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Welcome To The Minne s ota Statewide Prevailing Wage (PW) Compliance Workshop PowerPoint Presentation
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Welcome To The Minne s ota Statewide Prevailing Wage (PW) Compliance Workshop

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Welcome To The Minne s ota Statewide Prevailing Wage (PW) Compliance Workshop

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Welcome To The Minne s ota Statewide Prevailing Wage (PW) Compliance Workshop

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Presentation Transcript

  1. A basket contains 5 apples. Do you know how to divide them among 5 people so that each person gets 1 apple and 1 apple stays in the basket?

  2. 4 people get an apple (one for each of them) and the fifth person gets the basket with an apple in it.

  3. Welcome To The Minnesota StatewidePrevailing Wage (PW) Compliance Workshop Presented by:Clancy Finnegan and Charles Groshens Other State and Federal Agencies

  4. Things To Note • Registration • name tag • blue folder • calculator • Restrooms • Snacks and beverages • Cell phones off or vibrate • Lunch • Evaluations • Professional Development Hour certificates • • Questions

  5. Course Documents • Course agenda • Workshop folder • PW Law Handbook • Forms Section • Other Contents • Resource table • DVD • RTN • Other handouts • PDH Certificate • Course Evaluation

  6. Workshop Purpose

  7. To educate contractors about the federal and state PW regulations, and • to provide direction on how to properly demonstrate compliance. Classification Wages Reporting • However, the LCU recognizes that each contractor and project/contract is unique and that other methods may be utilized to demonstrate compliance. • Funding and federal/state law clarification.

  8. What Is Prevailing Wage (PW) and Why Is It Important?

  9. What • Federal and State minimum wagelaws. • Applicable to contractsfunded in whole or partwith federal and/or state funds. • Local Ordinances • Wages and fringe benefits established are based on data provided by contractors through a voluntary, periodic survey process. • The intent is to establish wages and fringe benefits that are reflective of the area where the project is located, which

  10. Why • prevents local wage standards from being undercut. • Promotes competitive bidding by establishing a wage standard that all contractors must follow. • Non-compliance – bidding advantage • Tends to attract a workforce that is well trained; resulting in quality workmanship and projects that are completed on time and on budget.

  11. True or False? Prevailing wage regulations only apply to construction contracts that are funded in whole or part with state and/or federal funds. • True or False? Prevailing wage rates are solely based on union pay scales.

  12. Role Of The LCU?

  13. To ensure that the labor specifications incorporated into a contract funded in whole or part with federal and/or state funds are followed. The specifications include but are not limited to: • federal Davis-Bacon and Related Acts • Minnesota prevailing wage law • wage determinations (federal and/or state) • state truck rental rates (MnDOT Only) • Provide contract administration assistance and education to contractors and the Contracting Agency (CA), and Special Provisions Division A

  14. Investigate allegations regarding violations of the contract provisions which may entail • analyzing various records, • issuing determinations, • processing restitution • compliance orders, and • referring matters to other governmental authorities for administrative, civil or criminal action.

  15. Role Of The Contracting Agency (CA)

  16. The CA includes • state personnel (DOT, DNR, PCA, PFA, MNSCU, etc.), • county / city personnel (State-Aid, Schools, etc.), and • consulting firms. • a representative of MnDOT, the CA is also required to ensure that all contractors comply with the federal and state prevailing wage laws. • Failure to enforce could subject the CA to possible legal actions and loss of funding. • Again, the main goal is to ensure that a contractor complies with the proper Classifications Wages Reporting

  17. Case History

  18. MnDOT/County/USDOT Investigation Closed • St. Cloud contractor plead guilty to “Theft By Swindle” in January 2013 and agreed to: • a felony, • $52,000 restitution, and • local, state and federal debarment. • MnDOT will be working with the prime contractors on approximately 85 other contracts to recover $200,000 in restitution. • MnDOT/FBI Investigation Closed • So. St. Paul contractor plead guilty in July 2011, to $185,000 in wage fraud for 27 employees, and sentenced to 15 months in prison.

