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!
The Washington Prevailing Wage Law is covered by The Washington State Public Works Act (WSPWA) which requires that government contractors pay their employees prevailing wages for all public work. The Washington State Department of Labor and Industries (WDLI) is responsible for determining the prevailing wage rates.
Read on for more information on the prevailing wage laws of Washington.
What is prevailing wage?. . .
Prevailing wage refers to the wage or salary of men who work in public construction and maintenance works. These projects are funded by the state. It is an hourly wage, plus fringe benefits and overtime pay, paid to majority of workers and laborers doing the same line of work.
How are prevailing wage rates in Washington established?. . .
The Industrial Statistician of the WDLI is responsible for determining prevailing wage rates in Washington. A survey is conducted where contractors and labor unions are invited to submit the hourly wages of their prevailing wage workers. The prevailing wage is the wage of the majority of the workers under the same trade classification, in the largest city in a county. If there is no common wage, an average is determined. Survey is usually conducted every three years.
Calculation of prevailing wage rates can be done as follows:
· Largest City in County—Majority Wage: If more than one-half of all hours reported in the largest city in a county are worked at one wage rate, then that rate becomes the prevailing wage for the whole county.
· Largest City in County—Average Wage: Should there be no majority rate, a weighted average wage is determined with the use of data from the largest city in a county. The weight is the total number of hours worked at that wage.
· County Average: Should there no hours be reported in a county’s largest city, the weighted average wage is determined with the use of countrywide info.
· Existing Wage Rate—Remains in Place: Should there be no data reported for the whole county, the old prevailing wage will subsist.
How should I pay my prevailing wage workers for joint state and federal projects?. . .
In projects covered by both state prevailing wage law and Davis-Bacon Act, you must pay your employees with the higher wage rate.
What are the instances where I will pay less than the prevailing wage rates?. . .
There are four instances or situations where you may pay less than the determined prevailing wage rates. These are:
a. Apprentices - These are workers who are registered in a state approved apprentice program. IF registered with the WSATC, the apprentice will be paid the prevailing wage rates entitled to apprentices of a given trade. If not registered, then you must pay him the full prevailing wage entitled to a journey-level worker.
b. Vocationally Handicapped Workers- These are workers whose ability to earn is impaired by a physical or mental defect, or an injury. A certificate issued by the L&I determined the reduced wages for handicapped workers working in public works projects.
c. Sole Proprietors, Partners, Officers, Owners - Owners, partners with at least 30% ownership, and officers with at least 30% ownership doing hands on work on public works projects are not required to pay themselves with the prevailing wage rates.
d. Public Employees - Workers are employed but the state is exempted from the requirements of the prevailing wage law.
How much should a public construction cost in Washington so that prevailing wage regulations will apply?. . .
There is no threshold to public works contracts for prevailing wage laws to apply.
What is the timing of wage determinations and increases, if any?. . .
The prevailing wage rate of a project are determined in the project bid due date, unless the contract award states six months or more after the bid due date. In such cases, the award date will determine the prevailing wage rates to be used.
Updates in the prevailing wage rates are published twice a year: on the first business day of February and August. The rates will be effective 30 days later after date of publish.
Is there a regulation regarding overtime in the Washington prevailing wage law?. . .
Special overtime rates are determined for each trade classification in the WSPWA. The law has established an eight-hour workday for public works projects, unless there is a worker-employer agreement for a 10-hour workday, which should be entered voluntarily by the worker.
A contractor who violates overtime provisions will be fined at a minimum of $25 and a maximum of $200, or imprisoned for at least 10 days, or 90 days at most.
Is there a special rate for work incurred on weekends?. . .
Work performed on weekends are subject to overtime pay for a given trade classification.
Is there a special rate for work incurred on legal holidays in Washington?. . .
Special holiday rates are established for each trade classification. The wage determinations have the applicable holidays for each trade.
Is there a different rate for each working shift?. . .
Washington prevailing wage law does not mandate different pay for different working shifts for each trade classification. CBA’s may however, have shift differential rates that can vary by county and by trade classification.
What are fringe benefits or usual benefits?. . .
Fringe benefits may include:
• Contributions made by a contractor/subcontractor to a third party under a fund, plan or program.
• Medical/hospital care
• Pensions on retirement/death
• Compensations for injuries/illness resulting from occupational activity
• Insurance, including unemployment benefits, life insurance, disability, sickness insurance, accident insurance, medical
•Vacation and holiday pay
•Approved apprenticeship/similar training programs
•Other bona fide fringe benefits
If you choose not to provide these usual benefits, then you must pay the total prevailing wage rate as an hourly wage.
Am I required to make training contributions?. . .
Yes. These are included in the fringe benefits as stated above.
I want to hire apprentices in my prevailing wage project in Washington. What should I know before hiring one?. . .
Apprentices (registered under a state-approved apprenticeship program) employed in public works projects must be paid at least the prevailing hourly rate for an apprentice of that trade. Apprentices not registered in training program shall be considered as a fully qualified journey level worker, and, shall be paid at the prevailing hourly rate for said classification.
Do I need to pay for travel and subsistence of my prevailing wage workers?. . .
No. Washington prevailing wage law does not mandate you to compensate for your prevailing wage workers’ travel and subsistence.
As a contractor, what are the licenses that I need?. . .
To be able to take on public work projects in Washington, you must be registered with the WDLI. Your electricians and plumbers must also be licensed.
In addition to all these, what are my other duties as a contractor?. . .
a. Keep and Maintain Payroll Records.
These records must show the worker’s name, address, Social Security number, trade classification, straight-time rate, fringe benefit and OT hours worked, including agreements on 10-hour work days (if applicable), and the actual wages paid. Payroll records must be kept accurate for three years, following acceptance and award of the project.
b. Wage Statements.
An itemized statement that indicates time worked, rates of pay, gross wages, and a list of all deductions must be provided.
c. Contractual Obligations.
You must abide by the terms of the contract you entered.
d. Intent and Affidavit Forms.
You must submit Intent and Affidavit forms (approved and certified by Labor & Industries) to the agency administering the contract in order to receive payment. Intent should be filed prior the start of work, while affidavits are filed upon work completion.
An approved copy of your Intent form must be posted at the job site prior to the start of work for contracts in excess of $10,000.
What are the penalties for erring and violating contractors?. . .
First Offense—Underpayment of prevailing wages
Any government contractor or subcontractor found to have violated the requirement of prevailing wage laws must pay a civil penalty of not less than $1000 or up to 20% of the total prevailing wage as indicated in the contract, whichever is greater. In addition, an erring government contractor shall not be allowed to bid, or be considered for bidding on federal projects, if and until the penalty has fully paid to the director.
Second offense—Underpayment of prevailing wages
If a government contractor or subcontractor is found to have violated the prevailing wage law for the second time within a 5-year period, the contractor or subcontractor shall be subject to the sanctions prescribed in this subsection and shall not be allowed to bid on any public works (debarred) contract for two years.
Washington Government Contractors Choose ARCHER JORDAN for Assistance with Compliance to WA Prevailing Wage Laws.
ARCHER JORDAN is a third-party fringe benefit expert that has helped thousands of companies in prevailing wage law compliance. Our decades of experience assure our clients that the customized benefits plans we create are not only state and federal law compliant, but are also especially created to suit the needs of their prevailing wage workers.
Contact ARCHER JORDAN today for more details on how we can help you as your chosen third party fringe benefits specialist.