Mike Purdy's Public Contracting Blog: Prevailing Wages

Showing posts with label Prevailing Wages. Show all posts

Thursday, February 19, 2015

New Prevailing Wages Effective March 4, 2015

The Washington State Department of Labor and Industries published updated prevailing wages on February 2, 2015. According to WAC 296-127-011, the new prevailing wages will become effective 30 days later, or on March 4, 2015.

Effective Date for Projects: For any public works project with a bid submittal deadline of March 4, 2015 or later, the new wage rates will be in effect. For projects advertised prior to March 4, 2015, but which have a bid submittal date of March 4, 2015 or later, public agencies should issue an addendum with the revised prevailing wage rates. To look up the new wage rates, visit Labor and Industries' website.

Current Prevailing Wages: Projects with a bid opening date of March 4, 2015 or earlier are governed by the current prevailing wage rates dated August 31, 2014. Labor and Industries publishes corrections to prevailing wages on their website.

Notifying Contractors of Applicable Wages: It is important for public agencies to make sure that the correct prevailing wage rates are either included in the bidding documents for any public works project bidding on or after March 4, 2015, or that the bidding documents reference L&I's website and include other information. See my previous blog entry on incorporation of the prevailing wage rates by reference.

No Incorporation by Reference of Federal Wages: For federally funded projects, the actual federal prevailing wage determination must be physically included in the bidding and contract documents, and may not be just included by reference. In order to eliminate confusion on federally funded projects, the best practice is to also physically include the state prevailing wages in the bidding and contract documents, even though it is permitted that Washington state prevailing wages may be incorporated by reference.

Differences Between Federal and State Wages: On federally funded projects, both federal and state prevailing wages apply and the contractor is required to pay the higher of the two wages for any classification of labor. Public agencies should ensure that language to this effect is reflected in their bid and contract documents.

Presidential History:

Presidential History Blog: While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com. On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

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Tuesday, January 20, 2015

Training: Public Works Bidding and Contracting

2 Day Class on "Public Works Bidding and Contracting"

Mike Purdy

When: February 26-27, 2015 (8:00 am to 5:00 pm)

Where: Kennewick, Washington

Instructor: Mike Purdy

Training Outline: This two day "Public Works Bidding and Contracting" class will cover the following subjects:

Types of Public Works Contracts
What is a Public Work, Ordinary Maintenance, and Maintenance?
On-Call Public Works Contracts and the State Auditor's Office
Small Works Rosters
Developing Bid Documents
Bid Receipt and Opening
Bonds and Insurance
Bid Responsiveness
Bidder Responsibility
Bidding and Award
Prevailing Wages
Change Orders
Retainage and Contract Close-out

Cost:

$140 - WA NIGP Chapter members
$180 - Non-WA NIGP Chapter members

Sponsored by: Washington State Chapter of NIGP

Information and Registration: Click here. Don't delay as decision whether there are enough registrants to hold the class must be made in the next week or so.

When Do Federal Prevailing Wages Apply to a State or Local Agency Project?

Many public works construction projects are funded through multiple funding sources, often involving local, state, and federal sources.

$1 taints the pot: Even if a project includes just a small dollar amount of federal money, the entire project becomes subject to federal prevailing wage requirements.

Bid form structure doesn't control: Some agencies may include different bidding schedules for different portions of the work on the bid form for a project - some of which are funded with federal dollars and others with state or local dollars. However, if the bid schedules are all part of one bid, one project, and one contract, then the entire project becomes subject to federal prevailing wages.

Wednesday, November 19, 2014

What Requirements Still Apply for Emergency Public Works Contracts?

When a public agency has declared an emergency and waived competitive bidding requirements for a public works construction project, what is being waived is the contractor bidding and selection process. In other words, under an emergency contract seeking bids is not required.

Not enough time to conduct a bid process: The nature of emergencies dictates that there is not sufficient time to conduct a bid process without raising the risk that individuals may be injured, property damaged, or that the essential functions of government may not be fulfilled. The definition of an emergency public work varies by state. In Washington state, it is defined in RCW 39.04.280.

What is required for emergencies: The following is a list of some of the requirements that still apply for emergency public works projects. Generally, only the selection process is waived through the emergency declaration. While this list is based on Washington state law, portions of it may also apply for other states, depending on their specific requirements:

Declaration of emergency: A formal declaration of an emergency must be made. See RCW 39.04.280.

