Federal wage determinations can be extremely complicated to read and understand. At eBacon, we’ve created a tool that helps you automate your prevailing wage projects. This guide is here to help you better understand how to read through a federal wage determination and describes some of the “gotchas” and helpful tips.
How to find the right determination
For a lot of projects, the agency that you are working with will provide you the proper wage determination. Sometimes the wage determination will also be included in the bid package that you can download. However, there are times where the wage determination is not provided and you need to research the correct wage. We always recommend that you confirm your research with your contact at the agency you are doing work with.
Where to find determinations?
As of June 2019 the US government now posts determinations on https://beta.sam.gov/search?index=wd . The new site has better research tools, but it can be a little confusing to navigate when looking for historical wage determinations.
How to search for determinations
When you first visit beta.sam.gov you will find a basic search engine that says, “Help me Find a Wage Determination.” There are three options that you can choose here:
- I do not know the number – I need DBA – DBA stands for Davis Bacon Act and will be used for any kind of construction related work.
- I do not know the number – I need SCA – SCA stands for Service Contract Act and will be used for any kind of services that are provided to the government.
- I do know the number – If you know the actual wage determination number you can type it in here.
I do not know the number
For most people visiting sam.beta.gov, you will most likely not know the number of the wage determination that you are looking for. In order to start researching, you need a few pieces of key information:
- State – Which physical state is this work taking place in?
- County – Which county is this work taking place in? Make sure that you use a tool such a Google Maps to properly identify where the work is taking place. In some situations, determinations have extremely specific geo requirements.
- Type of Work – What is the type of work being done? For a DBA, there are four options that you can read about below.
- Award Date – This is the date that you were awarded the project.
There are a few “gotchas” with beta.sam.gov that have not been ironed out by the General Services Administration (GSA).
- For anything prior to 2019, there is very limited data to search by. The GSA did not archive the revision date, county or construction type for any record prior to 2019.
- When searching on SAM for anything prior to 2019 it is more effective to look at the specific state and uncheck the box that says, “Active Only” and type the YEAR of the determination you are looking for into the keywords section.
Once you have the four pieces of data above, you can start digging a little more into SAM to see if you can find the right determination. If you are looking up a historical determination for an in progress job, you will need to do more digging into each determination. If you are looking up the determination prospectively for a potential project, you can use the search tools on SAM.
On the left side of SAM, type in the state, county and work type. This should bring up a smaller subset of search results on the right side. You can then click into each determination to see if it meets the criteria for your job.
Click on the history button when you first look at a determination. Remember, the award date is extremely important in finding the proper determination. When you click on “History” you will find a list of revisions to the current determination. You want to find the revision that falls within the award date of your project.
On the history section, you can look at the dates of revision for a determination to make sure you are within the right scope. In general, determination rates can go up or add more requirements, so you should use the newest one, if needed. However, we always recommend looking at what the variance is between the current determination and the revision that falls within your project time frame.
Wage Determination Number
Each wage determination has an identifier. These identifiers are used by agencies to make sure that you are using the correct determination. When you’re scanning through determinations you can glean some information based on these identifiers:
- State Code – The two character state code (e.g. GA is for Georgia)
- Year – The year that this determination was revised in. As a rule of thumb, most determinations are revised each year, but not all.
- 4 Digit Identifier – This is the code used to identify a wage determination. Sometimes you may see the “shorthand” of a determination (e.g. GA102 or AK4).
Davis Bacon Act wage determinations generally fall into four broad categories:
The Service Contract Act does not have different categories; there are simply classifications for a specific region. However, the actual classifications themselves can be extremely vague.
It is important to note that sometimes these definitions themselves may be modified, so it is important to read the determination closely to make sure that the type is within scope of your actual work.
Some determinations may have multiple construction types that apply to it, e.g. Heavy or Highway. Furthermore some determinations may say “Heavy,” but are specifically for dam construction or dredging projects.
Always read the definition, which is usually below the construction type header. This is extremely important when looking at things such as heavy work in some states.
Areas and Counties
Each determination is either:
- A statewide determination, in which case all counties in the state fall within the scope of the determination.
- Or specific to a list of counties or free cities inside of that state.
When reviewing a wage determination, it is important to note that even if a county is mentioned at the top of the wage determination, it does not necessarily mean that every classification in that determination will apply to it. As mentioned later in this guide each classification can be further sub-classified into specific sections and chunks of a county.
Some determinations also have explicit exclusions of regions from an area even if that region would be included within those counties. For example:
In the determination above, the counties of Coconino and Yavapai in Arizona have an exclusion area of the Navajo Indian Reservation. When figuring out your determination, it is extremely important to be familiar with the geography of your job, especially if it is a remote area. County lines can get blurry around the edges in these types of areas.
Determinations may have executive orders attached to them. An executive order might be mentioned at the top of the document or after all of the classifications. Executive orders tend to supersede any specific sections within the wage determination. For example, Executive Order 13658 established a minimum wage at $10.60 for all contractors doing federal projects. This minimum wage is a little higher than the federal minimum wage at the time of this writing. What this means is that any classification that pays below the threshold will automatically be bumped up to $10.60. As you read through a determination, knowing about these executive orders is critical, because there are classifications that have hourly rates that are below the minimum wage, but have not been properly updated to reflect it.
Each chunk of classifications is prefixed with a rate identifier and a date. The codes are usually more informational but they also can help you if you want to dig into the details of how a determination was created.
Here are some example classification codes and what they mean:
- SUAZ2011-005 –
- If you see an SU it means that no specific rate prevailed for the classifications, and therefore the published rate is figured out by computing a weighted rate based on all rates submitted during the latest wage survey.
