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Deborah Wilder
CCMI President 

The Allocation of Wages and Fringe Benefits:
The allocation of prevailing wages between wages and fringes can be confusing for contractors.  Typically, prevailing wages are designated as a wage rate (referred to as a base wage rate in some jurisdictions) and then a fringe benefit component. Under Davis Bacon and in many states, the fringe benefit amount is set forth in one lump sum. In other States it is set forth in a variety of benefit categories such as Health and Welfare, Pension, Vacation/Holiday, etc.   
The important thing to remember is that:
Wages + Fringes= the Total prevailing wage package
This total amount must be paid to the worker or a combination of wages and benefits to the worker or for the worker's benefit. Some states (California and Maryland) designate training contributions as a fringe benefit which cannot be paid to the worker, but must be paid to a third-party training committee or to the State.
Sometimes a contractor may have a fringe benefit obligation which is higher than the amount specified in the prevailing wage determination.  Contractors want to know if they can reduce the amount of the base wage rate in order to pay more in fringe benefits. The answer is, "it depends" on the funding source, the state and special circumstances.
For projects subject to Davis Bacon enforcement. A contractor may reduce the base wage rate and shift some of that amount over to pay a higher bona fide fringe benefit so long as the base wage rate is not reduced below the worker's regular rate of pay or below the federal minimum wage rate.
In California, the base wage rate may NOT be reduced to pay higher fringe benefit amounts EXCEPT when the worker is covered by a collective bargaining agreement which requires a higher fringe benefit amount be paid.  
Wages: $35
 H&W: $5.00 
Pension: $4 
 Vac/Hol: $2
Training: $1
   Other: $2 
Total $49.00 
A union signatory contractor whose collective bargaining agreement requires $6.50 to H&W would be allowed to pay as follows:
Wages: $33.50  
H&W: $6.50 
Pension: $4   
Vac/Hol: $2   
Training: $1   
  Other: $2  
Total: $49.00 
A non-union or open shop contractor is not allowed this exception and must pay not less than the base wage rate to the worker even if the company benefit package is more than the fringe amount set forth in the wage determination.
In Maryland, the base wage rate can be reduced up to a maximum of 20% in order to pay for a higher fringe benefit package.  
Wages: $35    Fringe Benefits: $15    Total Package: $50
The maximum amount which can be distributed to fringe benefits is $7 or 20% of the $35 base wage rate.
Wages: $28    Fringe Benefits: $22    Total Package: $50
Each of the 28 states having its own prevailing wage laws may have their own specific rule.
Congratulations to Eric Rood as the new Chief of the of the Division of Apprenticeship Standards (DAS). After 20+ years on the enforcement side of California's Department of Industrial Relations, he will now be overseeing the DAS. Susan Nakagama (another DIR veteran) is being promoted to fill Eric's position within the DIR. Congratulations Susan!

LCPtracker's Annual User's Conference is set for May 29- June 1, 2018 in Huntington Beach, CA. CCMI 's president, Deborah Wilder, will be one of the presenters again.

UPCOMING EVENTS - Training and Seminars 


November 2, 2017   
Sacramento, CA  
What Every Contractor Should Know about Prevailing Wages 9 a.m. - 4 p.m.  Contact   www.abcnorcal.org to sign up.
January 25, 2018 San Diego, CA  
What Every Contractor Should Know about Prevailing Wages 9 a.m. - 4 p.m.  contact ABC San Diego www.abcsd.org  

You asked, we answered!

How to I determine the correct holidays on a prevailing wage project?

Historically, holidays and holiday pay have not been designated in Davis Bacon wage determinations; but, during the last few years, holidays are being included in the wage determination. If holidays are designated, these will be listed at the end of the particular wage classification. Be aware, that different trade classifications will have different holidays. In most instances no pay is required if work is not performed on the holiday. However, some classifications in some parts of the country require the holiday be paid if a worker performed work within the same workweek as the holiday (even if no work was performed on the holiday). Be sure to read the wage determination carefully.
Many states designate a set number of days as holidays for all trades. Again, no payment for the holiday is required unless work is performed that day. Other States, like California, designate holidays by craft. Every craft recognizes Christmas, New Years, Memorial Day, July 4th Labor Day and Thanksgiving, but other holidays are based on the particular trade, and can include Columbus Day, California Admission Day, President's Day, the Friday before Labor Day, etc.  Generally, no pay is required if no work is performed on the holiday. In California, most holidays mandate double time be paid; however, some trades only require time and one half pay for certain designated days.     

CCMI is not just another firm....

We are not merely a "consulting" firm, but rather a team of individuals who understand the needs of the Public Entity and contractors to "get the project done." Our staff includes retired contractors, auditors, attorneys and industry veterans.