Bidder Responsibility: The mandatory bidder responsibility criteria of RCW 39.04.350 still apply for emergency contracts.

Contract: There should still be a public works contract documenting the various requirements and the dollar amount of the project, even if it is for a time and materials, not-to-exceed amount.

Prevailing wages: Prevailing wages must still be paid consistent with the requirements of RCW 39.12.

Intent: A Statement of Intent to Pay Prevailing Wages must be approved by the Department of Labor and Industries and filed with the public agency prior to making any payments to the contractor. A separate Intent must be completed for the contractor and each subcontractor, regardless of tier.

Affidavit: An Affidavit of Wages Paid must be approved by the Department of Labor and Industries and filed with the public agency prior to making payment of retainage to the contractor. A separate Affidavit must be completed for the contractor and each subcontractor, regardless of tier.

Bonds: A payment and performance bond must be submitted to the agency for the work, in accordance with RCW 39.08.

Insurance: The amounts and types of insurance required on a public works project are governed by each agency and not by Washington state law.

Retainage: Retainage should be withheld from each progress payment. See RCW 60.28. The only exceptions to not withholding retainage is if a retainage bond is submitted by the contractor or if the contractor was selected through the Limited Public Works process under the Small Works Roster (for public works projects less than $35,000), in which case there would have been no need to waive the competitive bidding process.

Timing of emergencies: While the above items are still required under Washington state law for an emergency public work, agencies must ensure that health, safety, and property are protected and that an agency's essential functions continue to serve the public. Sometimes, due to the emergency nature of the project, it is important to get a contractor on the job site immediately, perhaps in the middle of the night, to address the emergency. In such a case, often some of the paperwork requirements are addressed after the fact.

Emergency procedures: Washington state law does not have exemptions for public works requirements on emergency projects, other than for the actual bidding and selection process. It is important that each public agency have clear emergency public works procedures that will dictate:

Compliance: The timing of compliance with the requirements of state law.

Authorization: Who within the agency is authorized to declare an emergency and waive competitive bidding. This person or persons should be available at any time, which is why it is often problematic to dictate that only an elected board or council may waive competitive bidding.

Tuesday, November 18, 2014

Receiving and Checking Certified Payrolls on Federally Funded Projects

One of the requirements that comes with federal funding of a public works construction project is the requirement for the public agency to receive and check weekly certified payrolls from the contractor and all subcontractors. This process helps to ensure that all workers are being paid at least the prevailing wage rate for the classification of labor they performed.

What should be monitored? Because the federal Davis-Bacon Act (prevailing wage) requirements are applicable on all federally funded projects, state and local agencies need to have a process in place to ensure:

Timeliness: Payrolls are received in a timely manner. The Davis-Bacon Act requires that workers be paid weekly, and payrolls must be submitted to the agency weekly.

Completeness: Payrolls must be received for the contractor and all subcontractors, regardless of tier. This means that public agencies need to have an accurate process for identifying what subcontractors are working on the project.

Interviews: The public agency must conduct field interviews of workers employed by the contractor and subcontractors to collect information on what they state they are being paid. The results of these interviews must be correlated with the payroll reports submitted to determine if there are any discrepancies between what a worker states he or she is being paid and what the payrolls reflect they are being paid.

Review: Payrolls must be reviewed and monitored on a weekly basis to identify any questions or potential underpayments of prevailing wage to workers.

Audit findings: The following agencies were recently the subject of audit findings from the Washington State Auditor's Office for failure to collect and monitor prevailing wages on federally funded projects:

Wednesday, October 29, 2014

Prevailing Wage Underpayments: Contractor Pays $200,000 in Back Wages

After a worker complaint and investigation by the Washington Department of Labor and Industries, a Colorado contractor working on a Whatcom County (WA) jail project has paid almost $200,000 in back wages due to the workers.

Workers were not apprentices: The 13 workers were paid apprenticeship wages rather than the journey level electrician prevailing wages. "In this case," noted Jim Christensen, Washington's prevailing wage manager, "the employees were doing the work of electricians and were not part of any state-registered apprenticeship program."

