United States
Hong KongPublic works and prevailing wage
Publicly funded construction typically requires paying prevailing wage rates set by a wage determination and submitting certified payroll records. Both are contract requirements with real administrative cost.
A different market with different rules, and contractors who bid it like private work lose money on the paperwork.
Prevailing wage
Publicly funded projects commonly require workers to be paid at least a rate set for their classification and locality by a wage determination attached to the contract.
The determination governs, not your normal pay scale. If your rate is lower, you pay the determination for that work.
Classification matters
Rates are set per classification, and workers must be classified by the work actually performed. Misclassifying to a cheaper rate is the most common violation and it is what audits look for. That is the finding.
A worker performing two classifications in a day is paid for the hours in each.
Payroll records are submitted on a set schedule with a signed statement of compliance. Errors and late submissions can hold payment on the whole contract, and a contractor without an administrator for this will discover the cost after award rather than before bid.
Fringe benefits
A wage determination usually splits into a base rate and a fringe rate. The fringe can be paid as benefits or as cash, and the accounting has to show which. It is not small.
Contractors who read only the base rate underbid by the fringe amount, which is not small.
Apprentices
Reduced rates apply only where an apprentice is in a registered program and within the permitted ratio. Paying apprentice rates outside those conditions is a back-pay finding.
Price the administration
Certified payroll, classification tracking, compliance responses and record retention are a cost line. Public work can be good work, and it is not the same work at the same overhead. Price it in.
Common questions
What is prevailing wage?
A minimum rate per classification and locality, set by a wage determination attached to a publicly funded contract.
What is certified payroll?
Payroll records submitted on a set schedule with a signed statement of compliance.
What is the most common violation?
Misclassifying workers into a cheaper classification than the work performed.
What are fringe benefits in a determination?
A separate rate alongside the base, payable as benefits or as cash, which contractors often omit from a bid.
Can I pay apprentice rates?
Only for apprentices in a registered program and within the permitted ratio.