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Prevailing wages level playing field for public projects

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The Missouri Department of Labor on June 3 announced the latest schedule of prevailing wages – or the minimum hourly amount that must be paid – for workers on construction projects such as bridges, roads schools or other buildings that are partially or wholly funded by government money.

Executives with two local construction companies say prevailing wage law simplifies the bidding process for public works jobs, but can complicate payroll management.

The new prevailing wage for a carpenter in Greene County is $23.83 per hour plus fringe benefits of $11.90 per hour, setting a baseline for all contractors to use as they bid for public jobs.

“Everybody who bids the work is on the same playing field,” R.E. Smith Construction President Dick Smith said. “Everybody pays the same.”

The wage order lists hourly rates for 26 occupational job titles, plus subgroups, and overtime, holiday pay and fringe benefits.

Smith said confusion about job classification is a frequent problem.

“If a guy’s running a backhoe, he’s an operator. But he may get a different rate if he’s driving a forklift, or if he’s driving a skid steer, or if he’s running a cherry picker or a crane,” he added. “Each one gets paid a different wage rate. Sometimes we have subcontractors who get confused and pay the wrong wage rate, and we have to check those to make sure they pay the right one.”

According to the wage order, pay rates for operating engineers – divided into five categories – range from $14.41 an hour to $24.03 an hour.

Randy Ganz, president of DeWitt & Associates Inc., reiterated that it’s up to contractors to make sure subcontractors are paying workers accurately and filing necessary documentation with the state.

The Labor Department has investigators who visit job sites and check payroll records for compliance with the prevailing wage law, but enforcement is mostly based on complaints from employees or competing contractors, said DOL Communications Director Amy Susan. Complaints can be filed at www.labor.mo.gov.

“If we do find a violation, we notify the employer, and oftentimes that would remedy the situation,” she said. If not, the Labor Department can assign a penalty, which, again, is often sufficient incentive for an employer to pay the wages due. The agency often will waive the penalty if the employer complies, she said.

Susan said the DOL does not have wage collection authority, and workers must take action to collect, though they can use the department’s research and findings to support their cases.

In June, when Beaman Electric Inc. closed its doors, it still owed employees nearly $83,000 due to prevailing wage violations from a 2009 construction job at Missouri State University. The complaint in that case was filed by International Brotherhood of Electrical Workers representative James Appleby. At the time, Susan said the company’s closure may lessen the chances that the former Beaman employees would receive their money, but then – and now – she stands by DOL’s track record of helping workers as they try to collect what they’re owed.

According to DOL data, through June, the state DOL had received 79 complaints and found 64 violations, with more than $524,000 in wages owed and more than $426,000 in restitution paid.

Smith said he uses the annual wage-order adjustments as a benchmark for all wages at R.E. Smith Construction, which does both public and private projects. Because projects that don’t use public money don’t fall under prevailing wage rates, Smith said his company has prevailing and nonprevailing-wage scales that differ greatly.

To avoid a widening disparity between the two scales, Smith said he adjusts his nonprevailing rates annually to keep prevailing wages no more than 50 percent higher than wages paid on projects that aren’t funded by public money.

Ganz said he does not face this disparity because he employs mostly union workers earning at or near prevailing levels.

Smith’s practice of minimizing disparity between prevailing wage projects and other work may be an anomaly. Neither he nor Ganz are aware of other contractors who use prevailing wages as a benchmark for projects that aren’t funded by public money. Rich Kramer, president of both Rich Kramer Construction and Springfield Contractors Association, also said he isn’t familiar with the practice.

Smith’s reasoning, however, is simple.

“I’m just doing it out of fairness to my people,” he said.[[In-content Ad]]

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