Changes and Corrections to Prevailing Wages

The Washington State Department of Labor and Industries publishes prevailing wage rates twice a year and makes changes in the rates based on changing survey data for specific classifications.

Washington Administrative Code (WAC) 296-127-011, Time for Determining Prevailing Wages, states the following:

"Prevailing wage rates for all public work contracts will be determined by the industrial statistician and published on the first business day of February and the first business day of August of each year. These rates shall become effective thirty days after the date of publication. However, the industrial statistician may revise an established prevailing wage rate in response to an administrative or judicial finding overturning the established rate, or at any time necessary to correct an error, with such revision becoming effective thirty days after the date of publication. However, in the event of an emergency as determined by the director of the department, such revised rates shall take effect upon publication."

Key concepts included in this provision of WAC 296-127-011, include the following:

Publication: The WAC requires that the Industrial Statistician of the Department of Labor and Industries publish new prevailing wages for each county twice a year, "on the first business day of February and the first business day of August of each year." The purpose of the publication requirement before the effective date of the new prevailing wages, is to provide public agencies with time to include the new prevailing wages into bidding documents for projects that will be advertised. In addition, publication of the prevailing wage rates prior to the effective date, provides an opportunity for interested parties to provide feedback to L&I on any errors or corrections that may need to be made in the prevailing wage rates prior to the wages going into effect.

Effective Date: According to the WAC, the prevailing wages that are published "on the first business day of February and the first business day of August" become effective 30 days after publication. Thus, a public agency may generally expect that the date of the prevailing wages will be in early March and the end of August of each year.

Changes and Corrections: Establishing prevailing wages is a complex undertaking for L&I, and despite the care that is taken in establishing correct prevailing wage rates, errors do occur. WAC 296-127-011 provides for this. There are two different situations that may result in a change to the established prevailing wage rates: 1) an administrative or judicial finding that overturns the established rate, or 2) the correction of an error. In the event that either of these circumstances occurs, L&I is required to publish the corrected prevailing wage rate and the corrected rate then becomes effective 30 days after such publication.

In practice, it appears that L&I does not distinguish between publication and effective date for changes in prevailing wages. My observation has been that when an error is noted by the Department, they will send a notice to those on their e-mail notification list informing them of the change, but the change has already been incorporated into the published prevailing wages online on L&I's website without waiting the required 30 days.

This practice of L&I makes it difficult for public agencies to be able to distinguish between printed versions of prevailing wage rates without conducting a classification by classification and wage by wage comparison to determine where any changes may have been made. Changes made by L&I based on errors or other findings are not separately identified in the published wage rates and do not include separate effective dates for the changed prevailing wage rates, as the WAC suggests should occur.

Emergencies: WAC 296-127-011 does authorize the director of the Department of Labor and Industries to determine that a changed prevailing wage rate is an emergency that must become effective immediately. Thus, given the practice of L&I to make corrections effective immediately, it appears that they are determining that each of these changes constitutes an emergency. However, there is never an accompanying determination by the director of the Department. Furthermore, it seems unlikely that all of the corrections could be emergencies, especially when they correct a wage rate under a listing of prevailing wages that is more than six months old and that has been superseded by the new wage rates.

Such a practice by L&I, whether an emergency or not, is problematic for public agencies. For example, let's say that a public agency includes the prevailing wages effective August 31, 2008 in the bidding documents for a project. The bidding documents are published on November 5, 2008, using the prevailing wage rates obtained from the Department's website. On November 19, 2008, the dame day as the deadline for bid submittal, the Department issues a corrected prevailing wage rate for a classification of labor. The public agency either isn't aware of the change or doesn't have time to respond to the change by issuing an addendum to the bidding documents. Bids are opened and the contractor would have based its bid on the prevailing wages included in the bidding documents, believing that those were the ones effective for the project, since they were effective on August 31, 2008. The contract is awarded to the contractor who proceeds to pay the workers the prevailing wages as published in the bidding doucments. One of the workers then files a claim, asserting that the prevailing wage rate in effect as of the bid opeing date was different that what was published in the bidding documents, based on the correction made by L&I. What are the correct prevailing wages? What party is liable for any back wages that may be due?

Without proper publication and notification, changing prevailing wages at various times during the year, other than the beginning of March and the end of August may be problematic for both contractors and public agencies.