How to: setup prevailing wage for payroll

Tags: Payroll, Process, Project, Subcontractors

💡 Prevailing wage is the minimum hourly wage, including benefits, that must be paid to workers on public works projects.

Overview

Prevailing wage is the minimum hourly wage, including benefits, that must be paid to workers on public works projects. The concept ensures that workers are paid fairly according to local standards, which helps prevent underbidding by contractors who might otherwise pay their employees less than market rates.

• Federal Level:
  • Under the Davis-Bacon Act, prevailing wages must be paid on all federally funded or assisted construction projects valued at over $2,000. The U.S. Department of Labor determines the prevailing wage rates for different regions and types of work.
• State and Local Levels:
  • Many states have their own prevailing wage laws, often referred to as "Little Davis-Bacon Acts," which apply to state-funded projects. Some cities or municipalities may also have their own prevailing wage requirements.

When is it applied?

Prevailing wage laws apply to government-funded construction projects such as:

• Building and repairing highways, bridges, and roads
• Public school construction
• Government buildings or military facilities
• Other public infrastructure projects funded by federal, state, or local government.

Why is it important?

prevailing wage serves several important purposes:

• Fair Labor Standards: It ensures that workers on public projects are paid wages consistent with the local standards, preventing wage exploitation or unfair labor practices.
• Prevention of Low-Wage Bidding: By setting a wage floor, prevailing wage laws prevent contractors from winning bids on public projects by undercutting competition through low worker pay, thereby promoting fair competition.
• Skilled Workforce: It encourages the use of skilled labor since workers are compensated fairly according to local rates, which can result in higher quality work and safer job sites.
• Economic Impact: Prevailing wage laws help maintain local wage standards and can support the local economy by ensuring workers earn a living wage and have access to benefits.

Process

Setting up prevailing wage

1. Select the Projects option in the left-side navigation bar.
2. In the Projects page, select the project you would like to set up prevailing wage for.

1. In the project view screen, select the edit 🖊️ button next to the worker you would like to update.

1. In the “Update project pay rate” modal, add the person’s rate for the project.
2. When you’re done updating, click the Update rate button.

1. All set! you’ve applied prevailing wage for the person in the project.

👉 Note: if you don’t see the person listed in the project, then click the Edit button in the view projects page to add workers to the project. Make sure to click the Save button before closing the “Edit Project” modal.

Applying prevailing wage to payroll

1. When running payroll in the “Edit payroll” screen, select the + button in the worker’s table for the week you would like to attribute prevailing wage.

1. You’ll see a drop-down that lists: double-overtime, PTO, Holiday, and then all the projects where the worker has been assigned a prevailing wage.
2. Select the relevant project and add all the hours for that project in the new row. Be sure to assign the project in the cell where you’re entering the shift hours as well.