Prevailing Wage Rate Directives in the State of California
The State of California’s Department of Industrial Relations handles the research, policy, and legislative space within which all public works must operate. With regards to prevailing wage rates, bidders present numerous of queries as to the parameters within which they should carry out their business. Here are a handful of the most commonly asked questions (Q) regarding the matter and the answers (A) to them.
Q: How is the prevailing wage rate determined?
A: This is the basic wage paid per hour for a particular job in the course of a public works project and it is usually pegged to the wages paid to the majority of workers in the nearest labor market.
Q: How does it affect contract bidders?
A: It evens out the playing field among bidders because your chances of success will not be affected by wage levels. All bidders are to place their bid at the same prevailing wage rate.
Q: What constitutes a prevailing wage rate determination?
A: This refers to the rate the director enumerates on a county by county basis to cover the entire area. These determinations are released twice in every year on August 22 and February 22.
Q: What are special prevailing wage rate determinations?
A: These are determinations relating to working classes not covered in general determinations. Awarding bodies are bound to request these special determinations at least 45 days before bids are advertised.
Q: What does the issue date refer to?
A: This is the date when determinations by the director are posted (usually February 22 and August 22)
Q: What is the significance of expiration dates on determinations?
A: Once the expiry date for a determination is arrived at, it is subject to possible adjustment, but not before then.
Q: What is the significance of an asterisk (*) appending the expiration date?
A: This indicates that the determination will continue to be in effect for the duration of any projects still in progress when the expiration date is reached.
Q: What is the significance of two asterisks (**) appending the expiration date?
A: This means that should the work extend past this date, workers shall be compensated according to predetermined stipulations and any new contracts should adhere to said stipulations.
Q: What are predetermined changes?
A: These are wage changes that are stipulated in advance in the collective bargaining agreement effective at the time the bid is advertised.
Q: What does the effective date of a wage rate signify?
A: This refers to the specific date upon which the director’s determination will come into effect. This is set at 10 days after the determination’s issue date.
Q: What are residential projects?
A: These refer to wholly or partially publicly funded single-family home or up to 4-story apartments subject to prevailing wage rate stipulations.
Q: What are commercial projects?
A: These are all publicly funded non-residential projects inclusive of residential projects reaching over 4 stories.
Q: What does coverage determination refer to?
A: This refers to the process by which interested parties (bidders, employees, unions, etc.) may request official confirmation of prevailing wage rates relative to a particular project and the work to be carried out there.
Q: Under what circumstances is overtime applicable?
A: Any work undertook past 8 hours a day or 40 hours in a week is subject to one and one half the prevailing basic wage rate as stipulated in detail in the determinations.
Q: What qualifies a project as a public works project?
A: Any public works project with a cost estimate of over $1,000 falls under prevailing wage rate stipulations. Should awarding bodies choose to enforce labor compliance programs, pursuant to approval from the director, the project shall be exempt from prevailing wage rate stipulations if its projected cost is under $25,000 (construction work), or is under $15,00 (maintenance, demolition, repair, and alteration wok).
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