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 Nine of them because they’ve repealed their laws and eight of them that simply never had any such law.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of the 18 non prevailing wage states, eight of them have never enacted any such law and nine of them have repealed their laws during the majority of the 1980s (1979-1988).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 They repealed theirs in 1985.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.

Contribution Amounts Annualized for Prevailing Wage Purposes

Contribution Amounts Annualized for Prevailing Wage Purposes

There are public works contractors that are fully aware and familiar with the need to annualize their portion of the medical premium that they provide. There are also public works contractors who are not and need further guidance from the folks at Fringe. For those who may be the latter, please take note of these two base principals or guidelines regarding annualization of contributions as pertains to our prevailing wage consulting clients.Contribution Amounts Annualized for Prevailing Wage Purposes

1) Annual Payments. For annualization purposes, contractors who make their yearly payments to cover the entire year’s medical premiums prior to the upcoming year, the total amount of hours worked by the employees the preceding year will be considered as representing a normal work year. Even if the employee is expected to work less, this next coming year, the previous year’s hours are still considered to be the norm. Therefore, to determine the hourly cash equivalent that the employer is entitled to take credit for, the total hours worked should be divided into the contribution made by the employer.

For instance, if an employee works 2,000 hours the previous year and the employer makes an yearly contribution of $7,500, then 7,000/2,000 comes out to $3.50 per hour credit.

2) Monthly Payments. For employers who pay monthly rather than annually, there are a couple of ways to decipher the hourly cash equivalent.

a) You can take the hours worked in the previous month( or same month in the previous yr) and divide it into the contribution made by the employer. For instance, if an employee worked 120 the previous month and the employer’s contribution is $200, then 200/120 comes out to $1.61 per hour credit. This method is Health Insurance Premiums Paid on a Lump Sum Basis.

b) If the employer wants to pay monthly but doesn’t want to make the calculations for the credit monthly, they instead may want to estimate the annualized amount and take the same credit for each employee throughout the year. This is the most popular and easiest choice. To decipher the annualized amount, a contractor may use the full year equivalent of 2,080 hours in determining the applicable credit.  Therefore, if the employer’s contribution to the medical premium is $300, then, 300×12/2,080 comes out to $1.73.

Remember, when doing a premium annualization estimate, you need to review the total amount of hours worked by each employee quarterly. If an employee is fore seen to work more than 2,080 hours, a refund needs to be issued to the employee for the overaged amounts and no more credit can be taken for him/her during that year.

Should you find any of this confusing, please contact us today.

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.

Seasonal Workforce Solutions for Prevailing Wage Contractors

 Schedules can Interrupt the Workforce

Prevailing wage contractors often are challenged with managing a workforce that experiences interrupted work schedules.  Some trades experience this more often including heavy highway, roofing, utility, masonry, excavators, boring and many more contractor specialties.

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