Understanding the Importance of Prevailing Wage


The term prevailing wage rate or "white sheet" means the basic hourly rate of pay, plus the hourly contribution for employee benefits, paid directly or indirectly for an occupation or trade.  If no benefits are provided, the hourly base rate and the hourly benefit amount are required to be paid directly to the employee.  

 

State and federal prevailing wage laws require contractors engaged in public construction to pay their workers a wage comparable to those of construction workers performing similar private work in the same geographic area.  On July 1, 2011, Wisconsin's state prevailing wage laws underwent major revisions.  The following chart summarizes the significant changes in the law.

 

SUMMARY OF MAJOR PREVAILING WAGE LAW CHANGES EFFECTIVE JULY 1, 2011

For further updates on this topic, refer to the prevailing wage website at: http://dwd.wisconsin.gov/er/prevailing_wage_rate

The recently approved State budget bill (2011 Wisconsin Act 32) includes changes to prevailing wage laws (§§66.0903, 66.0904, 103.49 & 103.50, Wis. Stats.) effective JULY 1, 2011.  Significant changes are described below.
Topic Who's affected? Brief description of requirement under §66.0903 or §103.49
Threshold s All public entities & Co ntractors The $25,000 threshold for public works projects has been changed to single-trade and multiple-trade project thresholds as noted below.  The new thresholds apply to prevailing wage projects whose prime contract is awarded after June 30, 2011.
Non-applicability:
Threshold for Single-Trade Projects  
All public entities & Contractors Any single-trade project of public works with an estimated cost of completion of less than $48,000 does not require a prevailing wage rate determination.
"Single-trade project of public works" means a project of public works in which a single trade accounts for 85 percent or more of the total labor cost of the project. 
Non-applicability:
Threshold for Multiple-Trade Projects 
All public entities except cities, towns & villages as noted below & Contractors  Any multiple-trade project of public works with an estimated cost of completion of less than $100,000 does not require a prevailing wage rate determination. 
"Multiple-trade project of public works" means a project of public works in which no single trade accounts for 85 percent or more of the total labor cost of the project. 
Non-applicability:
Threshold for Multiple-Trade Projects  
Cities or villages with a population of less than 2500 & Towns & Contractors A multiple-trade project of public works erected, constructed, repaired, remodeled, or demolished by a private contractors for a city or village with a population less than 2500, or a town with an estimated cost of completion of less than $234,000 does not require a prevailing wage rate determination.
"Multiple-trade project of public works" means a project of public works in which no single trade accounts for 85 percent or more of the total labor cost of the project. 
Non-applicability:
Minor service & maintenance work
Towns & Contractors The following TOWN projects only do not require a prevailing wage rate determination:
  *A project not funded under
   § 86.31, Stats. (TRIP projects)
   that is limited to minor crack
   filling, chip or slurry sealing or
   other minor pavement
   patching, not including
   overlays.
  *The depositing of gravel on an
   existing gravel road applied
   solely to maintain the road;
  *Road shoulder maintenance;
  *Cleaning drainage or sewer
   ditches or structures;
  *Any other limited, minor work
   on public facilities or
   equipment that is routinely
   performed to prevent
   breakdown or deterioration. 
Non-applicability:
Work for which a public entity does not compensate any contractor
All public entities Prevailing wage laws §§ 66.0903 & 103.49, Stats., do not apply to work performed on a project of public works for which the local governmental unit or the state or the state agency contracting for the project is not required to compensate any contractor, subcontractor, contractor's or subcontractor's agent, or individual for performing the work.
Non-applicability:
Residential
All public entities A prevailing wage rate determination is not required for the erection, construction, repair, remodeling, or demolition of a residential property containing 2 dwelling units or less.
Non-applicability:
Residential subdivision infrastructure
All public entities A prevailing wage rate determination is not required for a road, street, bridge, sanitary sewer, or water main project that is a part of a development in which at least 90 percent of the lots contain or will contain 2 dwelling units or less, as determined by the local governmental unit at the time of approval of the development, and that, on completion, is acquired by, or dedicated to, a local governmental unit (including under §  236.13(2), Stats.), or the state, for ownership or maintenance by the local governmental unit or the state.
Non-applicability:
Certain nursing homes
All public entities Prevailing wage law §  66.0903, Stats., does not apply to a project of public works involving the erection, construction, repair, remodeling, or demolition of a nursing home in a county having a population of less than 50,000 when the project commences no later than July 1, 2012.
Electronic certified payroll record  Contractors  The requirement that every contractor on a prevailing wage project submit to DWD monthly a certified record of employees who worked on the project and that DWD post these certified records on its internet website is discontinued effective July 1, 2011.  However, this requirement continues to apply to contractors who worked on prevailing wage projects during the period January 1, 2010 through June 30, 2011. 
Payroll record inspection request by any person Contractors & Complainants Any person may request DWD to inspect the payroll records of any contractor working on a prevailing wage project.  On receipt of such a request, the contractor must submit to DWD a certified record of its payroll records, other than personally identifiable information relating to an employee of the contractor, for no longer than a 4-week period.  DWD may request records from a contractor under this provision no more than once per calendar quarter for each project of public works on which the contractor is performing work.  The department may not charge a requester a fee for obtaining that information.  DWD must make these certified records available for public inspection.
Complaints Complainants There are no longer investigation fees.
Statewide uniformity Local governmental units A local governmental unit may not enact & administer a prevailing wage ordinance/
provision for public works or publicly funded private construction projects.  Any extant laws to that effect are void.
Covered employees  Truck drivers & Other workers & Contractors A laborer, worker, mechanic, or truck driver who is employed to process, manufacture, pick up, or deliver materials or products from a commercial establishment that has a fixed place of business from which the establishment supplies processed or manufactured materials or products or from a facility that is not dedicated exclusively, or nearly so, to a project of public works is NOT entitled to receive the prevailing wage rate UNLESS any of the following applies:
  1) the laborer, worker,
   mechanic, or truck driver is
   employed to go to the source
   of mineral aggregate such as
   sand, gravel, or stone and
   deliver that mineral aggregate
   to the site of a project of public
   works by depositing the
   material directly in final place,
   from the transporting vehicle or
   through spreaders from the
   transporting vehicle.
   2) the laborer, worker,
   mechanic, or truck driver is
   employed to go to the site of a
   project of public works, pick up
   excavated material or spoil
   from the site of the project, and
   transport that excavated
   material or spoil away from the
   site of the project. 
Annual Prevailing Wage Survey All public entities When establishing yearly prevailing wage rates, DWD may not use data from any construction work that is performed by a local governmental unit or a state agency.
Prevailing Wage Rates DOT & Contractors & Employees For state highway prevailing wage rates, DWD is required to include wage rates for work performed on Sundays, holidays and shift differentials based on the time of day or night when work is performed.
The 2009-2011 State budget bill (2009 Wisconsin Act 28) created a new prevailing wage law (§  66.090 4, Wis. Stats.) for PUBLICLY FUNDED PRIVATE CONSTRUCTION PROJECTS effective January 1, 2010.  The current 2011-2013 State budget bill (2011 Wisconsin Act 32) REPEALS this law.  So the publicly funded private construction projects law only applies to projects that awarded the prime contract during the period January 1, 2010 through June 30, 2011. ..

 

The public agency contracting the public works project has the responsibility to obtain the required wage rates and apply them to the public contract during the bidding process.  Construction projects with federal funding may also require federal prevailing wage rates (also known as Davis-Bacon) to be paid to employees on federally funded or assisted contracts in excess of $2,000.
 

To find out more about Wisconsin's prevailing wage laws and why they benefit everyone click here.