Let's be Strategic and Prevail
by Michelle Dreier
Member Engagement/Gov't Affairs Manager
It is that time of year again. MN DLI sent out their annual invitation to provide information to set the prevailing wage rates. Even if you don’t participate in public projects, prevailing wage can find its way into new applications such as renewable energy. Participating in the survey can make you more competitive as you bid on this work.
The calculation of prevailing wage is a numbers game. You can submit surveys for all projects you have performed work on since April 1, 2018, through the end of the survey period, including work that is ongoing and incomplete at the time of the survey, which is through May 29, 2019. The more data you submit, the more likely your wage rate is likely to prevail. There are ways to strategically limit your time investment in the process.
A bit about how the wage rates are calculated: DLI compiles all the data and determines the most commonly paid wage rate to the penny for electricians in all 87 counties, otherwise known as the mode. This method really does favor union labor where all electricians are paid the same regardless of which contractor they are working for.
But…
If you take a good look at the data, you may find that many rural counties don’t receive any submissions. Many counties have wage rates set by a mode of 2 workers or less. This is your opportunity for change.
• Think about the counties in which you are most likely to perform work on prevailing wage projects. Focus on submitting surveys for those counties.
• Think about a particular individual that is found on most of your projects, and submit that person’s work. Because of modal calculation, supplying a variety of wage rates doesn’t necessary benefit you.
• The more identical wage rates you submit for a county, the more likely your wage rate will prevail.
There is nothing that requires you to submit all of your projects or all of your workers on those projects. It is okay to be selective!
Things to remember:
• A worker needs to be employed for 8 hours or more on a project in order to be considered.
• Only report journeyworker wage rates.
• If a worker is performing work in multiple classifications such as equipment operator and electrician, report them using the labor code in which they are performing the majority of their work.
• A worker can only be reported once per project.
• Do not report individuals with premium pay such as foremen, or lower rates of pay such as apprentices.
The wage portion of the survey is broken down into two fields: base and fringe. Base is the dollar amount that the worker is paid on their check. Fringe is employer-paid benefits. Fringe can be things such as PTO, sick leave, vacation leave, holiday leave, employer’s contribution to health or welfare benefits, and employer’s contribution to retirement benefits. Determine the hourly cost of a worker’s benefit package and report it in the fringe field. Your fringe package may vary from worker to worker.
Do not include social security, worker’s compensation premiums, unemployment, or taxes. These are considered payroll burden, not benefits, and is required of an employer by law.
If this still seems daunting, I am available for private consultation to train an individual on your staff regarding the reporting and submitting of wage data.
Contact me at (612) 827-6117 or email me at [email protected].