Prevailing Wage FAQ How does a contractor know what type of construction project is considered a Rhode Island Prevailing Wage project? In RI, Prevailing Wage applies to any public work consisting of grading, cleaning, demolishing, improving, completing, repairing, altering or constructing any public road or bridge or portion thereof or any heavy construction or any public works projects of any nature or kind whatsoever that utilizes $1,000.00 or more of public funds. If the contractor submits 2 or more applicable services during the duration of the contract and/or project and the monies accumulated exceed $1,000.00 of public funds, prevailing wages must be paid. If the overall cost of the project consists of $1,000.00 or more of public funds, a subcontractor must pay its employees the prevailing wage even if the contract between the general contractor and subcontractor is less than a $1,000. Contractors AND Subcontractors working on RI Public Works construction projects must comply with RI General Law 37-13, and RI Prevailing Wage Rules and Regulation. Are Awarding Authorities required to retain RI Certified Weekly Payroll forms from contractors working on Prevailing Wage projects? Yes, every contractor and subcontractor awarded a contract for public works is required to submit completed RI Certified Weekly Payroll forms listing employees employed on the project to the awarding authority on a monthly basis for all work completed in the preceding month. Awarding authorities, contractors and subcontractors shall provide all payroll records to the Dept. of Labor and Training (DLT) within 10 days of any request made by the department. Also, in accordance with RI General Law 37-13-3, employees working on state or municipal funded prevailing wage projects must be paid weekly. Is a contract required on all Prevailing Wage projects? Yes, all prevailing wage work must be done by contract. This is true for both the contract between the awarding authority and the general contractor and the general contractor and subcontractors, as well as between subcontractors. What is the RI Certified Weekly Wage Daily log and when is it required? On a daily basis, every contractor and subcontractor shall maintain on the site where public works are being constructed and the general or primary contract is $1,000,000 or more, a Rhode Island Certified Prevailing Wage Daily log of employees employed each day on that public works project by the contractor or subcontractor. This log shall be available for inspection on the site at all times by the awarding authority and/or the DLT. This requirement does not apply to road, highway, or bridge public works projects. Where can a contractor find the applicable Prevailing Wage cost per hour for the various trades that will be used when making a bid on a RI Public Works project, and how does a contractor know which rates to use? The contractor must refer to the applicable Davis Bacon Wage Determination rate schedule found online at the US Dept of Labor website at https://sam.gov/content/wage-determinations. Prevailing wage rates for the various trades may change at times throughout the year. The prevailing wage rates to be applied are those that are effective as of the date of the awarding of the contract to the general contractor. Contractors working on RI Prevailing Wage projects must also adjust employees’ hourly rates (if applicable) every July 1st in accordance with any updated Davis Bacon Wage Determination rates. How do contractors know what to classify their workers on a RI Prevailing Wage job site? Contractors must refer to the applicable Davis Bacon Prevailing Wage rate schedule to find the classification that coincides with the specific type of work being performed on the jobsite. If the classification of the work being performed on the jobsite is not listed in the Davis Bacon Prevailing Wage rate schedule, contracting officers may request an authorization of additional classification and rate from the US Department of Labor. For instructions on how to do so, you may go to the US DOL website, www.wdol.gov, click on library and then the Conformance Section for instructions and additional information. Should the base rate and the fringe rate be added together to define the cost of the prevailing wage rate per hour? Yes. The base rate and fringe rate must be added together to determine the total prevailing wage hourly rate. An employer may deduct bona fide fringe benefit credits from that rate. If there are no bona fide fringe benefits given, the employer must pay the full amount (the base rate plus the fringe benefit amount) in the hourly pay rate. How do contractors calculate the hourly deduction or credit a contractor may take for the cost of bona fide fringe benefits that the company pays for an employee? In order to compute hourly fringe benefit credits, you may take the employers’ total cost of bona fide fringe benefits provided on an annual basis and divide that number by 2080 (40 hours x 52 weeks) or by actual hours worked (must be documented). EXAMPLE: EMPLOYER PAYS 100% MEDICAL INSURANCE PREMIUM: Monthly premium employer pays on behalf of employee: $350 Annual Cost to employer: ($350 x 12 months) = $4,200 Fringe Benefit Credit: (Divide by 2080): $2.02/hour ($4,200/2080) Sample Prevailing Wage rate: $20.00 base Sample Fringe Benefit: + 10.00 fringe Total hourly wage due: $30.00 Applicable Prevailing Wage Rate: $30.00 Fringe Benefit Credit: -2.02 Adjusted prevailing wage rate owed: $27.98 Fringe Benefit Credits will be applied by subtracting the fringe benefit credit amount from the applicable benefit rate on the prevailing wage rate schedule; any difference remaining after the value of all benefits provided is deducted must be paid hourly as taxable wages in the employee’s pay ch What are examples of bona fide fringe benefits that a company may use in the fringe benefit calculation? Examples include medical or hospital coverage, life insurance, disability insurance (not workers’ compensation), pension, 401k, apprentice costs (books, tuition) or holiday, sick, vacation/personal time. State mandated unemployment insurance, travel, gas reimbursement, company vehicle, uniforms and discretionary bonuses are not bona-fide fringe benefits. In addition, in order for the plan to be acceptable, the following stipulations must be met: Contributions must be irrevocable and for the employee’s benefit; Contributions must be made regularly and at least on a quarterly basis; Contributions must not be required by law (i.e.: taxes, workers’ compensation, social security, etc.); Contributions made for fringe benefit plans for prevailing wage work may not be used to fund the plan for periods of