What is a prevailing wage determination?
A prevailing wage determination is a combination of the wage rates and fringe benefit rates for each classification of trade laborer. Prevailing wages apply to construction work, and is the average wage paid to similar employed workers in the same area. The DOL determines what types of jobs are prevailing in different kinds of construction projects.
What are the two kinds of wage determinations?
There are general determinations (a.k.a. area determinations) and project determinations. General determinations are rates determined to a specific geographic area for the same kind of construction work. HCM TradeSeal helps companies with prevailing wages in multiple jurisdictions & areas. A project wage determination is applicable to the project only, and expires 180 calendar dates from the date it was issued.
What is the Davis-Bacon Act?
Any contracts in excess of $2,000 that involve construction, alteration or repair of public buildings or works, within the US, must ensure any laborers or mechanics employed directly on the site receive a minimum prevailing wage rate that was set by the U.S. Secretary of Labor.
How do I stay up-to-date on the General Wage Determinations?
To follow rates, the DOL recently moved general wage determinations to Sam.gov.
How do I set up prevailing wage certified payroll?
When non-union employees work on certified jobs, employers must be careful to ensure their rate of pay is greater than or equal to government wage determination rates. Non-union employee pay can vary widely based on geography or the type of work an employee performs: rates can vary by job, by location and by type of work performed. HCM TradeSeal’s reporting technology makes it easy to include non-union employees on any Certified Payroll report. HCM TradeSeal also calculates prevailing wages and benefits automatically, to ensure employees are always paid the correct rate.
If your company works on Certified Payroll projects in different states or jurisdictions, you may need to submit different types of Certified Payroll reports. Additionally, you may need to report fringe benefits differently across different Certified jobs.
HCM TradeSeal‘s certified payroll technology makes it easy to report to multiple agencies.
What is a Davis-Bacon Wage Survey?
The U.S. Department of Labor’s Wage & Hour Division collects wage rate data through the Davis-Bacon Wage survey program and is used to publish “General Wage Determinations”. The WHD will determine which rates are prevailing in a specific area (most likely a county) for the type of construction work performed. WHD does collect data on all construction projects – and includes privately funded, state funded, locally funded and federally funded construction projects.
If your Certified Payroll jobs are impacted by a project labor agreement (PLA) or rates that vary by county, it will be important to ensure that non-union workers receive the correct rate of pay as determined or influenced by local unions. In some cases, varied rates of pay can have an impact on the way fringe benefits are calculated.
HCM TradeSeal‘s automatic calculations can enforce rate and benefit rules that vary by location. PLA or county-specific rates are included on Certified Payroll reports.
Depending on the types of certified payroll projects and employer paid benefits chosen by your company, it may be possible to save tens or hundreds of thousands of dollars in overpayments and unnecessary taxes. HCM TradeSeal makes it easy to take advantage of prevailing wage fringe credits by automatically calculating benefits before a payroll is processed.
Yes, advanced calculation is needed. Many times employers experience overpayments on wages and taxes due to prevailing wage cash fringe benefits. By automatically converting employer paid benefits into “fringe credits,“ HCM TradeSeal is able to reduce or eliminate payment of prevailing wage cash in lieu.
If your company works on Certified Payroll projects in different states or jurisdictions, you may need to submit different types of Certified Payroll reports. Additionally, you may need to report fringe benefits differently across different Certified jobs. HCM TradeSeal‘s certified payroll technology makes it easy to report to multiple agencies, General Contractors or portals such as LCP Tracker, eCPR, Washington L&I or eMars.
Most types of construction jobs are bound by prevailing wage rates, for public works projects. Other types of jobs like demolition, remodeling, utilities and repair work also fall within prevailing wages. The Davis Bacon Act applies to contractors and subcontractors who work on federally funded contracts in excess of $2,000. Also, many prevailing wages are comparable to union wages.
Many states have their own prevailing wage laws (little Davis-Bacon Law). Similar to the federal law, these laws set the wage requirements. Many make the mistake that prevailing wage laws don’t apply to them because it’s not a federally funded project. However, please check if your state has prevailing wage laws for state funded projects. There are 32 states that have state prevailing wage laws, but the rules vary by state.
Many employers struggle to pay prevailing wages accurately because of the added complications of per-employee rates (some employees are paid higher than prevailing wage rates) and per-job variance (rates can change for a single employee depending on which job is worked.) Prevailing wage payroll processing requires an understanding of project and job-level details. Each prevailing wage job has different requirements for cash fringe benefits and pay rates that can vary by class or craft, apprentice level, by jurisdiction, or even by employee. Inaccurate calculation or payment of prevailing wages can result in reports being rejected, even if the report is off by a single penny. If an employer cannot prove accurate and timely payment of prevailing wages and fringe benefits, they may face severe penalties, fines or even jail time. TradeSeal can generate accurate Certified Payroll reports with accurate class/craft names, benefit breakouts and pay rate reporting, even when union employees work on jobs. Federal, state and local Certified Payroll reports are included in HCM TradeSeal, in PDF or electronic formats. Need help right away, contact us.
A Certified Payroll report is a specific type of payroll report that must be submitted either to a government agency or general contractor (GC) on projects funded by federal, state or local governments. HCM TradeSeal automatically creates reports in exactly the Federal, state or local formats required by your project agency or general contractor.
Today, most Certified Payroll reports are created in PDF format before being submitted to agencies or general contractors. The most common type of report is federal form WH-347.
HCM TradeSeal can automatically generate many reports. To see the full listing of reports available, see the list here>
Certified Payroll reports must be submitted weekly and are often necessary to receive payment on a project or job. Generating automatic reports with HCM TradeSeal can save over two hours of time spent preparing just a single report for one job.
According to DOL.gov, twenty-four states do not have prevailing wage laws. These States are: Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Utah, West Virginia, Wisconsin.
According to the DOL.gov, 32 states have prevailing wage laws. To see the full list and each state’s threshold amount, go here>
A violation occurs when a contractor fails to pay prevailing wages. Each day that an employer pays less than the prevailing wage rate is considered a separate violation. Many times a contractor will receive debarment. Debarment means a contractor will not be able to bid or perform work on public contracts for a period of time. Debarments can last 3 years or more. Additionally, an employer who violates prevailing wage laws (state and/or federal) may be guilty of a “disorderly person’s defense”- and subject to fines and even imprisonment. HCM Tradeseal can help you calculate your prevailing wage certified payroll and ease the compliance burden.