Contractor paid back wages in August: The prevailing wage violation was the first one for Sierra Detention Systems, who contracted with the County for a $2 million contract. In August, the company paid Labor and Industries $196,214.40 that will be disbursed to the underpaid workers.

Fairness in bidding: Given state and federal prevailing wage laws, when a contractor does not pay the prevailing wages, it directly impacts the integrity of the competitive bidding process. Public agencies that receive federal funding for a public construction project are required to monitor whether the workers are being paid at least the prevailing wage rates for the type of work being performed. Click here for an earlier blog I wrote on monitoring federal prevailing wages.

News release: Click here for a news release on the Colorado contractor underpayments, published by the Washington Department of Labor and Industries.

Wednesday, August 6, 2014

New State Prevailing Wages Effective August 31, 2014

The Washington State Department of Labor and Industries published updated prevailing wages on August 1, 2014. According to WAC 296-127-011, the new prevailing wages will become effective 30 days later, or on August 31, 2014.

Effective Date for Projects: For any public works project with a bid submittal deadline of August 31, 2014 or later, the new wage rates will be in effect. For projects advertised prior to August 31, 2014, but which have a bid submittal date of August 31, 2014 or later, public agencies should issue an addendum with the revised prevailing wage rates. To look up the new wage rates, visit Labor and Industries' website.

Current Prevailing Wages: Projects with a bid opening date of August 30, 2014 or earlier are governed by the current prevailing wage rates dated March 5, 2013. Labor and Industries publishes corrections to prevailing wages on their website.

Notifying Contractors of Applicable Wages: It is important for public agencies to make sure that the correct prevailing wage rates are either included in the bidding documents for any public works project bidding on or after August 31, 2014, or that the bidding documents reference L&I's website and include other information. See my previous blog entry on incorporation of the prevailing wage rates by reference.

No Incorporation by Reference of Federal Wages: For federally funded projects, the actual federal prevailing wage determination must be physically included in the bidding and contract documents, and may not be just included by reference. In order to eliminate confusion on federally funded projects, the best practice is to also physically include the state prevailing wages in the bidding and contract documents, even though it is permitted that Washington state prevailing wages may be incorporated by reference.

Differences Between Federal and State Wages: On federally funded projects, both federal and state prevailing wages apply and the contractor is required to pay the higher of the two wages for any classification of labor. Public agencies should ensure that language to this effect is reflected in their bid and contract documents.

Monday, August 4, 2014

New Law Exempts Some Contractors From Paying for an Affidavit of Wages Paid Form

The Washington State Legislature approved a new law that waives the fee for filing an Affidavit of Wages Paid for contractors on public works projects who are exempt from the requirement to pay prevailing wages.

Who is exempt from prevailing wages? According to WAC 296-127-026 the prevailing wage requirements of chapter 39.12 RCW do not apply to certain individuals:

Sole owners and their spouses
Any partner who owns at least 30% of a partnership
The president, vice-president, and treasurer of a corporation if each one owns at least 30% of the corporation

If one of the above-mentioned entities has employees, those employees must still be paid the applicable prevailing wages.

Filing Intents and Affidavits: Even though some individuals, as noted above, are exempt from the prevailing wage requirements, the contractor must still file Statement of Intent to Pay Prevailing Wages and Affidavit of Wages Paid forms with the Department of Labor and Industries for approval. Public agencies must have a copy of the approved Intent for the contractor and all subcontractors prior to making payment to the contractor, and must have the approved Affidavit from the contractor and all subcontractors prior to release of retainage.

New law makes some Affidavits free: Under the provisions of Substitute House Bill 1254 that was approved during the 2014 legislative session, and is now included in RCW 39.12.070, individuals who are exempt from paying themselves prevailing wages (see above) must still file the Intent and Affidavit, and pay the $40 for each Intent, but the $40 fee for the Affidavit will not be charged by Labor and Industries. The new law became effective on June 12, 2014.

More information: Click here to read a Question and Answer page developed by the Department of Labor and Industries.

Sunday, July 13, 2014

Washington State Plans to Audit On-Call Public Works Contracts

The Washington State Auditor's Office has announced that one of the areas they intend to focus on when they audit public agencies relates to On-Call Public Works contracts.

Controversial topic: This has been a controversial topic given that the Auditor's Office statements on the subject have not recognized the critical operational importance for many agencies to use On-Call Public Works contracts in order to provide basic services. In addition, the Auditor's Office has not been forthcoming with specifics of what their concerns are and what they will be looking for in their audits.

