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A prevailing wage is the minimum wage (with fringe benefits) all contractors, subcontractors, and employers working on state- or local-funded public works projects must pay their workers.
Contractors responsible for such projects are legally obligated to pay employees working similar occupations in the same locality a standard minimum rate.
Contractors, subcontractors, and employers must abide by these prevailing wage laws or suffer harsh legal consequences. Legalities aside, paying these prevailing wages also ensures a level playing ground for contractors and helps maintain the living standards of the affected workers.
Today’s guide investigates key details of Massachusetts’ prevailing wage laws. Here, you’ll learn the basics of these laws, how they are determined and enforced, and how to ensure compliance.
Understanding Prevailing Wage Laws in Massachusetts
Massachusetts was the fifth state to enact prevailing wage laws in 1911.
In Massachusetts, prevailing wages are determined on a project-to-project basis and usually run throughout the year except for projects spanning multiple years.
Besides public works projects, prevailing wage laws in Massachusetts also apply to hauling, waste and recycling disposal, school bus transportation, and certain housing authority jobs.
Prevailing wage matters in Massachusetts are handled by the Department of Labor Standards, as stipulated under G.L. c. 149, §§ 26 – 27, also known as The Prevailing Wage Law.
Under the Prevailing Wage Law, the hourly rates of apprentices, mechanics, laborers, teamsters, and chauffeurs in public works constructions shall be no less than those paid to other workers in similar trades in the same locality.
Prevailing wage also encompasses fringe benefits, such as the following:
- Pension benefits
- Holiday benefits
- Vacation benefits
- Health and welfare benefits
- Unemployment benefits
Prevailing wage laws apply to all projects by public agencies, including local governments, universities, school districts, and public bodies.
The public agency that awards the contract is known as the “awarding authority.” The awarding authority must legally include current prevailing wage rates in its contracts and bid documents.
Like other states, Massachusetts has a minimum threshold for projects where prevailing wage laws apply. Only state- or locally-funded projects over $1,000 must pay the prevailing wage to qualifying workers.
Prevailing wage rates apply to the following public works under the Prevailing Wage Law (G.L. c. 149, §§ 26 – 27H, G.L. c 71, §7A, G.L. c 121B, §29B):
- Public construction work, including building erection, repair, renovation, maintenance, and demolition. Other types of construction work covered are soil exploration, soil boring tests, and excavation.
- The transportation of students to public schools during school days and trips in areas with populations of 16,000 and more
- The movement of office furniture, fixtures, and equipment
- Janitorial services for cleaning state offices and buildings leased by the state
- Specific housing authority workers, including mechanics, laborers, and maintenance employees
Any awarding authority seeking bids for a public project must first obtain the latest prevailing wage schedule from the Department of Labor Standards. This schedule contains the minimum hourly rate that contractors must pay to workers involved in the project.
Next, the DLS will furnish all contractors who bid for the project with a copy of the prevailing wage rate schedule. The DLS provides potential contractors copies of the prevailing wage rate for non-competitive bids. This schedule becomes a legally recognized part of the contract and project documentation.
Once the awarding authority grants the contract, the winning contractor must comply with the prevailing wage rates.
Prevailing wages apply to both unionized and non-unionized employees.
Aside from paying the required wage, contractors must also post the prevailing wage rates at a visible and accessible spot at the job site for all workers to see. In doing so, employees will know how much they should be paid for their work and report any violations. This includes overtime pay for all work exceeding 40 hours in a 168-hour work week.
Contractors must also submit weekly payroll report forms and compliance statements to the awarding authority.
Purpose and Goals of Prevailing Wages in Massachusetts
Kansas was the first state to adopt prevailing wages, which were bundled with laws addressing other labor issues in bills passed in 1891.
In 1931, the U.S. Congress passed the Davis Bacon Act, establishing a prevailing federal wage for federally funded projects. Its main purpose was to ensure fair compensation for workers in the construction industry, maintain their living standards, and prop up the economy.