- 2011 means that the last date of the survey was 2011.
- 005 is an internal classification tool at the Department of Labor
- If a classification does not start with a SU or UAVG, then it used the local union for the wages. IRON stands for IRON Union.
- 0075 is the union number (e.g. Iron Union Local 0075). .
- 008 is an internal Department of Labor classification.
- The classifications for UAVG mean that there was no single majority rate for these classifications. However, 100% of the data submitted to the Department of Labor was from a union.
- OH indicates the state
- 0010 is the internal number
- UAVG rates are updated once a year — usually in January to reflect the weighted average of the current negotiated / collective bargaining agreement rate of the local unions.
Area Modifiers to a Rate
One thing to be very cautious on when looking at a specific set of rates is the county modifiers. Each rate area can be divided into smaller rate areas on the same determination. Sometimes you will see determinations that say that it is “statewide” only to find that each specific classification is for a different area.
County areas are not always easy to figure out either. In the example for Herkimer County, you would need to open Google Maps and draw a line running north and south through the railroad station at Little Falls, New York. Anything that is east of this and within the county would fall under this classification and anything west would fall under another classification.
Each line indicates a separate group of classifications. A classification is the type of work that an employee performs while on the project. Each line has associated rates and fringes included with it.
Finding the right classification is half the battle of making sure you’re paying your employees correctly. Each classification can have many different modifiers, such as area or distance. Some classifications can also be confusing to read and understand exactly how it applies to your workforce.
A good rule of thumb is to try to find the classification that explicitly covers the type of work you are actually doing on the jobsite. If you cannot find something specific start moving towards something more broad.
Determinations do not have a set list of classifications on each document. Sometimes you will find that within a state there could be two separate classifications based on two determinations that the same person may work. Always read each determination separately and do not rely too heavily on the past experience of choosing a specific classification.
Lastly, some classifications such as welding inherit their classification based on the type of welding that they are doing. Welding is considered incidental to the actual classification happening. In the above determination, if someone was welding while doing roofing work, you’d use the roofing classification.
The rate is the minimum that you can pay an employee for each hour worked while on that classification. When you are filling out or reporting your hours to the government, you must ensure that you are paying your employees at least this amount.
Rates can have modifiers based on a whole slew of different conditions. If you have specific conditions based on rates, you need to make sure that you are accurately tracking the time and attendance of employees who may switch between these tasks. In the example above, if an employee is operating a 150′ crane and then moves to a 151′ crane, they will need be paid different amounts per hour.
Fringes are an area of potential over-payments for a lot of contractors. To start, the fringe amount is the amount of fringe dollars that must be paid to an employee per hour worked on that classification. If you cannot offer employees the amount of money in fringes each hour, then you must cover any differences with cash that is added to the hourly rate of the employee.
What are examples of fringes? Fringes are monies that the employer gives the employee as part of their employment. Most fringe payments must be annualized, so that these fringe dollars are not just offered during certified projects. Fringes can be things such as employer contributions to medical plans, pension plans and HSA contributions. They cannot be things that do not directly benefit the employee such as uniform deductions.
Much like rates, fringes can also be modified. In the above example there are additional fringes that must be paid — one is additional vacation based on tenure of the elevator constructor. The second is a list of holidays that must be paid out. Holidays are mentioned below. However, some classifications may have holidays that are not standard with the governments definition.
What does a percentage mean on a fringe payment? When you see a percentage, this means that you have to pay a percent of the hourly wage per hour in fringes to that employee. This really affects contractors who pay above the prevailing wage and makes sure that the amount of the fringe keeps up with the amount of pay. In the example above, a flagman is paid a base of $27 an hour, meaning that the fringe would be $25.97 per hour. If the flagman was paid $50 an hour, it would mean a required fringe of $27.53 per hour.
Classifications can have additional hourly rates based on the distances from a landmark in that state. Some areas that are remote are harder to get to and thus warrant a higher pay. When figuring out a zone, you should map your job site to the center of the location mentioned in the radius. You can use tools like Google Maps to map “as the crow flies” from one zone to another zone.
Classifications may reference groups instead of a specific descriptive classification. Groups are generally large lists of what kind of work or action constitutes that pay. You will see these a lot in trades such as laborer or power equipment operator. When classifying employees, you need to have your employees explicitly mention what kind of equipment they are working on for time tracking purposes, especially if you do not have dedicated employees working on a specific piece of equipment. Past Department of Labor audits have shown that auditors typically make sure that each action of work is paid in line with the actual classification on the document.
Even if the determination does not explicitly mention holidays, you still need to pay for all federal holidays. Some states have more specific holiday requirements, such as Nevada for State Day. Always check in the classification for holidays that may need to be paid while on the project.
How to properly classify work in your time and attendance system
The best way to guarantee that you are paying the right wages is by having a robust time and attendance platform that can properly assign the task that an employee does to the actual classification on the wage determination. Most contractors do not work 100% of their jobs on certified payroll projects and because of this, they need to make sure that when they do, they can back into the classification based on the task and type of work performed. Within your time and attendance system, make sure that you can accurately map a determination directly to your task or job codes. Train employees to clearly document when they switch from one piece of equipment or from one task to another in a reliable tracking application.
Within eBacon, most of this is already taken care of for you as we’ve built our system from the ground up to make sure employees can quickly change tasks and that tasks can seamlessly map back to classifications.
If you have any specific questions about how to read a determination, please contact us and we will respond to you and then update this page for others.
The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.