Previous Auditor position: Almost two years ago, the Auditor's office issued a statement expressing their concerns about On-Call Public Works contracts. Click here to read my earlier blog post when their initial statement came out.

Heads-up on audit topics: In their newly issued edition of The Audit Connection, dated Summer 2014, the Auditor's Office wrote the following introductory statement providing a "heads-up" to agencies about their upcoming focus on audits:

Which agencies will be audited? Based on the Auditor's statement above, it appears they may only be focusing on cities and counties with respect to On-Call Public Works contracts. However, it is unclear whether their audit activities relating to On-Call Public Works contracts will extend to other types of agencies such as port districts, school districts, water-sewer districts, public utility districts, etc.

What will be audited? Using very similar language to their statement from almost two years ago, the Auditor's Office included the following paragraph in their Summer 2014 edition of The Audit Connection, identifying "Using on-call contracts for public works" as one of a number of topics they plan to focus on for upcoming audits:

Lack of clarity: It is not clear from the Auditor's Office statement whether they intend to issue audit findings for all agencies using On-Call Public Works contracts, or if they will be looking to see whether agencies have established policies, procedures, and internal controls to ensure compliance with various laws. The Auditor's Office has not been clear in any of their statements specifically what their areas of concern are with respect to On-Call Public Works contracts, other than their broad statement of "public works contracting statues" and "prevailing wage statues."

Moving forward: Public agencies should carefully evaluate their practices and policies regarding On-Call Public Works contracts, and should consult with their attorneys in evaluating the risks to their agencies.

Monday, April 21, 2014

Prevailing Wage Dispute in Central Washington

Should prevailing wages have been paid to workers for the construction of a privately-funded $960,000 building that the private owners have leased to a public agency, the Mid-Columbia Libraries, for the west Pasco branch of the library? The new library opened in April 2013.

Wage compliant filed: A complaint was filed with the State Department of Labor and Industries arguing that prevailing wages should have been paid, something that the private owners of the building suggest may cost them an additional $25,000. The private owner argues that "this is not a public works project. This is privately owned by my wife and I and built for investment purposes." The library district and their attorneys have stated that prevailing wages do not apply for the construction of the building.

Is the project a public work? In Washington state, prevailing wages apply for projects that meet the definition of a public work: "work, construction, alteration, repair, or improvement...executed at the cost of the state or of any municipality." (emphasis added) (RCW 39.04.010) In this particular instances, the building does not appear to have been constructed at the cost of the library district, and thus, based on this definition alone, it would appear that prevailing wages did not need to be paid.

Is the project a lease back project? Even when a project is not "executed at the cost" of a public agency, RCW 39.04.260 requires that prevailing wages must be paid on any "work, construction, alteration, repair, or improvement" that a public agency "causes to be performed by a private party through a contract to rent, lease, or purchase at least fifty percent of the project." While the private construction of the library building is part of a larger private development, there was apparently a separate contract for the library building. Thus, the argument can be made that 100% of the "project" is being leased by the library district, which would then make the project subject to prevailing wages. Is the "project" just the library building or the larger planned development?

Public-private partnerships: Public-private partnerships raise a variety of questions, including payment of prevailing wages. Parties entering into public-private partnerships need to carefully investigate all of the potential ramifications of the agreement before moving forward.

Additional information: Additional information about the Pasco prevailing wage dispute may be found in an April 5, 2014 article published by the Tri-City Herald: "State looking into Pasco library worker's wage dispute."

Monday, March 24, 2014

Bill Requiring Certified Payroll Reports Not Approved by Legislature

The Washington State Legislature did not approve a bill (HB 2331) that would have required public agencies to withhold payment to contractors until receipt of weekly certified payroll reports from the contractor and all subcontractors. It passed the House, but did not come to a vote in the Senate.

Responsibilities and liabilities: While the bill stated that public agencies would have no liability for the accuracy of the payrolls, testimony by representatives from labor unions in support of the bill indicated an assumption that public agencies would be reviewing the payrolls for accuracy of worker classifications. The bill is unclear about what the responsibilities and liabilities public agencies would have under the proposed legislation.

Previous blog: Click here to read my summary of the bill in my blog from February 23, 2014.

