When preparing for a project that falls under Prevailing Wage Requirements, it can sometimes feel like we need a secret decoder ring to decipher an employee’s Wage Determination. Hopefully we can clear up this mystery for you.
Your project’s Wage Determination Period is determined by when the project was first advertised. Each year is broken into two sections: Period 1 are projects having an Advertisement (verbal or print) date between March 3rd (if a leap year), March 4th (non-leap year) to August 31st. Period 2 are projects with Advertisement dates between September 1st and either March 2nd (leap year) or March 3rd (non-leap year). For example, if your project advertised on June 29th, 2019, the project Wage Determination Period would be 2019-1. It’s important to know these dates when preparing to release a bid advertisement, if you want to ensure that a project falls into a specific Wage Determination Period.
All prevailing wage rates change over time. If there is a “predetermined” date to change the wage rate the expiration date will have a double asterisk “**” following it, which means the determination will change on that day. So even if you are in the middle of a project and the expiration date takes place during your project, you are required to update your workers’ wages.
Now, what if there’s only one asterisk “*” next to the expiration date? This means there isn’t a “predetermined” change to the wage. The rate listed for that Wage Determination will stay the same for the entirety of the project, whether the project lasts (6) months or (6) years. This means, if you have a project in the Determination period of 2019-1 and that particular Wage Determination, – let’s say Operating Engineer – has a “*”, no matter how long your project lasts, that is the Wage Determination you use to pay your Operating Engineers.
If on the same project you also have Laborers (and it has a Wage Determination with a “**”), the wages must be changed as dictated by the DIR. Looking at the same Laborer – working on a 2019-1 Determination period with a “**”- how do we know what those wage changes are? How do we know when the increase will take place or by how much? The DIR provides all of the predetermined wage increases. It will list the date of the increase in which it will take effect, as well as allocate the increase to the various fringes / wage. On this same example of a laborer for 2019-1, there is an hourly increase on July 1, 2019 of $2.05. The $2.05 is allocated as follows: $1.00 to Basic Hourly Rate, $0.15 to Health & Welfare, $0.87 to Pension, and $0.03 to Vacation. The next increases will take place on July 1, 2020 and again the following year. If this is a multiple-year project, the Laborer’s wage needs to increase accordingly and an updated Fringe Benefit Statement will need to be provided to the Labor Compliance Administrator.
Overall, it is important to remember the Advertisement date determines the Prevailing Wage Rate and a single asterisk* or double asterisk** determines whether or not there is an increase.