Prevailing wages in Massachusetts serve various purposes and are critical for maintaining the state’s economy and infrastructure. The main reasons for prevailing wages in the Bay State include:
Protecting Local Workers
A prevailing wage prevents out-of-area contractors from undercutting local workers. Without a prevailing wage, contractors would bid lower quotes and bring in foreign workers who are likely to accept lower wages.
This law maintains a standard rate that ensures local workers receive fair compensation and can maintain their standard of living.
Workers will have enough money to support their families and play an active role in boosting the economy.
Ensures Fair Competition
Prevailing wage laws help maintain fair competition among contractors when bidding for state-funded projects.
By ensuring a standard pay rate, quotations become less of a consideration when awarding contracts. Instead, awarding authorities can focus on aspects like track record, competence, and similar merits.
Stimulates the Economy
Prevailing wage laws ensure blue-collar workers earn a decent salary, improving their quality of life.
By raising their wages, the state increases their spending power, which has a domino effect on the economy. This improves the business environment and encourages workmanship in the affected rates.
Attracting Skilled Talent
Higher wages attract brilliant, hard-working residents to pursue a craft. This leads to improved workmanship across the board, enhances productivity, and improves work quality, boosting the state’s infrastructure.
Skilled workers eventually become mentors and trainers that usher in the next generation of skilled laborers and so on.
Determining Prevailing Wages in Massachusetts
In Massachusetts, prevailing wages are determined through a process established by the state’s Division of Capital Asset Management and Maintenance (DCAMM) and the Department of Labor Standards (DLS).
The prevailing wage is the rate typically paid to workers in a particular locality, classification, and type of work.
The DLS will issue the required minimum rate plus fringe benefits for each public work construction project and other affected services. They’ll also issue the appropriate classifications for the affected trades.
The Attorney General’s Office enforces prevailing wage laws in the Bay State.
Determining prevailing wages is a comprehensive, all-inclusive process that includes consultations with various stakeholders and other interested parties. The process is as follows:
Classification and Locality
The first step in determining prevailing wages is to identify the specific classification of work and the geographic locality where the work will be performed.
Classifications typically refer to different trades or occupations, such as carpenters, electricians, plumbers, etc.
Survey and Data Collection
DCAMM and DLS collect data through surveys and other means to determine the prevailing wage rates for various work classifications in different geographic areas (counties) within the state.
This data collection process involves gathering information on wages paid by contractors and subcontractors who perform similar types of work in the area.
Analysis and Calculation
Once the data is collected, DCAMM and DLS analyze the information to determine the prevailing wage rates for each work classification in each geographic area.
This analysis considers factors such as the type of work, skill level required, prevailing industry standards, and local economic conditions.
Publication and Enforcement
After determining the prevailing wage rates, DCAMM and DLS publish them in schedules available to contractors, subcontractors, workers, and the public. These rates are then enforced on public construction projects and other projects that receive public funding or support.
It’s also worth noting that prevailing wage rates may be updated and adjusted periodically, depending on the following factors:
- LOCAL LABOR MARKET CONDITIONS: The supply and demand for skilled labor in a particular locality can significantly impact prevailing wage rates. For instance, counties like Dartmouth and Attleboro, with heavy development activity, have a high demand for skilled workers
- COST OF LIVING: Prevailing wage rates often reflect living costs in a specific geographic area. In regions with higher living costs, such as major cities or affluent suburbs, prevailing wages may be higher.
- INDUSTRY STANDARDS AND PRACTICES: Prevailing wage rates are influenced by prevailing industry standards and practices within specific trades or occupations. These standards can vary based on factors like the work's complexity, the skill and experience required, and prevailing union contracts or collective bargaining agreements.
- GOVERNMENT REGULATIONS AND POLICIES: Prevailing wage rates may be influenced by government regulations and policies, including state and federal prevailing wage laws, which require certain minimum wage rates to be paid on public construction projects and projects receiving government funding or support.
- UNIONIZATION AND COLLECTIVE BARGAINING AGREEMENTS: In industries and regions where labor is highly unionized, prevailing wage rates may be influenced by collective bargaining agreements negotiated between labor unions and employers. These agreements often establish minimum wage rates and other terms and conditions of employment for workers in specific trades or occupations.
