Area wage standards, union scale, and “prevailing wages” are minimum payments contractors or subcontractors must pay employees when performing certain publicly funded contracts. A wage standard is calculated based upon the average payments for the corresponding class of laborers or mechanics employed on similar projects in the area and are generally found in multi-employer collective bargaining agreements.
If an apprenticeship program is registered with the Department of Labor or with a state agency recognized by the DOL then sometimes apprentices may be employed at less than the area wage standard. Trainees also may work for less if they participated in a training program that received certification by the Department of Labor.
Prevailing wage law is codified in Ohio Revised Code § 4115 and defines prevailing wage as the sum of the following: base hourly rate of pay, life insurance, pensions, health insurance, vacation or paid holidays, apprenticeship programs, and other bona fide fringe benefits.
As of September 29, 2013, the “new” construction threshold increases to $250,000. The “reconstruction, enlargement, alteration, repaid, remodeling, renovation, or painting” threshold level has been adjusted to $60,000 and $75,000. New construction involving roads, streets, alleys, sewers, ditches, and other works connected to road or bridge construction threshold levels has been adjusted to $82,137 while reconstruction, enlargement, alteration, repair, remodeling, renovation, or painting that involves roads, streets, alleys, sewers, ditches, and other works connected to road or bridge construction threshold level has been adjusted to $24,609.
Calculating prevailing wage rates can be daunting for employers – especially when new to the prevailing wage process. Even seasoned employers sometimes unintentionally run afoul of the law. Unfortunately, unions are quick to file public records requests for projects they are not working on, scrutinize pay practices on those projects, and instigate prevailing wage audits. Employers that do not follow area wage standards may be subject to contract termination, prevented from being awarded future contracts, and may have payment for work already performed withheld.
Unions may lawfully picket to protest wages that are lower than area standards. This is usually seen at non-union construction sites by inflating the union rat. If below scale wages are alleged, the National Labor Relations Board will investigate whether the union actually looked into the employer’s wages and benefits or had other reliable sources of information to support its allegations. In Ohio, prevailing wage claims are investigated by the Ohio Department of Commerce.
Matt Austin is a Columbus, Ohio employment lawyer who owns Austin Legal, LLC, a boutique law firm with offices in central and northeast Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can email Matt at Austin@LaborEmploymentOSHA.com or call him at 614.285.5342.