Oregon Bureau of Labor & Industries
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1 Oregon Bureau of Labor & Industries Prevailing Wage Rate Law Basics PLSO 2016 Conference January 20, SEMINAR TOPICS Prevailing Wage Rate (PWR) Basics Coverage of the PWR Law Contractor Responsibilities Checklist to Avoid Pitfalls BOLI Contacts 2 PREVAILING WAGE RATE BASICS Prevailing Wage Rate Laws were first passed in 1959; based on federal Davis-Bacon Act (DBA). Prevailing wage rate laws apply to all contractors and subcontractors performing work on a covered project. These wages are a minimum wage that must be paid to workers for the type of work they perform on a covered project and consist of an hourly base rate plus an hourly fringe benefit rate. 3 1
2 Purpose of Prevailing Wage Rate Laws To protect local contractors from unfair competition; To promote local participation in public construction and maintain community established compensation standards; To encourage the training and education of workers in industry skill standards; To encourage contractors to use the fringe benefit funds for actual benefits for their employees. ORS 279C PUBLIC WORKS PROJECTS 5 Generally, projects will be subject to the prevailing wage rate (PWR) law when they: Are done by a state or local public agency (NOT a federal agency); Include construction, reconstruction, renovation or painting; Use some public funds; and Cost more than $50,000. ORS 279C.800(6); ORS 279C.810(2) 6 CONTRACTOR RESPONSIBILITIES Found on pages in 2014 PWR Laws handbook: Who Must Be Paid PWR Public Works Bond Contract Language Posting Rates on Site Determining the Correct Rate of Pay Paying Overtime Appropriately Calculating Fringe Benefit Credits Certified Payroll Reports Required Records Review BOLI s List of Ineligibles 2
3 7 WHO MUST BE PAID PWR? All workers performing labor on the project site. ORS 279C.840(1) A worker = a person whose duties are manual or physical in nature. OAR (32) This includes people whose duties are mental or managerial in nature, such as owners, working supervisors, or surveyors, if they spend more than 20% of their work week performing labor. OAR (3) & (4) To calculate 20% of the work week, must include all hours performing manual labor, on site and off. 8 Classification is Based on Duties Workers are classified and paid according to the type of duties performed on the project site. ORS 279C.840(1) For example: Cutting brush = Laborer Group 1 Setting stakes = Laborer Group 1 Checking grade = Laborer Group 2 or PEO Grp. 6 Setting grade for operator = PEO Group 4 New as of 1/1/16: Construction Site Survey Party Chief = PEO Grp. 2 (must perform manual labor more than 20% of workweek) PUBLIC WORKS BOND Every employer who is required to pay prevailing wages is required to file a $30,000 Public Works Bond with Construction Contractors Board before starting work on a PWR project. (Usually in effect for 1 year; do not need one per project.) ORS 279C
4 PUBLIC WORKS BOND Exemptions from bond requirement: Allowed for certified DBE/MWESB contractors, for the first FOUR years of certification. (See Oregon s Office of Minority, Women and Emerging Small Business Dept. for cert.) Contractor must file written proof of certification with CCB, and give CCB written notice they elect not to file a bond. If prime, must give written notice to public agency that business elects not to file bond. If sub, must give written notice to prime that business elects not to file bond. ORS 279C PUBLIC WORKS BOND More exemptions from bond requirement: For projects with a total PROJECT cost of $100,000 or less, public works bond is not required. (Note this is the total project cost, not an individual contract amount.) For emergency projects, as defined in ORS 279A.010(f). ORS 279C CONTRACT LANGUAGE Every contract and subcontract must include: On projects subject only to Oregon PWR law, a provision that the workers will be paid not less than the applicable prevailing rate of wage for the type of work being performed. On projects subject to both Oregon and federal PWR law, a provision that the workers will be paid not less than the higher of the applicable state or federal prevailing wage rate for the type of work being performed. ORS 279C.830(1)(c)&(d); OAR (3) 12 4