Senate hearing: Click here to watch and listen to testimony pro and con on HB 2331 before the Senate Commerce and Labor Committee on February 21, 2014.

Monday, March 17, 2014

Training: Prevailing Wage Law in Washington

Prevailing Wage Law in Washington

When: Wednesday, April 16, 2014(8:00 a.m. to 4:40 p.m.)

Where: Seattle, Washington (Washington State Convention center, 800 Convention Place)

Agenda and Instructors:

Washington State Prevailing Wage on Public Works Act (David J. Soma)

Plaintiffs' Perspective on Prevailing Wage Claims (Marc Cote)

Project Labor Agreements (Iam M. Messerle)

Bid and Contract Documents Regarding Prevailing Wages (William A. Linton)

Public Owner Remedies for Noncompliance (William A. Linton)

Employer Compliance Issues and Best Defense Strategies (Judd H. Lees)

Cost: $369

Sponsored by: Lorman Education Services

Information and registration: Click here.

Sunday, February 23, 2014

Bill Requiring Certified Payrolls on Public Works Passes Washington State House of Representatives

On February 13, 2014, the Washington State House of Representatives approved (on a 54 - 44 vote) HB 2331 that would require all public agencies in the state to obtain certified payroll reports from the contractor and every subcontractors before making any payment on a public works project.

Bill may increase cost of public works projects: There is currently no state law that requires submission of payroll reports to public agencies, and HB 2331 imposes a major new requirement. The bill will delay payments to contractors (and subcontractors), discourage contractors from bidding public works projects, and potentially result in increased bid prices to public agencies due to:

Less competition: A more limited pool of contractors bidding public works projects

Cost of managing new requirement: Contractors bidding more to manage the collection and submission of the payroll reports

Cost of delayed payments: Contractors bidding more to compensate for delayed payments from public agencies.

Payrolls already required for federally funded projects: Only if a project is federally funded are certified payrolls required. Public agencies already have the contractual right to withhold payment in the event that payrolls have not been submitted on a federally funded project. A new law that applies to all public works projects regardless of funding represents a major new requirement for public works contracting.

Payroll submission already required by regulations: WAC 296-127-320 already provides the option for Labor and Industries or an interested party to request certified payrolls on a public works project. Mandating that certified payrolls be submitted on all public works projects by all contractors and subcontractors is not necessary and complicates public works bidding and contract administration.

What must a public agency do with the payrolls? Interestingly, HB 2331 does not say that a public agency must do anything with the payroll reports other than collect them prior to making payment to the contractor. In fact, the bill implies that a public agency's only role is to collect the payroll reports: "The awarding agency shall be held harmless and is not liable for the currency, completeness, or accuracy of certified payroll records submitted under this section."

Managing confidential information: Because the payroll reports will become a matter of public record once received by the public agency, anyone may request the documents through a public records request (further increasing the workload of public agencies). There is nothing in the bill that protects disclosure of confidential information (Social Security number, address, etc) on the certified payrolls to outside parties.

Impact on small businesses: HB 2331 will have an especially negative impact on small contractors and subcontractors that do not have the administrative support systems in place to comply with this proposed new requirement.

Status of the bill: There was a public hearing on the bill on Friday, February 21, 2014 in the Senate Committee on Commerce & Labor.

Monday, February 10, 2014

New Prevailing Wage Rates Effective March 5, 2014

The Washington State Department of Labor and Industries published updated prevailing wages on February 3, 2014. According to WAC 296-127-011, the new prevailing wages will become effective 30 days later, or on March 5, 2014.

Effective Date for Projects: For any public works project with a bid submittal deadline of March 5, 2014 or later, the new wage rates will be in effect. For projects advertised prior to March 5, 2014, but which have a bid submittal date of March 5, 2014 or later, public agencies should issue an addendum with the revised prevailing wage rates. To look up the new wage rates, visit Labor and Industries' website.

Current Prevailing Wages: Projects with a bid opening date of March 4, 2014 or earlier are governed by the current prevailing wage rates dated August 31, 2013. Labor and Industries publishes corrections to prevailing wages on their website.

Notifying Contractors of Applicable Wages: It is important for public agencies to make sure that the correct prevailing wage rates are either included in the bidding documents for any public works project bidding on or after March 5, 2014, or that the bidding documents reference L&I's website and include other information. See my previous blog entry on incorporation of the prevailing wage rates by reference.

