Let’s say you’re working at a job that you were happy to take, and you are making well above the minimum wage. You’re paid on time, the checks clear, so no problem, right? In fact, employers have a specific set of legal obligations to pay workers fairly that go far beyond the minimum wage requirements. These obligations are the “prevailing wage” rules; failure to pay the prevailing wage is wage theft.
The prevailing wage rules apply to many different types of projects and jobs at those projects. What the rules do is essentially create a special, and much higher, minimum wage for certain workers on government-related projects. Employers are required to know what the local wages are for similar work and to pay it; failure to do so can have serious consequences.
Here are some examples of recent prevailing wage settlements and judgements.
- A general contractor failed to check his subcontractor’s false payroll information before certifying and submitting it – $750,000 judgement.
- An employer maintained false payroll records over a six-month period and failed to pay prevailing wages to 103 workers – $1.1 million settlement.
- An employer incorrectly classified two employees as laborers instead of elevator mechanics – $115,000 settlement.
- Asbestos abatement company intentionally failed to pay the prevailing wage and overtime, failed to maintain an earned sick time policy, and repeated payroll records violations – $564,000 citation from Massachusetts.
- Unpaid overtime, skipped rest breaks, illegal charges to workers for housing, and failure to pay prevailing wage often go together.
Prevailing wage requirements are usually associated with government construction projects, but they can apply to a surprising number of jobs and industries.
- Direct federal or state-funded projects, e.g., a public building, road or bridge.
- Projects receiving state or local incentives and/or tax relief, such as new industrial sites or sports arenas.
- Municipal bond financed projects, which can include industrial, residential and other projects that do not appear to be “government” projects on the surface.
- New York City Mayor Bill de Blasio signed a bill last year that expands prevailing wage coverage to building service workers.
- Projects receiving federal or state grants, often at colleges and universities, even those using volunteer labor.
The US Department of Labor enforces the prevailing wage laws. According to the US Department of Labor, 26 states have their own prevailing wage laws that apply to state-funded projects. In addition, some cities, such as New York, have their own rules. The prevailing wage laws are not simple for workers or employers. For example:
- Pay for particular trades, classifications or types of work within the locality and the nearest labor market must be calculated correctly, often mirroring union rates.
- Fringe benefits must be paid on top of wages; amounts vary based on the prevailing wage rate being paid and calculation can be a challenge.
- A single employee may have multiple prevailing wage and fringe benefit rates in a single day.
- Accurate timekeeping, timely payment of correct wages and benefits, proper payment of overtime, and the submission of accurate certified payroll are all required.
In some states, employers must provide employees with information such as the components of their compensation, overtime eligibility status, timing of wage payments, potential for deductions from pay, and company contact information.
In other states, it is up to the employee and their representatives to enforce the laws and prevent wage theft. When non-compliance is found, many employers cooperate and pay back wages and benefits and fix the problems going forward. Others, do not. They defend complaints often trying to use the confusing prevailing wage laws to their favor. In addition, workers who are seen as blowing the whistle by simply seeking their legal rights often suffer illegal retaliation.
We’re Here to Help
If you believe you should have been paid prevailing wages, or if you are required to “kickback” or return a portion of your wages to your employer, contact a prevailing wage attorney to discuss your potential claim and determine how to gather information regarding the important facts of your situation.