Prevailing Wage Contract Thresholds Per State

Prevailing wage  laws are laws that require state contracted workers to be paid the same wages customarily paid to those in the private sector. 32 states have prevailing wage laws currently intact and four states have increased their contract values since 2006. One state, Wisconsin, has actually lowered its contract value since 2006. Every state has different thresholds that determine when their laws go into effect. There are 18 states, mostly in the South or Midwest, that don’t have prevailing wage laws. Nine of them because they’ve repealed their laws and eight of them that simply never had any such law. However, remember that the Davis Bacon Act applies to ALL states.

Check out the states Wage and Hour Division Here

States with prevailing wage contract thresholds generally apply their laws when the project’s contract value meets or exceeds a pre determined threshold amount. When projects fall below the threshold, they’re not required to pay the prevailing wage. Connecticut’s threshold for new construction is high at $400,000 and only Maryland’s is higher. Connecticut’s threshold for remodeling is $100,000. Indiana, Kentucky, Maryland and Vermont’s remodeling thresholds are higher but identical to their new construction thresholds. There are nine states that generally apply prevailing wage laws to all their public projects. They are: Illinois, Massachusetts, Michigan, Missouri, Nebraska, New York, Texas, Washington and West Virginia.

of the 18 non prevailing wage states, eight of them have never enacted any such law and nine of them have repealed their laws during the majority of the 1980s (1979-1988). New Hampshire is the only Northeastern state without a prevailing wage law. They repealed theirs in 1985. This was due to the prevailing rates skyrocketing the price of a school’s project and causing contractors to not bid on another project. Florida was the first state ever to repeal its prevailing wage law in 1979.

6 Ways the Affordable Care Act Could Cost Federal Contractors More

Six Ways the Affordable Care Act Could Cost Federal Contractors More

The impending health insurance reform leaves federal contractors facing major cost increases. President Obama signed the Patient Protection and Affordable Care Act (PPACA or Act) into law on March 23, 2010. Besides the politics surrounding the law, the Act raises cost and compliance implications for federal contractors significantly. Many federal contractors are unaware of theSix Ways the Affordable Care Act Could Cost Federal Contractor's More  impending changes and costs that are about to happen due to the Act. Enrollment in exchanges are set to begin October 2013 and key provisions of the Act become effective in January 2014 all following affirmation of the Supreme Court. It is certainly time for federal contractors to set their minds on how all this change could affect their bottom line. Following, are six ways the Act could increase costs for federal contractors and ways they can prepare for the impact said expenses will have.

1) The Act’s health care obligations include new requirements on individuals, employers and health plans, and restructures the private health insurance market, setting minimum standards for health insurance. It also provides financial assistance to some individuals. Before the October 2013 date and exchange enrollment, employers are required to provide formal notice to employees that the exchanges are available. Following this time, cost implications will be close behind and it’s important for federal contractors with slim margins and tight budget constraints to assess what it will take for them to comply.

2) Potential Cost impacts include play or pay penalties for employers. Employers need to either provide affordable health insurance that is valuable or pay a penalty. Therefore, they either “play” along with the set Act OR “pay” a penalty. Employers must be aware of their employees eligibility for tax credits and must carefully assess whether their firm is considered large. Because if their firm is considered large, they can be subject to monthly fees or penalties.

Six Ways the Affordable Care Act Could Cost Federal Contractor's More3)Traditionally full time employees are considered those who work 40 hours a week. The Act describes them as working 30 plus hours a week. The new definition of part time workers is a major change in the breakpoint for employee benefits coverage. This change could significantly alter federal contractors’ insurance costs and in turn generate increased overhead costs, ultimately affecting the employer’s competitive pricing strategies.

4) Another impact will be excess health benefits or “Cadillac” tax. The Act will also penalize high cost benefit plans. Many within the insurance industry refer to this as the Cadillac tax.

5) Contractors with Service Contract Act (SCA) employees face even more dramatic consequences under the Act than those above. Prevailing wage determinations dictate that SCA employers can offer SCA employees benefits as fringe dollars. Starting in January 2014, the Act eliminates this simple way for employers to comply with the SCA and establishes the more complicated regime under which large employers have to provide an “affordable plan meeting minimum value” for their employees or face big penalties.

6) Employers face potential costs under the exchange system. The exchanges are partly intended to keep health care costs down but they may also subject employers to additional business and administrative costs.

Prevailing Wage Employee Benefit Administration

Prevailing Wage Employee Benefit Administration for Davis Bacon and Service Act Contractors

The U.S. Department of Labor or DOL has responsibilities to oversee that coordination, administration and consistency of the of the labor standards provisions of the Davis Bacon and Related Acts is being followed. The DOL has issued regulations under this authority to establish standards and procedures for the administration and enforcement of the Davis-Bacon labor standards provisions in covered contracts they’re responsible for or to which they provide federal assistance under laws they administer.

Compliance Assistance Materials include:Prevailing Wage Employee Benefit Administration

Davis-Bacon and Related Acts web page – Information on prevailing wage and benefits.

Employment Law Guide – Prevailing Wages in Construction Contracts – Description of the coverage and basic requirements of prevailing wages in construction contracts.