No Incorporation by Reference of Federal Wages: For federally funded projects, the actual federal prevailing wage determination must be physically included in the bidding and contract documents, and may not be just included by reference. In order to eliminate confusion on federally funded projects, the best practice is to also physically include the state prevailing wages in the bidding and contract documents, even though it is permitted that Washington state prevailing wages may be incorporated by reference.

Differences Between Federal and State Wages: On federally funded projects, both federal and state prevailing wages apply and the contractor is required to pay the higher of the two wages for any classification of labor. Public agencies should ensure that language to this effect is reflected in their bid and contract documents.

Tuesday, January 28, 2014

Washington Appoints New Prevailing Wage Manager

The Washington State Department of Labor and Industries has appointed Jim Christensen as the new Prevailing Wage Program Manager/Industrial Statistician, effective January 1, 2014.

Jim is no stranger to L&I and prevailing wages as he held the same position for more than ten years from 1993 to 2003. Welcome back, Jim!

Tuesday, January 21, 2014

Proposed Bills Affecting Public Contracting in Washington State

The following bills affecting public contracting have been introduced into the Washington State Legislature this session:

Allow local agencies to waive prevailing wages: House Bill 2299 would allow "a county, municipality, or political subdivision of the state" to waive prevailing wage requirements for public works contracts estimated to cost less than $5 million dollars. The waiver could also apply for public building service maintenance contracts (janitorial, shampooer, window washer, waxer). In order to opt out of the prevailing wage requirements of Chapter 39.12 RCW, the governing body of the public agency would need to approve such a waiver by a majority vote. The legislation specifically would permit public agencies to subdivide public works projects in order to come in under the $5 million threshold.

Require certified payrolls prior to paying contractors: House Bill 2331 would require a public agency to obtain certified payroll records from the contractor and all subcontractors prior to making any payment to the contractor, and would also require the payrolls prior to final payment and release of retainage to the contractor.

Relax various prevailing wage requirements: Senate Bill 6186 would do the following:

Apprentice use on WSDOT projects: Reduce apprenticeship percentages required on WSDOT projects from 15% to 13% and increase the threshold of which projects apprenticeship applies to from $2 million to $4 million.

Electronic surveys: Require the Department of Labor and Industries to provide contractors with the option of completing prevailing wage surveys electronically.

On-Site work only: Restrict the applicability of prevailing wages only to workers "employed directly on the site of work," eliminating the impact of court decisions requiring prevailing wages for off-site prefabrication of work performed specifically for a public works project.

Change methodology for establishing prevailing wages: The following three bills address how the Department of Labor and Industries should establish the prevailing wage rates:

Statistical analysis vs. wage surveys: House Bill 2210 would require the Department of Labor and Industries to use a "stratified random sampling methodology," instead of the "wage surveys" currently conducted to establish prevailing wages. It would also exempt data collected by Labor and Industries through this process from disclosure under the state's public records laws.

Survey only non-public works projects: House Bill 2209 would restrict prevailing wage surveys conducted by the Department of Labor and Industries to only "nonpublic work" projects. Behind this bill is the assertion that public works projects, on which prevailing wage must already be paid, artificially inflate prevailing wage rates. The bill would also exempt data collected by Labor and Industries through wage surveys from disclosure under the state's public records laws.

Use only union wage rates to establish prevailing rates: House Bill 2527 would require the Department of Labor and Industries to establish prevailing wages based on collective bargaining agreements, instead of through conducting wage surveys. For trades where there are no collective bargaining agreements, L&I would be required to conduct wage surveys or use "other appropriate methods" to establish the prevailing wage rates.

Civil construction on GC/CM projects: House Bill 2208 would define a "heavy civil construction project" for GC/CM (General Contractor/Construction Manager) projects and permit the GC/CM to self-perform as a negotiated amount up to 50% of the cost of the work, and to bid on other portions of the work agreed to with the public body, provided that at least 30% of the work is competitively bid. The current law requires that a GC/CM must bid to self-perform any of the work and such self-performed work is limited to 30% of the construction cost.

