Published date: 12/06/2021
The topic of wage determinations frequently pops up in many discussions surrounding previling wage compliance. If you’ve read our previous posts, you’ve likely noticed how often it gets mentioned here. And that’s because it’s a fundamental aspect of prevailing wage that cannot be overlooked. So let’s dive into the basics as well as cover one of the more nuanced issues that eventually and inevitably arise: conformances.
First thing’s first. What is a wage determination?
A wage determination is a list of basic hourly rates and any fringe benefits associated with each classification of workers in a predetermined geographic area. It should be provided by the awarding body and included in the prime contract for a project. The prime contractor should then include these as flow down provisions with their subcontractors.
Different pay for different work
One of the main keys here when looking at a determination is understanding the classification. It is crucial to make sure a worker is correctly classified based on the work he or she is performing. All too often, contractors lump a bunch of workers performing different types of work into one broader category. However, crafts are frequently broken down into multiple classifications because an individual’s scope of work can vary so much even within a category. For example, the United States Department of Labor (USDOL) could make a distinction between a “tile setter” and “tile finisher,” and these two classifications could be paid different rates.
The rates listed on the determination are normally based on the surveys carried out on local wages by the Wage and Hour Division (WHD) of the USDOL. This is where the geographic area part of the definition above comes into play. Where the project is located (and consequently where the work is performed) also has an effect on the rate. In addition, you should note that rates are typically updated periodically. Although you may have used a specific rate on one project, it does not mean the classification will be paid the same on a future project.
But what happens when the wage determination provided by the awarding body does not include a classification that is assigned to your project?
A conformance request is the process by which a contractor can request that a classification and corresponding wage and fringe rate be added to the determination for the project. That, of course, first requires that the contractor recognizes there is classification omitted. It is therefore very important to compare the labor classifications listed on the wage determination with the actual work that is expected to be performed on the project to make sure everything is included.
When there is work necessary for a project that doesn’t seemed to adequately fit into any of the classifications listed on the wage determination, it is important to follow through with a conformance request instead of finding your own work-around. Simply making up your own classification or using a classification that most closely resembles what you’re looking for will not suffice as acceptable solutions. Doing so can potentially result in violations further down the line.
How do you submit a conformance request?
The General Services Administration provides form SF-1444 as a vehicle to submit conformance requests. It can be downloaded at www.sam.gov. Be prepared to provide details about your proposed missing classification. You’ll need to include the proposed classification titles, wage rates, and fringe rates. You can submit multiple classifications on a form if there is more than one that is missing.
To whom do you submit the request?
If you are the subcontractor, you can submit the SF-1444 form to the prime contractor, and then they can request it from the awarding body. If you are the prime contractor, you can submit the request directly to the awarding body.
Things to keep in mind
Now here’s the thing… Once the awarding body checks the request for completeness, they typically pass it on the USDOL. Understanding this chain of correspondence is pertinent here because it means that you might need to do your due diligence in ensuring the issue is resolved. Your request may or may not be approved, and it is your responsibility to follow up on this if you don’t hear back. No response from the USDOL does not mean that the request was approved.
Best practices dictate that you keep track of your requests and check up on it every 30 days. To increase your chances of having your request approved, it is typically recommended that your proposed rate(s):
- Fall within the range of other skilled craft wages
- Fall within the range of union sector of wage rates
- Are higher than the general labor rates
If you’d like to learn more about wage determinations, the conformance process, and other components of prevailing wage compliance, check out: https://lcptracker.com/academy/.
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.