5 13 POSTING REQUIREMENTS EVERY contractor and subcontractor must post in an accessible and conspicuous place on the work site: Applicable rates Doesn t need to be the full rate book, but must include the applicable rates for the contractor s employees. For health/welfare and pension plans: Name the plan and provider, how and where to file a claim, where to get more information. ORS 279C.840(4) & (5); OAR DETERMINING THE CORRECT RATE OF PAY State PWR rates are based on a survey of nonresidential construction occupations. Generally: If more than 50% of hrs reported for classification in a region are at union rate, union rate prevails. If less than 50% of hrs reported for classification in a region are at union rate, average rate (according to survey) for classification is used. Prevailing Wage Rate books are published twice a year, on January 1 st and July 1 st ; amendments are published twice a year, on Apr. 1 st and Oct. 1 st.. 14 ORS 279C.815 DETERMINING THE CORRECT RATE OF PAY Generally the state rates in effect at the time the agency advertises a project for bid are the rates to be paid throughout the project. This can be different for projects that use a Construction Manager/General Contractor (CM/GC) or that use federal rates (see pgs in PWR law handbook for more info). Check with public agency (the agency in charge of project, aka owner ) for applicable state and federal rates for project. BOLI may also have applicable rate information. OAR (4) 15 5
6 16 To Look Up a Rate: (directions on page 1 of rate book) When was the project first advertised for bid? In what county is the project located? Look up the county in the REGION pages. (REGION pgs first!) What type of work is being performed? Use the Definitions booklet if not sure of classification. Is there a rate listed next to the classification? Use it. If the book directs you to see appendix, go to the back of the book and use the rate listed there. It may include an area, a group number and/or zone pay. Need help? Call BOLI phone # in commish s letter on first pg. of rate book: (971) DAILY OVERTIME When working on a PWR project, overtime is due on a daily basis for: All hours worked after 8 per day, Mon. Fri.; All hours worked on Saturdays, Sundays, and six legal holidays (see page 87 for holidays); and All hours worked over 40 per week. ORS 279C.540; OAR Employees may be on a 4/10 schedule, with OT due after 10 hours per day. Must notify employees in writing. Very restrictive schedule; call BOLI for help with this. 17 Calculating Overtime Overtime = (the base hourly rate [includes zone pay when required] x 1.5) + the fringe rate. The fringe rate is paid for all prevailing wage rate hours worked, but is not paid at time and onehalf. If an employee works at more than one rate of pay during a day or week, overtime must be computed using a weighted average of the hourly base rates earned. See Appendix C in law book (pgs 72-77) for examples. 18 6
7 FRINGE BENEFITS Employers may take a credit toward the fringe benefit requirement for bona fide fringe benefits they provide to their employees. Bona fide fringe benefits are: Health and welfare plans Vacation, holiday & sick pay plans Retirement plans Apprenticeship and Training ORS 279C.800(1); OAR (8) For more information, see pgs and Appendix A (pgs 65-70) in the PWR Laws handbook. 19 Contribution Requirements: Must be made irrevocably to a third party for the employee s benefit. Must be made on a regular basis, and not less often than quarterly. Must not be required by law. Made for prevailing wage work may not be used to fund the plan or program for periods of nonprevailing wage rate work (i.e., need to spread the cost of plan out over ALL hours worked). ORS 279C.800(1); OAR , Calculating the Hourly Fringe Benefit Credit Start with employer contribution paid for employee for the most recent time interval All hours worked by employee during the contribution period (including non-pwr hours) = Allowable hourly equivalent fringe benefit credit Health insurance premium = $ per month Employee worked 184 total hours during the month $ hours = $2.71 credit per hour 21 See also: Appendix A in law book, page 65. 7
