Prevailing Wage and Apprenticeship
Along with all the other benefits of a registered apprenticeship program, apprentices in a bona fide registered apprenticeship program are not subject to prevailing wage determinations on public projects. Instead, their wages are governed by their apprenticeship agreements. As such, they can be paid the wages listed in their apprenticeship agreements so long as they are performing work under those agreements and being supervised properly as also governed in the agreements.
On State Projects
Journeyworkers and unlicensed registered electricians will need to be paid the prevailing wage rate. Individuals registered with ETN of MN will be paid the rate as specified in their apprenticeship agreement. Most local projects will be handled this way, but be certain to consult the contract for any other provisions.
On Federal Projects
Journeyworkers and unlicensed registered electricians will need to be paid the prevailing wage rate. Individuals registered with ETN of MN will need to be paid the percentage listed in their agreement of the federal base rate or the agreement base rate, whichever is higher. If the apprenticeship agreement is silent as to fringe benefits, the apprentice must be paid the fringe package listed on the federal wage determination. Otherwise, Federal Department of Labor will enforce any benefit plan listed in the apprenticeship agreement.
It is very important to maintain appropriate ratios and supervision of your apprentices. Improperly supervised apprentices will require full prevailing wage payment. Keep this in mind when sending workers out on errands.
How Do I Pay My Workers Subject to Prevailing Wage?
For payment of your workers that must be paid the prevailing wage rate, the prevailing wage certification/determination is key. On the certification, you will find a base rate, fringe rate, and total rate listed. A worker can be paid any combination of base and fringe as long as it equals the total rate. Fringe benefits include an employer’s contribution to health and welfare benefits, pension and 401K benefits, paid leave, and apprenticeship costs. If payments are not going to a 3rd party administrator, the benefits must be communicated to the workers in writing and this document must be an enforceable commitment to provide promised benefits.
Where Do I Find the Prevailing Wage Rates?
The wage rates should be incorporated into the advertisement specifications. The contracting authority is required to include the prevailing wage rates. If you are a subcontractor, the contractor that hired you should provide you with the rates. If they don’t, ask for them. Do not go to DLI’s website for wage rates. Wage rates change, and some design/build projects may have wage certifications from previous years as a contract requirement. Always go to the contract for the appropriate rates.
Special Prevailing Wage Overtime Provisions
There are additional overtime requirements on a state prevailing wage project. Overtime is paid on time and a half the base listed on the certification, plus the fringe rate for every hour work. This is a bit different than time and a half regular rate of pay for the week that the Federal Fair Labor Standards Act requires. Overtime must be paid after 40 hours per week or 8 hours per day. This means that if an individual works one 10 hour day they must be paid 2 hours overtime, even if they don’t exceed 40 hour per week.
If an individual is working both long days and long weeks, determine the amount of overtime required using the 8 hour rule, and the amount of overtime required using the 40 hour rule. Pay the amount that is most beneficial to the worker. No pyramiding of overtime is required.
Federal prevailing wage requires overtime after 40 hours worked in a week, but does not require overtime for long days.
How do I Submit Certified Payroll?
Regarding the submission of certified payroll, list all workers on the project, even owners and apprentices. Owners must be paid at minimum the prevailing wage. Unlicensed registered electricians must be paid the prevailing wage. ETN of MN participants must be paid as previously discussed. Apprenticeship standards will be enforced. If the apprenticeship agreement is silent as to fringe, the full fringe on the Federal Certification must be paid. The base may also be changed to federal certification if it is higher than the base on the original apprenticeship agreement.
List their daily hours and the wages paid. List the amount paid into the fringe programs, and their standard deductions. On the second page called the certification of compliance there is opportunity to further explain fringe packages and provide 3rd party administrator contact information. The certified payroll should be submitted by an officer or owner of the company. It is very important to be complete and truthful on the submission of certified payroll. Incomplete or erroneous submissions could lead to time consuming audit and potential violations. Information that is submitted and determined to be fraudulent could lead to penalties and even criminal charges.
The Electrical Association is Here to Help!
We understands that prevailing wage can be complicated and difficult to maneuver especially on your first few projects. Sometimes even contracting authorities are confused about requirements. We do have a consulting package for members that need assistance. Ideally, the best time of guidance is before you enter into a contract so you can bid appropriately. We will also provide additional guidance to any members currently participating in ETN of MN regarding how to best utilize their apprenticeship program and stay in compliance.
Need help with Prevailing Wage?
We provide customized consulting services to meet your needs. Please contact Michelle Dreier
for pricing. (612) 252-2186 or (800) 829-6117