- ECONOMIC CONDITIONS AND TRENDS: Prevailing wage rates can be affected by broader economic conditions and trends, such as inflation, economic growth or contraction, changes in productivity, and fluctuations in construction activity and demand for skilled labor.
- GOVERNMENT SURVEYS AND DATA COLLECTION: Prevailing wage rates are often determined through government surveys and data collection efforts that gather information on wages paid by contractors and subcontractors for similar work in the local area.
Compliance with Massachusetts Prevailing Wage Laws
In Massachusetts, prevailing wage laws impose specific responsibilities on contractors involved in public works projects. These laws are designed to ensure that workers are paid fair wages and benefits comparable to those in the local area where the work is performed.
Here’s an overview of contractor responsibilities under prevailing wage laws in Massachusetts:
Payment of Prevailing Wages
Contractors must pay their employees the prevailing wage rates established by the Massachusetts Department of Labor Standards (DLS) for the specific trade or occupation in which they are employed.
Prevailing wage rates typically include base hourly wages and fringe benefits, such as health insurance, retirement contributions, and apprenticeship programs.
Compliance With Wage Determinations
Contractors must comply with the prevailing wage determinations issued by the DLS for each public works project in which they are involved.
These determinations specify the applicable wage rates, working conditions, and fringe benefits that contractors must adhere to throughout the project.
Recordkeeping and Reporting
Contractors must maintain accurate payroll records for all employees working on public works projects. These payroll records must include detailed information, such as hours worked, wages paid, fringe benefits provided, and deductions made.
Contractors may be required to submit weekly certified payroll reports to the awarding authority or the DLS to demonstrate compliance with prevailing wage requirements.
Subcontractor Compliance
General contractors are responsible for ensuring that subcontractors and their employees comply with prevailing wage laws. They may be held liable for any violations subcontractors commit, including failure to pay prevailing wages or maintain accurate payroll records.
Notification Requirements
Contractors must provide written notice to all employees working on public works projects to inform them of their prevailing wage rates and fringe benefits.
The notice must be posted in a conspicuous location at the worksite and include information about how employees can report violations or concerns to the DLS.
Compliance Monitoring and Enforcement
The DLS is responsible for monitoring compliance with prevailing wage laws and investigating complaints about violations.
Contractors found to violate prevailing wage laws may be subject to penalties, fines, debarment from public works projects, and other enforcement actions.
Training and Education
Contractors should ensure their employees are informed about prevailing wage laws and their rights under these laws. Training and education on prevailing wage requirements can help prevent unintentional violations and promote compliance with the law.
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Noncompliance with the prevailing wage law can result in various penalties and consequences, including
- FINES AND PENALTIES: Contractors and subcontractors found to be violating the Massachusetts prevailing wage law may be subject to fines imposed by the state. These fines can vary depending on the nature and severity of the violation.
- CONTRACT TERMINATION: Noncompliance with prevailing wage requirements can lead to termination of the contract for the construction project, resulting in financial losses, including forfeiture of any payments made on the project.
- LOSS OF BIDDING PRIVILEGES: Contractors and subcontractors who repeatedly violate prevailing wage laws may lose their privileges to bid on public construction projects in Massachusetts.
- LEGAL ACTION AND LAWSUITS: Contractors and subcontractors may face legal action, including civil lawsuits, brought by affected workers or labor organizations seeking compensation for unpaid wages or other damages resulting from noncompliance with prevailing wage requirements.
- DEBARMENT: In severe cases of noncompliance, contractors and subcontractors may be debarred from participating in public construction projects for a certain period.
- ECONOMIC CONDITIONS AND TRENDS: Prevailing wage rates can be affected by broader economic conditions and trends, such as inflation, economic growth or contraction, changes in productivity, and fluctuations in construction activity and demand for skilled labor.
- GOVERNMENT SURVEYS AND DATA COLLECTION: Prevailing wage rates are often determined through government surveys and data collection efforts that gather information on wages paid by contractors and subcontractors for similar work in the local area.
