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Government stimulus projects include prevailing wage requirements

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{from an Associated Press article}

A note from Sunburst Software Solutions, Inc. – Prevailing Wage requirements also require the submission of “certified payroll reports” on a weekly basis.

Gov’t stimulus projects include wage requirements

By SCOTT BAUER – 23 hours ago

MADISON, Wis. (AP) – Welders, bricklayers and other construction workers under the U.S. government’s $787 billion stimulus law would earn significantly higher wages in some areas than crews on private, non-stimulus projects.

Wage rules in the law are a potential bonus to workers’ wallets but they’re upsetting contractors who say it will increase their costs and reduce the numbers of projects that can be funded.

Tucked within the 407-page law is a requirement that laborers and mechanics employed on government stimulus projects be paid “prevailing wages,” which is defined as the salary and fringe benefits for corresponding work on similar projects in the area. The prevailing wage is usually on par with union wages and higher than the average wages for the same category of employees in the same county.

For bricklayers in Madison, for example, the “prevailing wage” is $30.61 per hour but the average bricklayer there earns $25.77 per hour, according to the U.S. Labor Department. Working 40 hours per week over one year, a bricklayer under the prevailing wage would earn $10,000 more. The prevailing wage for cement workers is $29.78 per hour in Madison, compared to the average cement worker wages there of just $20.80 per hour – an annual difference of $18,678.

Major U.S. government construction projects have required contractors to pay prevailing wages since 1931, but the Labor Department has acknowledged that the stimulus law will apply the same wage standard to certain projects that previously weren’t covered. It plans to release new instructions but hasn’t said when that might happen.

“The point of the stimulus was to turn our economy around by creating jobs,” said Jacob Hay, a spokesman for the Laborers International Union of North America, the construction workers union. “That will only happen if the jobs created are good jobs with fair wages that spread paychecks throughout local communities.”

Labor groups – which have overwhelmingly supported President Barack Obama and Democrats in Congress who voted for the stimulus law – are pleased. But contractors and home builders said they were worried about rising costs on stimulus projects, including plans to improve the energy efficiency of homes owned by low-income people.

“It’s not clear the full extent to which it will be applied into areas in which it (the prevailing wage) has never been utilized,” said Josh Ulman, a consultant for Associated Builders and Contractors, a trade group.

Another trade group, the National Association of Homebuilders, said it will jack up costs, reducing the number of homes that will benefit from $5 billion in weatherization upgrades. Only a small number of its 200,000 residential homebuilders pay the prevailing wage, spokeswoman Jenna Hamilton said. Most homebuilders aren’t unionized and have never dealt with the prevailing wage requirements, she said.

“It’s hard to tell right now how it’s all going to work,” she said.

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