Wednesday, January 8, 2014

Change in Prevailing Wage Reporting Requirement as of January 1, 2014

RCW 39.04.370 requires that public works contracts contain a provision requiring that contractors submit on the Affidavit of Wages Paid form "certain information about off-site, prefabricated, nonstandard, project specific items produced under the terms of the contract and produced outside Washington."

Reporting not applicable for contracts after January 1, 2014: The law applies for public works contracts entered into between September 1, 2010 and December 31, 2013. Therefore, for all public works contracts entered into on January 1, 2014 or later, the language should not need to be included in such public works contracts, and contractors on those contracts are not required to report the information on the Affidavit of Wages Paid.

Reporting still applicable for older contracts: However, for contracts entered into between September 1, 2010 and December 31, 2013, the reporting requirements for contractors still apply.

Review your contracts: Public agencies should review their public works bid and contract documents to delete language related to this off-site prefabrication reporting requirement. Often it is included in a section addressing bidder responsibility criteria. See RCW 39.04.350 (1)(f).

Information to CPARB: The Department of Labor and Industries will report information they have collected under this law to the Capital Projects Advisory Review Board (CPARB) for their review.

Resources: Here are some links giving more background about this requirement:

September 15, 2010 blog posting, with links to earlier blogs explaining portions of RCW 39.04.370

Department of Labor and Industries Questions and Answers

Sunday, November 3, 2013

Free Prevailing Wage Training in Vancouver, WA

Prevailing Wage Workshop for Awarding Agencies

Sponsored by: Department of Labor and Industries and State Auditor's Office

Where: Vancouver L&I Office, 312 SE Stonemill Dr. Ste. 120 Vancouver WA 98684

Cost: Free

Date: November 8, 2013 (1:00 p.m. to 3:30 pm)

Information and registration: Contact Laura Herman at L&I at herq235@LNI.WA.GOV or at (360) 902-5311.

Sunday, October 13, 2013

Free Prevailing Wage Training in Spokane, Washington

Prevailing Wage Workshop for Awarding Agencies

Sponsored by: Department of Labor and Industries and State Auditor's Office

Where: Spokane Community College, Lair Student Center, 1810 N. Green Street, Spokane, WA 99217)

Cost: Free

Date: October 25, 2013 (9:30 a.m. to Noon)

Information and registration: Contact Laura Herman at L&I at herq235@LNI.WA.GOV or at (360) 902-5311.

Tuesday, October 1, 2013

Best Practices for Monitoring Federal Prevailing Wages on Public Construction Projects

Federal prevailing wage requirements on public works construction projects requires that the contractor and all subcontractors, regardless of tier, submit weekly certified payrolls to the public agency.

Audit finding: Some public agencies with federal funding on a project do not pay attention to the requirement for weekly payrolls. Sometimes, they don't collect the payroll reports at all, or they collect them in batches from the contractor (not weekly), or collect them at the end of the project. The largest county in Washington, King County, received a finding in 2012 from the Washington State Auditor's Office (see page 56) for failing to enforce the submission of weekly payroll reports. Instead, the county collected payrolls at the end of their projects.

Best practices: If you have public works construction projects with federal funding, pay attention to the following:

Frequency: Are you collecting payroll reports weekly from the contractor and all subcontractors?

Subcontractors: Do you have a system for determining what subcontractors are working on site?

Reviewing payrolls: Are you reviewing the certified payroll reports on a weekly basis to ensure that prevailing wages are being paid to the workers? As part of your review, are you evaluating the following: a) whether the classifications reported are appropriate, b) the hourly wage rate is at least the prevailing wage rate, c) the proper overtime rates are being paid, d) apprentices are registered apprentices who may be paid less than the journey-level wage, e) the payroll report is signed by an authorized individual?

Documenting your review: Are you documenting your review of the payrolls by marking the payroll reports?

Weekly pay: Are you monitoring to ensure that the contractor and their subcontractors paying their workers on a weekly basis? This is required by the federal Davis-Bacon Act.

Worker interviews: Are you interviewing a representative sample of workers on-site, asking them questions about what work they are performing and how much they are being paid? Are you correlating this information with what is reported on weekly payroll reports?

Invoices: Do you have a process that ties in your approval of a contractor's monthly pay application and invoice with your review and approval of the weekly payroll reports?

Note: This blog posting is a repeat of one from December 4, 2012.

Thursday, February 19, 2015

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Monday, March 24, 2014

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