Compliance Assistance – Davis Bacon and Related Acts web page – Information on the acts that require prevailing wages and fringe benefits on federal construction contracts.

Wage Survey Form  – Optional form to ensure consistency in submission of wage data.

Wage Determinations on line – A single location providing federal contract officers and the public to use in obtaining SCA and DBA wage determinations for each official contract action.

Davis Bacon poster – Covered contractors must post this poster.

Form WH-347 – Optional form that satisfies requirements of Regulations parts 3 and 5. See 29 CFR 5.5 (a)(3)  for more information.

Davis Bacon Act – Requires payment of prevailing wages to laborers on a federal construction contract.

Reorganization Plan of 1950

29 CFR Part 1, 29 CFR Part 3, 29 CFR Part 5, 29 CFR Part 6, 29 CFR Part 7 – Regulation descriptions.

This is all the compliance materials, record keeping materials and applicable laws and regulations.  Contact Fringe Consulting for more information.


Service Contract Act – Fringe Consulting

Service Contract Act

The Service Contract Act, hereto referred to as SCA was enacted to prevent wage busting and displacement of workers. In the act, wages, benefits, vacation and holiday policies are specified as well as other working conditions for employees who fall under certain SCA classifications.Service Contract Act – Fringe Consulting

Anyone wishing to bid for a federal service contract in Massachusetts, New England, Boston or elsewhere, must meet the requirements of the act and develop strategies to make sure they also stay in compliance.

Before bidding on a project or negotiating the project price, it’s important to have a sound and thorough understanding of the financial and operation implications of the SCA.

The SCA enforces compensation requirements on the general contractors as well as their subcontractors providing services to the federal government. Make sure to note that the SCA applies to service contracts performed within the U.S. when the contract value exceeds $2500. If a portion of the contract is performed outside of the U.S., it does not apply as well as if a certain federal contract is exempt.

So, how does one make sure all their ducks are in a row as far as the SCA is concerned? Here is a helpful checklist to use as your measuring stick:

-Employee duties they actually perform dictate the classification of that job under the act and the rate of pay they’re entitled to under the applicable wage determination.

-When starting a new federal contract, previous or incumbent employees should be offered first right of refusal by the contractor within ten days. This can be done by acquiring copies of the predecessor’s service employment contract.

-Payable wages must meet prevailing wage rates and fringe benefits.

-The regular pay rate of such an employee shall not include any fringe benefit payments which are excluded from the regular rate under the FLSA.

-An employer may be able to apply a Special Minimum Wage when employing workers with disabilities. This exception applies only to prevailing wage and not fringe benefits. The employer must obtain the appropriate certification from the Department of Labor.

-The SCA specifies a distinction between temporary, part-time, and full-time employees and entitles them to an amount of the fringe benefits that is proportionate to the amount of time spent in work subject to the SCA.

-The SCA requires extensive record keeping. You must keep available such things as the employee’s basic information, correct work classification, wage rates and fringe benefits provided; hours worked, pay rates applied, paid vacation and holidays for three years from the completion of a given work assignment.

Should an employer not comply with the requirements of SCA, the Department of Labor has the authority to withhold the violator’s contract funds in order to reimburse the employees, as well as terminate the contract, holding the contractor liable for associated costs. Lastly, the violator can be prevented from participating in future federal contracts for three years.

Get that Competitive Edge when Bidding Contractor Jobs

Get that Competitive Edge when Bidding Contractor Jobs

Build Your Business by Landing Government Contracts

As a contractor, you need to “make hay while the sun shines!”  In this market, that means being more competitive when bidding public construction projects. Every year, Davis Bacon and Service Contract Act projects are put out to public bid, but for you to win and turn a profit, you need to know the ins and outs of the rules and regulations that apply to these “one of a kind” projects. Sound complicated?Get that Competitive Edge when Bidding Contractor Jobs

It doesn’t have to be!

Fringe Consulting specializes in helping businesses like yours land profitable contracts while safely navigating the obstacles along the way. How? Our experience in creating Davis-Bacon Act compliant benefits packages ensures that you meet government regulations, provide your workers with competitive benefits packages and ensure that you are not overpaying!

Many contractors pay their workers additional cash wages and still pay a portion of their health insurance premiums. A better approach is to pay insurance premiums using fringe funds. This provides your workers with the same benefits but lets you keep more of your hard earned money! It is a no-brainer because it eliminates your payroll burden on funds you pay out for healthcare.

You could try to get this right yourself, but why? Fringe Consulting can lower your payroll taxes, workers comp and general liability insurance and improve your compliance to all prevailing wage laws those government contracts require. That means you stay compliant and still have a chance turn a profit when the job is done!

Fringe Consulting provides you with quality pension plans, fringe benefit options, prevailing wage consulting and employee benefits for either short-term or long-term contracts. When you offer fringe benefits in lieu of cash wages, you save money for both employer and workers by reducing tax exposure to all. We offer a complete range of fringe benefits, pension plans and trust programs.

What are you waiting for? Call Fringe Consulting today and lets discuss a better fringe benefits strategy to help you win more bids!