Remember that apartment complex in Minneapolis? The one where the painting contractor got caught underpaying workers by $35,000? Yikes! That wasn’t just a bad day for the company, it was a violation of Minnesota’s prevailing wage law. And with stricter enforcement on the horizon across the country, it’s more important than ever for contractors to stay compliant.
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What is the Prevailing Wage?
Prevailing wage laws ensure fair pay for construction workers on government-funded projects. These laws set minimum hourly rates and fringe benefits based on the local area and type of work. So, whether you’re building a school, fixing a bridge, or painting an apartment complex with TIF funding (like in our example), you need to follow the rules.
How can you avoid prevailing wage trouble?
Let’s face it, navigating wage laws can be confusing. But fear not! Here are some actionable tips to keep your projects on track:
1. Know the Rules:
- Stay updated: Check your state’s Department of Labor (DOL) website regularly for changes in prevailing wage laws.
- Read carefully: Don’t skim the wage determination document! It outlines the specific rates and classifications for your project.
- Ask questions: If something’s unclear, contact your local DOL for clarification. They’re there to help!
2. Track Time Accurately:
- Ditch the paper: Invest in a digital timekeeping system (like eBacon offers) to avoid manual errors and ensure all hours are captured.
- Classify correctly: When workers switch tasks, make sure they’re clocked into the right wage classification.
- Double-check: Regularly review timesheets to verify accuracy and address any discrepancies promptly.
3. Master Certified Payroll:
- Get certified: Train your staff on certified payroll procedures to ensure accurate reporting and avoid costly mistakes.
- Use resources: Utilize the resources provided by your state DOL and industry associations to stay compliant.
- Stay informed: Keep up with the latest developments in certified payroll requirements.
4. Embrace Education and Process Improvement:
- Train your team: Regularly educate your employees about prevailing wage laws and their responsibilities.
- Invest in knowledge: Attend industry workshops and seminars to stay informed about best practices.
- Promote awareness: Make compliance a part of your company culture.
Currently there is a push for the increased enforcement of labor laws across the country. More labor laws are also being signed into law, including wage theft and prevailing wage laws. Making mistakes, even if a law is new or unclear, carries the same risk as ignoring the law. The first way to reduce your risk is to stay on top of what is happening in your state and city. Use your local Department of Labor (DOL) as a resource and if you’re unsure about anything, contact them.
Remember: Mistakes happen, but ignorance is no excuse. By following these tips and staying proactive, you can minimize the risk of violating prevailing wage laws and protect your business from costly penalties and legal trouble.
Bonus Resources:
✔️ Minnesota Prevailing Wage FAQ
✔️ Certified Payroll FAQ
✔️ Certified Payroll resource list
✔️ Compliance tips for government contractors
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.