  19. Classification Definitions • Laborers • Specialty Crafts • Classification Clarification • 110 - Survey Field Technician • 112 - Quality Control Tester • 203 - Landscape Equipment • 205 – Pavement Marking/Removal Equipment • 303 – Concrete Pump • wT – CRLMS (Civil Rights & Labor Management System) • SWIFT Number & Vendor Forms(Refer to Handbook) • Link provided on the LCU website homepage or by contacting • Minnesota Management and Budget (MMB) helpline at (651) 201-8106 or

  20. Labor Classifications

  21. Who is subject to PW • A laborer or mechanic (worker) that performs “work” under a contract. • Work is considered duties that are manual or physical in nature as distinguished from mental or managerial duties. • Workers include (Refer to CPR Lesson WD) • Laborers • Specialty Equipment Operators • Equipment Operators • Truck Drivers • Skilled Journeyman • Carpenters • Electricians • Ironworkers • Plumbers, etc.

  22. A worker must be classified based on the actual work performed regardless of the worker’s skill level.

  23. To determine an applicable state classification of labor, the contractor must classify a worker based on a “same or similar trade or occupation”. In order to do this, the contractor shall refer to the • wage decision(s) incorporated into the contract, • the MN definition rules (refer to handbook), or • the Dictionary of Occupational Titles (O*NET OnLine) • Contact the LCU for assistance. Disputes require a CCRF, which will be forwarded to MnDLI for a determination.

  24. Refer to Form Section of Handbook

  25. Federal MissingClassificationProcess

  26. Prior to Bid Opening (Federal Funds) • Because of the recent adoption of the state highway rates, most classifications should be included in the federal wage decision and have a wage rate. However, if not • The contractor shall • compare the labor classifications contained within the federal general wage decision with those anticipated to be utilized on the project to identify missing labor classifications, and • estimate labor costs for bidding. (refer to page 18)

  27. Once bids are opened & contract awarded • The contractor shall • review the federal general wage decision at the preconstruction meeting, and • complete and submit Standard Form 1444 to the project engineer (PE) for any labor classifications missing from the decision. • The PE will work with the LCU to get the form processed. • Once the contractor has received the processed document, it shall place it on the poster board and notify all contractors utilizing this trade.

  28. Case Example • What labor classification is applicable for the removal and encapsulation of metal handrails containing lead? • Contractor submitted CCRF – (laborer – hazardous material handler), • LCU reviewed the definition rules and suggested a 729 – Asbestos Abatement Worker or Environmental Remediation Worker. Nature of work performed by this trade includes lead abatement and mold removal. • MnDLI concurred with the LCU; contractor was required to compensate the worker at the 729 total hourly rate. • Contractor also submitted a RFAACR – classified worker as a laborer – hazardous material handler. • USDOL accepted contractor’s classification and wage rate. • Because the state hourly rate was higher than the federal, the contractor was required to pay the higher of the two rates.

  29. Commonly misused classification include • Common Laborer (101) • Skilled Laborer (102) (definition - limited trades) • Landscape Laborer (103) • Landscape Equipment (203) vs. Heavy Equipment • Mechanic-Welder (601) (318) (Special Craft - Ironworker) • Greaser (610) vs. (392) • These classifications are often utilized because they are generally the lowest paid. • THIS IS NOT ALLOWED. • Workers must be classified and compensated for the actual work performed regardless of the worker’s skill level.

  30. What is an apprentice • A person enrolled in a formal system of employee training that combines on-the-job training with related technical instruction. • The program is designed to produce specialty craft workers that are fully competent in all aspects of an occupation.

