The Roadway Excavation Quality Assurance Act

On August 16, 2023, New York Governor Hochul introduced the Roadway Excavation Quality Assurance Act, which then took effect on September 15, 2023. This act significantly impacts workers in the construction and utility industry, changing Labor Law §220 and adding a new section, Labor Law §224f. It specifically targets situations where private utility companies hire contractors or subcontractors to perform work that involves excavation or opening of public streets. The Roadway Excavation Quality Assurance Act aims to guarantee that workers engaged in these projects receive prevailing wages. This act can affect your projects in several different ways, including:

  1. Under the new law, contractors who obtain permits for street-related utility work are now obligated to pay the prevailing wage to all workers involved in the project. This applies to tasks such as opening or closing roads, sidewalks, curb cuts, and more.
  2. The legislation also establishes more stringent record-keeping requirements. Contractors and subcontractors working for utilities are now mandated to maintain records of prevailing wage payments at all times, regardless of whether local laws or ordinances necessitate it.
  3. All permits issued after the effective date of the law must include a copy of the Roadway Quality Assurance Act. This ensures that contractors and workers are aware of the prevailing wage requirement.
  4. Government entities granting permits for covered excavation projects are subject to specific requirements. Permits cannot be issued until there is a contractual agreement in place confirming the payment of prevailing wages. This agreement must also be filed with the relevant department of jurisdiction.
  5. Contractors and subcontractors in the utility sector must submit certified payrolls to the department of jurisdiction in accordance with Article 8 of the New York State Labor Law.

In conclusion, The Roadway Quality Assurance Act seeks to ensure fair compensation for workers engaged in excavation and construction projects on public streets. By mandating prevailing wages and outlining clear provisions, the Act promotes fair and competitive wages for those in the construction and utility industry.  


Inflation Reduction Act Guidance

On August 29th, 2023, the IRS and the Treasury issued “proposed rules” which would update the PWA (prevailing wage and apprenticeship) requirements under the Inflation Reduction Act. The document provides clarification on many issues that arose after the original guidance was published in November of 2022. Some of the highlights include: 

  • A denial of a request for a qualified apprentice would not automatically qualify the taxpayer for the Good Faith Effort Exception. There would be a requirement to resubmit a request for apprentices every 120 days, in the event of a valid denial by the apprenticeship program. 
  • A new general wage determination is required to be used when a contract is changed to include additional, substantial construction, alteration, or repair work not within the scope of work of the original contract, or to require work to be performed for an additional time period not originally obligated. 
  • Apprentices not in a Registered Apprenticeship Program, or not supervised at the correct ratio, must be paid at the full prevailing wage rate for the classification and cannot have those hours counted towards the Apprentice Labor Hour Requirement. 

Many major topics are addressed, including cure and penalty provisions for failure to meet the requirements. Any taxpayer wishing to claim the increased tax credits should ensure that they are familiar with these proposed regulations. Alliant is here to help answer any questions, help clients stay informed, and to ensure full compliance with all of the IRA PWA requirements. 


Prevailing Wage in Ohio

In the heart of the Buckeye State, Chapter 4115 of the Ohio Revised code sets the prevailing wage for the state of Ohio. The Ohio Department of Commerce enforces provisions that set the minimum wage and hour requirements for laborers and mechanics working on public works projects in Ohio. These statutes apply to all partially and fully publicly funded projects over the following threshold values:

  • New Building Construction: $250,000.00
  • Building Construction (reconstruction, repair, renovation, etc.): $75,000.00
  • New road or bridge construction: $96,901.00
  • Road or Bridge construction (reconstruction, repair, renovation, etc.): $28,789.00

These thresholds are adjusted every two years and cannot decrease or increase by more than 3% at a time. The law aims to ensure that workers are paid fairly for their work on public projects and to prevent contractors from underbidding one another by paying their workers less than the prevailing wage. It is important to note that Ohio state is committed to protecting the rights of workers shown through Ohio revised Code Section 4115.071, which stipulates that the public authority contracting for a public works project must appoint one of their employees as a “prevailing wage coordinator” for the life of the project to protect the rights of workers and ensuring that they are compensated fairly for their work on public projects.


