Table of Contents
- Introduction
- When is Prevailing Wage Applicable?
- What are the Key Factors of Prevailing Wage Compliance?
Introduction
When natural disasters strike, construction becomes a crucial part of the recovery process. The work done by construction companies is vital for clearing debris, repairing infrastructure, rebuilding homes, and bringing back the essence of community. With the recent tragedy of the LA County wildfires, the rush to contain the fire and ensure the safety of the affected communities has been paramount. As contractors are brought in to aid in repairing affected areas, it’s beneficial to remember the applicable prevailing wage laws, especially when construction is funded by federal, state, or local government.
The Department of Labor (DOL) has previously urged recovery employers to avoid wage violations in light of the severe weather and the calamities of 2024. The department has offered a Natural Disaster Compliance Assistance Toolkit, providing workers and employers with resources for disaster recovery work. Among these resources is the requirement to adhere to prevailing wage laws as a part of employer responsibilities.
California State Prevailing Wage Laws and the Davis-Bacon Act Federal Prevailing Wage Laws are the most prevalent types of regulation applicable to California wildfire recovery. California has received federal assistance to boost the containment of the wildfires, and further government assistance with recovery at a local level may be anticipated. It’s important to remain informed about these laws and how government funding may come into effect with construction efforts to rebuild communities.
When is Prevailing Wage Applicable?
In California, prevailing wage takes effect on Public Works projects, which includes the Construction, alteration, demolition, installation, or repair work done under contract and paid in whole or in part out of public funds (Labor Code 1720).
Under the Davis-Bacon Act, the federal prevailing wage laws apply to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works.
What are the Key Factors of Prevailing Wage Compliance?
Requirements differ between the California and Davis-Bacon Act prevailing wage laws, but there are a few general best practices to keep in mind as you walk through your compliance journey. Some of these include:
- Paying Prevailing Wages
- Wage Determinations are lists of classifications/trades/job titles that include their rates and benefits owed. These prevailing wages may include footnotes that change the rate a classification is owed, like overtime, travel and subsistence, etc.
- Properly Classifying Employees
- With the nature of construction work, employees may be performing a variety of tasks. Each classification has a unique scope of work, including set of equipment being handled and materials being used. If an employee performs the scope of work for more than one classification, they would be owed the rates for all types of work performed. It’s best practice to keep accurate records of work being performed and paying the correct classification to avoid potential underpayments.
- Maintain Accurate, Detailed Recordkeeping
- All payment records that assist in painting the full picture of employees’ pay are key to proving the prevailing wages are being paid. Some of these documents may include, but are not limited to, time sheets, certified payroll reports, pay stubs/itemized wage statements, payroll deduction authorization forms, benefit summaries, etc.
Prevailing wage doesn’t stop there – there’s a wide variety of expectations for documentation maintenance, required forms/certification, payment processes, and more. For additional insight on California and Davis-Bacon Act prevailing wage, you can visit our YouTube channel for detailed overviews and step-by-step tutorials on document completion and prevailing wage compliance.
With prevailing wage compliance, contractors not only adhere to legal requirements but also support fair labor practices and contribute to the overall wellbeing of the workforce involved in disaster recovery efforts. In times of crisis, communities come together to rebuild and heal. As contractors play a pivotal role in these efforts, it’s essential to approach the work with sensitivity and empathy. The impact of the wildfires on people’s lives is profound, and ensuring fair labor practices can contribute to the broader recovery process.