non-prevailing wage work; The amount of contributions for fringe benefits must be paid irrevocably to a trustee or third party; If the fringe benefits are anticipated to be paid from general assets of the contractor (ex. holidays, sick and vacation days, profit sharing, etc.), the contractor must set aside, in an escrow account, the amount of money the contractor plans to claim as a fringe benefit credit for the prevailing wage project. For example, if a contractor wants to claim credit for 10 paid holidays per year, the contractor must calculate the amount that will be paid (10 holidays x 8 hours x $10/hour = $800) and place those funds in an escrow account. In the event that an employee leaves the company before the end of the calendar year and prior to the completion of the project, any remaining escrowed funds must be paid to the employee. The allowable hourly credit must be determined separately and documented for each employee since the credit is based on figures that will usually vary for each individual, depending on their benefit contribution amount, type of benefits, hours worked, etc. In addition, only the employer’s contribution toward a benefit may be used to calculate the allowable hourly credit. What forms are required on Prevailing Wage jobs? All contractors and sub-contractors are required to use the Rhode Island Certified Weekly Payroll and the RI Statement of Compliance form. Use of company payroll forms or other state (MA, CT, etc.) forms is not acceptable. Only employees of the contractor should be listed on the RI Certified Weekly Payroll forms. Subcontractors must do their own separate RI Certified Weekly Payroll form listing all of their workers working on the Prevailing Wage job-site. Federal forms may be used for Department of Transportation projects only. However, if a complaint is being investigated, the DLT will require the contractor under investigation to resubmit the requested payroll information on the Rhode Island Certified Weekly Payroll form for all hours worked on that Department of Transportation project being investigated. When does overtime apply on a RI public works project and how is the overtime rate calculated? A contractor or subcontractor must pay employees overtime when they work over 8 hours in one day or over 40 hours in one week, whichever comes first. The overtime is calculated on the base rate only and then the fringe benefit rate is added to that adjusted figure. (SAMPLE ONLY OF OVERTIME CALCULATION) USE PROPER RATES Base rate: $30.00 Fringe Benefit: 15.00 To calculate the Overtime Rate: $30.00 x 1.5 = $45.00 Plus Fringe Benefit + 15.00 Hourly Overtime Rate $60.00 Is there a supervisor rate for supervisors working on a Prevailing Wage job site? No, there is not a supervisor rate. If a supervisor is performing the same trade work as their subordinates, the prevailing wage rate must reflect the applicable rate of the trade(s) they are supervising/performing, and must be included on the RI Certified Weekly Payroll form. If the company owner works on the job-site, does he/she need to be listed on the RI Certified Weekly payroll form? Yes, an owner performing trade work on the public works job must be included just like every other employee (contact info, hours worked, classification, hourly rate, etc.) Is Prevailing Wage required on service and maintenance contracts? All service and maintenance contracts with the State of Rhode Island shall comply with the provisions of RI General Law 37-13 where the contract price exceeds $1,000.00 and the work includes alterations, installation, repairs or construction. Refer to the definition section of the Rules and Regulations relating to RI Prevailing Wage to determine if prevailing wage applies to the specific type of work being performed. What is the rate for an Apprentice working on a Public Works project? There is not a separate job classification for apprentices. The company and apprentice must be registered with the DLT in a bona fide indentured Apprenticeship Program. If so, the company may take a deduction from the base rate (the required fringe rate may not be reduced) of the applicable Prevailing Wage Classification. This must be done in accordance with the percentage scale of the Apprenticeship Agreement between the company and the apprentice. Non-indentured apprentices, unregistered apprentices or apprentices working out of ratio will be required to receive the FULL prevailing wage rate. Visit the Apprenticeship website for more information. Calculating Prevailing Wage rate for Indentured Apprentices: (SAMPLE ONLY OF APPRENTICE CALCULATION) USE PROPER RATES Sample Prevailing wage rate: $40.00 base Sample Prevailing wage fringe: $10.00 fringe Apprentice at 50%: Base: $20.00 ($40.00 x 50%) Fringe: +10.00 $30.00/hr The Apprentice Ratio applied to public works projects in this state shall be that ratio set and adopted by the RI Apprenticeship Council. Are contractors/subcontractors required to employ apprentices on RI state public works construction projects? Contractors and subcontractors must employ apprentices on RI State public works construction projects when the contract is valued at $1,000,000 or more. What can the worker do if they are not receiving proper pay on a RI Prevailing Wage project? Proper rate may file a complaint with the DLT - Professional Regulation Unit; Prevailing Wage Section. The complaint must be within 24 months from the completion of the project. In addition to the complaint form, evidence that the correct prevailing wage was not received must be submitted. If you would like to file a prevailing wage complaint, you may contact the Prevailing Wage Section at (401) 462-8580, option #7 to schedule an appointment. Do contractors/subcontractors need to have workers OSHA-10 certified before working on Public Works construction projects of $100,000 or more? Yes, all employees working on-site on Public Works construction projects with a total cost of $100,000 or more must have an OSHA ten-hour certification. Click here for a list of potential OSHA-10 trainers. When must an Awarding Authority require a bond on a Prevailing Wage project? Awarding Authorities must require a contractor awarded a public works contract with a price in excess of $50,000 to file a good and sufficient bond with surety furnished by any surety company authorized to do business in the state, conditioned upon the faithful performance of the contract and upon the payment for the labor performed and material furnished in connection therewith, a bond to contain the terms and conditions set forth in Chapter 12 of Title 37, and to be subject to the provisions of Chapter 12. An Awarding Authority cannot waive this requirement.