Fringe Benefits Overview

Fringe Benefits are an important factor of prevailing wage and can include a variety of benefits in addition to normal wages. According to the IRS, they are considered a form of compensation for services rendered. These benefits can include health or pension plans, among others. In the context of prevailing wage, fringe benefits are significant for two reasons:

  1. What counts as a Fringe Benefit: It is essential to determine what can be categorized as a fringe benefit. The amount must be paid to a 3rd party on behalf of and to benefit the employee. Examples of bona fide fringe benefit plans include health or pension plans.
  2. Factoring into Prevailing Wage: Fringe benefit payments may be taken into account when calculating prevailing wage rates for employees. Employers need to calculate the hourly cost of providing these benefits to the employees. This amount can be added to regular wages when determining the total compensation offered to employees to meet the prevailing wage requirements.

On August 23, 2023, the Department published in the Federal Register the final rule, “Updating the Davis-Bacon and Related Acts Regulations.”  The final rule updates regulations issued under the Davis-Bacon and Related Acts. The final rule is effective on October 23, 2023.

The final rule adds new paragraph (c) to § 5.25 to codify the principle of annualization that is used to calculate the amount of Davis-Bacon credit that a contractor may receive for contributions to a bona fide fringe benefit plan (or the reasonably anticipated costs of an unfunded benefit plan) when the contractor’s workers work on both DBRA-covered and private (non-DBRA) work. Contractors, plans, and other interested parties may request an exception from the annualization requirement by submitting a request to WHD, but such exceptions may be granted only if the benefit provided by the plan is not continuous in nature and does not compensate both DBRA-covered and non-DBRA work.

Generally, Fringe Benefits encompass employer contributions relayed to employees, firmly entrusted to a trustee or an external party as part of a genuine fringe benefit fund plan or program. This plan should be reasonably anticipated and represent a binding financial commitment for the employees’ benefit. It’s important to note that employer contributions mandated by federal, state, or local regulations do not fall under the category of fringe benefits.

Fringe benefits can be confusing, but taking these factors into account will help you remain compliant and avoid penalties! 


Prevailing Wage in Hawaii

Surf, sand, and prevailing wage in the Land of Aloha!? Chapter 104 of the Hawaii Revised Statutes (HRS) established and details Prevailing Wage mandates in Hawaii. The code sets the minimum wage and hour requirements for laborers and mechanics working on public works projects in Hawaii. It requires contractors and subcontractors to pay their workers no less than the prevailing wage rate for similar work in the same locality. The law aims to ensure that workers are paid fairly for their work on public projects and to prevent contractors from underbidding one another by paying their workers less than the prevailing wage. It is important to note that Chapter 104 applies to all public works projects over $2,000 involving a Governmental Contracting Agency, regardless of funding source. By enforcing this law, Hawaii is committed to protecting the rights of workers and ensuring that they are compensated fairly for their work on public projects.


Temporary Staffing Agencies in California

A short look back to the mid 1900’s shows a shift in companies’ search for temporary labor. A temporary staffing agency or most popularly known as a temp agency is a recruiting firm that acts as an intermediary between candidates looking for work and companies needing short-term employees or indefinite temporary positions. Temp agency employees work for what is referred to as a “host employer” (or an employer who has general supervisory authority over the worksite) but are on the payroll of a “primary employer.” The primary employer can be either: A temp agency that hires workers and sends them to work for a host employer, or a professional employer organization (PEO) that puts a host employer’s employees on the PEO’s payroll as its own employees.

When it comes to prevailing wage, project registration requirements mandate that temporary staffing agencies must register with the DIR if the temp agency submits their own payroll as the primary employer (See CCR Title 8, § 16410). However, if the hiring contractor can submit payroll for the temp employee, the temp agency need not be DIR registered. Additionally, as referenced on the DIR’s FAQ website, “Apprenticeship requirements are the responsibility of the contractor. If a Contractor relies on the temp agency and there are problems, it is the Contractor who will be responsible for any resulting penalties.” Some of these issues can include but are not limited to not employing apprentices if it is an apprenticeable craft, late and/or DAS 140 forms not being sent for apprenticeable crafts, and/or failure to make training payments for all hours worked. Although, temp agency employees can be beneficial when it comes to saving time on training and hiring. Employers must be aware and do their due diligence to ensure they are meeting the prevailing wage requirements when they are choosing to work with temp agencies to avoid costly penalties on California State Funded Public Works project.

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