8 CERTIFIED PAYROLL All employers who are required to pay prevailing wages are required to prepare weekly certified payroll reports and statements and submit them to the project s public agency by the fifth business day of the following month. ORS 279C.845; OAR SEE INSTRUCTIONS IN BACK OF RATE BOOK SEE EXAMPLE AT END OF HANDOUT 22 More Certified Payroll Reports Contractors may submit their own report as long as it contains all the same information as the WH-38 form. Contractors must complete the statement of certification and attach it to the payroll. The people who must be shown on the report are all those who earned prevailing wages that week. That includes those people who performed a mix of mental or managerial duties and manual labor, if labor is more than 20% of the work week. ORS 279C.845; OAR
9 25 REQUIRED RECORDS In addition to certified payroll reports, employers must keep specific records for EACH employee. Includes: Name & address, work classifications, rates of pay (base wages and fringe benefits), amount of fringe benefits paid to plan or program, total daily and weekly compensation paid, daily & weekly hours worked, apprentice information, and all payroll records. Employer records must be kept for 3 years from the date of completion of the work; however, the statute of limitations on wages due is 6 years, so keep records for that long if possible. ORS 279C.845; OAR LIST OF INELIGIBLES List of Ineligibles (debarment list) is in the back of the rate book; most recent version is on BOLI s web site. Debarment generally lasts for three years. Applies only to projects covered by PWR law - not federal projects or projects less than $50,000. If a contractor or agency awards a contract to someone on the list, it is considered to be intentional circumvention of the law. OAR
10 Checklist to Avoid Pitfalls (pgs of PWR Laws Handbook) File a Public Works bond with CCB before starting work on a project. Include a statement that workers must be paid the appropriate PWR in all contracts and subcontracts. Post the applicable rates on the project site. Pay workers on site not less than the appropriate prevailing wage rate. 28 Checklist to Avoid Pitfalls... Keep accurate daily records on each employee in each classification. File accurate and complete certified payroll with the project s public agency. Keep all required records for at least 3 years, and up to 6 years if possible. Review BOLI s List of Ineligibles before awarding a subcontract on a PWR project. 29 Questions? Call for help! Selena Schryvers (971) Rachelle Herbert (971) Susan Wooley (971) US DOL (503) See Appendix B in PWR Laws Handbook for more helpful contacts (pg 71)! 30 10
11 BUREAU OF LABOR AND INDUSTRIES PAYROLL/CERTIFIED STATEMENT FORM WH-38 WAGE AND HOUR DIVISION FOR USE IN COMPLYING WITH ORS 279C.845* * Although this form has not been officially approved by the US. Department of Labor, it is designed to meet the requirements of both the state PWR law and the federal Davis-Bacon Act. WH-38 (Rev. 06/14) THIS FORM CONTINUED ON REVERSE PRIME CONTRACTOR X SUBCONTRACTOR PAYROLL #: 3 FINAL PAYROLL Business Name (DBA): Wooley Construction Phone: ( 971 ) CCB Registration Number: Project Name: Rock Creek Middle School Project Number: Type of Work: General Contractor Street Address: SE Davis, Portland OR Project Location: SE Parklane Dr, Happy Valley Mailing Address: PO Box 1652, Portland OR Project County: Clackamas Date Pay Period Began: Feb 4, 2016 Date Pay Period Ended: Feb 17, 2016 THIS SECTION FOR PRIME CONTRACTORS ONLY THIS SECTION FOR SUBCONTRACTORS ONLY Public Contracting Agency Name: North Clackamas School District Subcontract Amount: Phone: ( 503 ) Prime Contractor Business Name (DBA): Date Contract Specifications First Advertised for Bid: April 7, 2015 Prime Contractor Phone: ( ) Contract Amount: $5,656,012 Prime Contractor s CCB Registration Number: Date You Began Work on the Project: (1) (2) (3) DAY AND DATE (4) (5) (6) (7) (8) (9) (10) (11) NAME, ADDRESS AND EMPLOYEE'S IDENTIFICATION NUMBER* Joe Schmoe SE 165th Portland, OR Rick Frick 6549 SE Burnside Portland, OR Carl Schmarl 727 NE Holladay Portland, OR Ed Bread 800 NE Oregon St Portland, OR CLASSIFICATION (INCLUDE GROUP # & APPRENTICESHIP STEP IF APPLICABLE) Carpenter Gp 1 Carpenter Gp 1 