  31. If the program and the apprentice are bona fide, an apprentice is not subject to the federal and/or state prevailing wage laws, provided the contractor can demonstrate the following • the apprentice is performing the work of the trade, • the apprentice is registered with the USDOL or the MnDLI, • the apprentice is compensated according to the rate specified in the program based on level of progress, • the ratio of apprentices to journeymen on the project is not greater than the ratio permitted for the contractor’s entire work force under the registered program. (page 9)

  32. If a contractor fails to comply with the terms of the apprenticeship requirements, the contractor shall compensate its worker not less than the applicable total prevailing wage rate for the actual work performed.

  33. When are owners, supervisors and foreman subject to PW • Pursuant with federal regulations, owners, supervisors or foremen who devote more than 20 percent of their time during a work week to laborer or mechanic duties are considered laborers or mechanics for the time so spent and are subject to prevailing wage. • (Aeronautic projects, Army Corps of Engineers projects, etc.) • Pursuant with state regulations, owners, supervisors or foremen performing work as a laborer or mechanic are subject to prevailing wage for the time so spent.

  34. When are owners, supervisors and foreman not subject to PW • Not engaged in or performing work on the project, or • duties are primarily administrative, executive or clerical. • If this is the case, these individuals do not need to be reported.

  35. Are family members, relatives or self-employed contractors subject to PW • Both the federal and state prevailing wage regulations do not provide an exemption for family members, relatives or self-employed contractors that are performing workunder a contract. • These individuals are considered laborers or mechanics and must be classified and compensated appropriately for the actual work performed.

  36. Can young persons perform work on a construction project • Both the federal and state labor laws attempt to protect young people from working in professions that are considered dangerous or hazardous. Therefore, • no worker under the age of 18 will be allowed to perform work on a construction project. (FLSA Requirement) • In order to ensure compliance the project engineer (PE) or a representative of the PE may • request proof of age for any worker that appears to be under the age of 18. • If proof cannot be provided, the worker will not be allowed to continue work until the worker can demonstrate proof of age and compliance with all applicable federal and/or state regulations.

  37. True or False? Only union contractors can create an apprenticeship program. • True or False? If a person works in more than one classification during a day, the contractor should assign that person the classification with the highest pay rate. • True or False? An bona-fide electrical apprentice is exempt from PW when performing carpenter work?

  38. WagesandOvertime

  39. PW = Basic Wage Rate + Fringe Benefit Rate • To demonstrate compliance • a contractor must compensate a worker at a minimum, a combination of cash and fringe benefits that meets or exceeds the total PW rate required for a specific labor classification. • Wages are reflected in a state and/or federal WD incorporated into a contract. (Provide to Subs)

  40. A contractor assigns a worker a “Common Laborer” classification; the wage decision incorporated into a contract requires the following • Basic Hourly Rate $12.00 • Fringe Benefits $ 2.00 • TOTAL Prevailing Wage $14.00 • A contractor may comply by paying the following hourly rates: • $12.00 as a wage plus $2.00 in fringe benefits, • $14.00 as a wage with NO fringe benefits, • $13.00 as a wage plus $1.00 in fringe benefits, • $11.00 as a wage plus $3.00 in fringe benefits.

  41. What is a federal general decision • A wage decision or WD established by the USDOL, • must be physically incorporated into a federally funded contract, • it’s usually specificto a county and state; (regional for highway) • does not crosscounty, state or regional boundaries (various locations require multiple WD’s), and • USDOL adopted state highway rates 2010. • Categories include • Laborers, Heavy Equipment Operators, Truck Drivers and Special Crafts.

  42. Types of federal wage decisions • Building • Construction, rehabilitation and repair of sheltered enclosures with walk-in access to house persons, machinery, equipment or supplies. • Highway (adoption of state rates) • Construction, alteration or repair of roads, streets, highways, runways, parking areas and other paving work. • Heavy • “Catch All” category. • Residential • Construction, rehabilitation and repair of single family houses, townhouses and apartment buildings not more than 4 stories.

  43. Refer To EXHIBIT A Pages 18 - 20