Navigating Prevailing Wage Requirements in Massachusetts
Navigating prevailing wage requirements in Massachusetts requires employers and employees to understand the laws, regulations, and processes involved. Here are some key steps to help employers and employees navigate prevailing wage requirements in Massachusetts:
For Employers:
- KNOW THE LAW: Familiarize yourself with Massachusetts prevailing wage laws, including the requirements for public construction projects. The Massachusetts Department of Labor Standards (DLS) is the primary agency responsible for enforcing prevailing wage laws in the state.
- DETERMINE APPLICABILITY: Determine whether your construction project is subject to prevailing wage requirements. In Massachusetts, most public construction projects exceeding certain cost thresholds are subject to prevailing wage laws.
- CLASSIFY WORKERS CORRECTLY: Properly classify workers according to the prevailing wage rates established for their respective trades and occupations.
- MAINTAIN ACCURATE RECORDS: Keep detailed and accurate records of all hours worked, wages paid, fringe benefits provided, and other relevant information for each employee working on a prevailing wage project.
- STAY UPDATED: Stay informed about any changes or updates to Massachusetts prevailing wage laws and regulations. Periodically review guidance and resources the Massachusetts DLS provides to ensure compliance with current requirements.
For Employees:
- KNOW YOUR RIGHTS: Understand your rights as an employee working on a prevailing wage project in Massachusetts. Familiarize yourself with the prevailing wage rates applicable to your trade or occupation and ensure you receive the correct wages and benefits mandated by law.
- REPORT VIOLATIONS: If you believe your employer does not comply with prevailing wage laws or have concerns about unpaid wages or benefits, consider reporting the violations to the Massachusetts DLS.
- KEEP RECORDS: Keep records of your hours worked, wages earned, and any fringe benefits received while working on prevailing wage projects.
- SEEK ASSISTANCE: If you have questions or concerns about prevailing wage requirements or believe your employer does not comply with the law, consider seeking assistance from labor unions, legal aid organizations, or other relevant advocacy groups.
Compliance Challenges and Solutions
Contractors in Massachusetts face several challenges regarding compliance with the state’s prevailing wage law. Some of these challenges include:
- COMPLEXITY OF COMPLIANCE: Massachusetts prevailing wage law is complex and involves various requirements, including specific wage rates for different trades and occupations, recordkeeping obligations, and compliance with prevailing wage determinations issued by the state
- TRACKING HOURS AND BENEFITS: Contractors must accurately track the hours worked by employees on prevailing wage projects and ensure that they receive the correct wages and benefits as mandated by law.
- ADMINISTRATIVE BURDEN: Meeting prevailing wage requirements entails significant administrative burdens, including maintaining detailed payroll records, submitting certified payroll reports to the appropriate authorities, and responding to inquiries or audits from regulatory agencies.
- ENFORCEMENT AND PENALTIES: Contractors who do not comply with prevailing wage laws risk penalties, fines, contract termination, and other enforcement actions.
To address these challenges, contractors in Massachusetts can consider implementing the following solutions:
- EDUCATION AND TRAINING: Contractors should invest in educating their personnel about prevailing wage laws, including training programs, workshops, and resources provided by industry associations or legal experts.
- UTILIZATION OF TECHNOLOGY: Leveraging technology, such as payroll software and time-tracking systems, can streamline recordkeeping processes and help contractors accurately track hours worked, wages paid, and employee benefits on prevailing wage projects.
- CONSULTATION WITH LEGAL EXPERTS: Contractors may benefit from seeking guidance and advice from legal experts or consultants specializing in labor law and prevailing wage compliance.
Conclusion on Massachusetts Prevailing Wages
Prevailing wages promote fairness and stimulate the state’s economy. Contractors and employees should play their part in complying with these laws to maintain a conducive business environment and a prosperous state.
Prevailing wage laws are complicated, but compliance is mandatory. Breaching prevailing wage laws has dire legal consequences, including fines and debarments.
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