put my wage workers’ fringe benefits contribution into a benefits plan, without my workers’ permission?. . .
Yes. But only if it is a bona fide fringe benefits plan, and should be acceptable to the IRS, and meets requirements under the Employee Retirement Income Security Act of 1974.
Do I need to pay any fees when working for public construction projects?. . .
Yes. Before your start a public construction project, you must file a Notice of Work with the DOLWD and pay all applicable filing fees through the LSS Online Services.
How much are the filing fees and when should I pay them?. . .
The filing fee is one percent (1%) of the total contract amount. The total contract amount includes all subcontract work, up to a maximum fee of $5,000.00. Only the prime contractor is required to pay the filing fee, which is applicable to public construction contracts worth more than $25,000.
You must pay the fee no later than 14 days after the work began.
What if I fail to pay the filing fee and submit the Notice of Work, but my company has already started work?. . .
The DOLWD will ask the agency you are contracting with to withhold the funds of the contract or project until and unless the Notice of Work has been duly filed.
Do I need to submit any forms upon completion of the project?. . .
Yes. You must file a Notice of Completion (NOC) upon completion of your public construction project. It can be done online through the LSS Filing Services. Note that additional filing fees may be required as a result of increased contract amounts.
Do I get a refund on the filing fees I paid if the original contract was modified and the value of work was decreased?. . .
You will receive any applicable refund, which is usually reconciled at the completion of the contract and with the filing of the “Notice of Completion”.
Work with ARCHER JORDAN for your Government Construction Projects in Alaska.
We know that construction projects entail a lot of work, and ensuring that you are compliant with state prevailing wage laws can be daunting. ARCHER JORDAN is a team of fringe benefits experts who can help you ensure that you are LDBA compliant. You can focus on getting the project done, while we help you create the plan that will give the appropriate benefits and compensation to your wage workers.