Published date: 05/16/2024

Question

If a mechanic is paid a regular rate above the basic hourly rated listed in the applicable wage determination, can the additional wage amount be considered as a cash payment if the fringe benefit is not enough to cover the prevailing wage?

Answer: The short answer to this question is yes, if certain assumptions are made. To better explain it, I am making some assumptions based on missing information in the question. Here are some examples of how the total package (i.e., wage + fringe) can work:

In example A, we are assuming that the fringe benefit is being paid in cash. The contractor pays more in hourly wage than the wage determination requires, therefore they only need to pay the delta of $3.00 per hour to meet the total package requirement of $25.00 per hour.

In example B, we are assuming that the fringe benefit paid is via a health insurance program that is the Cadillac of insurance, therefore it has a high hourly value. The contractor pays less in the hourly wage than the wage determination requires, as the fringe benefit provided is valued higher than the wage determination requires. While it is acceptable to pay less than the prevailing wage rate in this instance, overtime must still be paid at the $20.00 per hour requirement.

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Question

Can prevailing wages apply to special inspectors (like concrete, steel welding, masonry or fireproofing inspectors)?

Answer: The answer to this question is fact-specific, meaning the answer could be different based on the location of the project and the type of prevailing wage program that is applicable. When talking about Davis-Bacon, inspectors are typically not covered work (Field Operations Handbook Chapter 15 15e14); however, there are unions that claim this type of work. The International Brotherhood of Electrical Workers (IBEW), for example, claims a type of inspector.

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Question

Can security guards be considered a lower tier subcontractor?

Answer: Security guards are typically only paid prevailing wage under federal Service Contract Act (SCA) contracts, or Article 9 for building services in New York. In those instances, though, yes, they could be considered a lower-tier subcontractor – so long as the thresholds for the applicable legislation are met. For the SCA, prevailing wage for security guards applies to prime contracts over $2,500.

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These materials are being issued with the understanding that LCPtracker is not engaged in rendering legal or other professional services and is providing these for informational purposes only. If legal, accounting, or tax expert assistance is required, the services of a competent legal, accounting or tax professional should be sought.