60% Apprentice Laborer Gp 1 Laborer Gp 1 OT ST OT ST OT ST OT ST M T W Th F Sa Su 2/4 2/5 2/6 2/7 2/8 2/9 2/ HOURS WORKED EACH DAY TOTAL HOURS HOURLY BASE RATE $ $30.00 $ $ $ $25.00 $ $25.00 HOURLY FRINGE BENEFIT AMOUNTS PAID AS WAGES TO EMPLOYEE $0.00 $0.00 $4.00 $10.00 GROSS AMOUNT EARNED (see directions) $90.00 $1, $54.00 $ $ $1, $ $1, ITEMIZED DEDUCTIONS FICA, FED, STATE, ETC NET WAGES PAID $ $ $ $ $ $ $ $ HOURLY FRINGE BENEFITS PAID TO BENEFIT PARTY, PLAN, FUND, OR PROGRAM NAME OF BENEFIT PARTY, PLAN, FUND, OR PROGRAM $5.20 Med - BC/BS $4.95 Pension - Fin. Grp $1.33 Vacation $4.50 Med - BC/BS $5.85 Pension - Fin. Grp $1.13 Vacation $5.00 Med - BC/BS $1.00 Vacation OT ST
12 WH-38 (Rev. 06/14) CERTIFIED STATEMENT Date: Feb 18, 2016 In addition to completing (1) - (3), if your project is subject to the federal Davis- I, Susan Wooley Owner Bacon Act requirements, complete the following section as well: (NAME OF SIGNATORY PARTY) (TITLE) do hereby state: (4) That: (1) That I pay or supervise the payment of the persons employed by: (a) WHERE FRINGE BENEFITS ARE PAID TO APPROVED PLANS, FUNDS OR PROGRAMS WOOLEY CONSTRUCTION (CONTRACTOR, SUBCONTRACTOR OR SURETY) - In addition to the basic hourly wage rates paid to each laborer or mechanic listed on the Rock Creek Middle School Project ; that during the payroll period in the above referenced payroll, payments of fringe benefits as listed in the (BUILDING OR WORK) contract have been or will be made to appropriate programs for the benefit of commencing on the 4th day of February, 2016, and ending the 17th day such employees, except as noted in Section 4(c) below. (MONTH) (YEAR) of February, 2016, all persons employed on said project have been paid the (b) WHERE FRINGE BENEFITS ARE PAID IN CASH (MONTH) (YEAR) full weekly wages earned, that no rebates have been or will be made either directly or indirectly - Each laborer or mechanic listed in the above referenced payroll has been paid, to or on behalf of said WOOLEY CONSTRUCTION from the (CONTRACTOR, SUBCONTRACTOR OR SURETY) as indicated on the payroll, an amount not less than the sum of the applicable basic hourly wage rate plus the amount of the required fringe benefits as listed in full weekly wages earned by any person, and that no deductions have been made either directly the contract, except as noted in Section 4(c) below. or indirectly from the full wages earned by any person, other than permissible deductions as specified in ORS , and as defined in Regulations, Part 3 (29 CFR Subtitle A), issued by (c) EXCEPTIONS the Secretary of Labor under the Copeland Act, as amended (48 Stat. 948, 63 Stat. 108, 72 Stat. EXCEPTION (CRAFT) EXPLANATION 967; 76 Stat. 357; 40 U.S.C. 276c), and described below: Federal withholding, FICA, State withholding, WBF (2) That any payrolls otherwise under this contract required to be submitted for the above period are correct and complete; that the wage rates for workers contained therein are not less than the applicable wage rates contained in any wage determination incorporated into the contract; that the classifications set forth therein for each worker conform with work performed. (3) That any apprentices employed in the above period are duly registered in a bona fide apprenticeship program registered with a state apprenticeship agency recognized by the Bureau of Apprenticeship and Training, United States Department of Labor, or if no such recognized agency exists in a state, are registered with the Bureau of Apprenticeship and Training, United States Department of Labor. I HAVE READ THIS CERTIFIED STATEMENT, KNOW THE CONTENTS THEREOF AND IT IS TRUE TO MY KNOWLEDGE: Susan Wooley, Owner (NAME AND TITLE) (SIGNATURE AND DATE) REMARKS: NAME AND TITLE SIGNATURE THE WILLFUL FALSIFICATION OF ANY OF THE ABOVE STATEMENTS MAY SUBJECT THE CONTRACTOR OR SUBCONTRACTOR TO CIVIL OR CRIMINAL PROSECUTION. SEE SECTION 1001 OF TITLE 18 AND SECTION 231 OF TITLE 31 OF THE UNITED STATES CODE. FILE THIS FORM WITH THE PUBLIC AGENCY ASSOCIATED WITH THE PROJECT NOTE TO CONTRACTORS: YOU MUST ATTACH COPIES OF THIS FORM TO EACH OF YOUR PAYROLL SUBMISSIONS ON THIS PROJECT. INSTRUCTIONS AND ADDITIONAL FORMS ARE AVAILABLE ON OUR WEBSITE:
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