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Prevailing wage paper chase could stabilize pay rates for trades

Date Posted: February 7 2003

There is no law more important to the take-home pay of construction workers than the federal Davis-Bacon Prevailing Wage Act.

And there's a major opportunity on the radar screen for all of the building trades to fortify the benefits of the law in Michigan for years to come.

The opportunity comes in the form of a scheduled prevailing wage survey by the U.S. Department of Labor. DOL representatives met with hundreds of building trades union reps, as well as a few contractors, contractor associations and vendors, during two meetings last month in Livonia and Perry to explain how the survey works and what interested parties can do to improve the collection of information.

The goal of construction unions is simple, but getting there will take money and effort. Leading the charge is the Operating Engineers Local 324 Labor-Management Education Committee and the Laborers-Employers Cooperation and Education Trust Fund.

"If we can't demonstrate that 51 percent of work performed in a (county) jurisdiction is union, than the open shop rate prevails," said Ed Hartfield, who moderated the meetings on behalf of the Local 324 committee. "And whether the wages are open shop or union will have a direct effect on your contractors' ability to win bids, and your members' ability to get work."

Prevailing wage evens the playing field: without it nonunion contractors have an easier time winning bids by paying their help less than the prevailing wage.

"If there was ever an issue labor and management could rally around, this is it," Hartfield said. "But it will take a huge amount of cooperation and effort, and that's why we decided early on to get a leg up and get this process started."

The federal DOL selected Michigan for a year-long prevailing wage survey in 2004. But wage information for the survey will be taken from 2003 - and as anyone who pays income taxes knows, the process is easier when the paperwork has been accumulated during the course of the year.

"If we wait until 2004, contractors will have to go back to 2003 for the wage information, and they have enough to do," said Don Mistonen of the Local 324 Labor-Management Education Committee.

And collecting the information will be no small task. Davis-Bacon prevailing wage rates are collected for four major types of construction: building, heavy, highway and residential. But within those four types are dozens of subcategories that reflect the diversity of the building trades.

For example, prevailing wage only applies to some types of service work performed by the pipe trades. Electrical workers have different classifications for industrial, residential, and sound and communication work. Operators have different pay scales depending on the equipment that's being run. There's usually a category for everybody, but there are plenty of gray areas to complicate matters.

Beyond the wage rates for the various job classifications, Davis-Bacon Wage Survey Form WD-10 requires contractors to provide the number of employees for a given project, the number of days they worked on the project, and breakdowns of health and welfare, pension and fringe benefits payments.

Knowing that many contractors are going to balk at the paperwork - especially when there is no legal requirement for them to fill it out - the preliminary plan is for the unions and their vendors to compile as much of the information as possible. Ultimately, the contractors are responsible for, and sign the survey form.

It all amounts to a potential mountain of information, but the DOL reps said they'd rather have it than not have it. They will be sending out letters to all contractors, both union and nonunion, informing them about the pending survey. Essentially, whether union rates or nonunion rates prevail in a given area depends upon who does the best job of legally stuffing the ballot box, so to speak, with those WD-10 forms.

"If you don't take the time to fill out the forms, we cannot issue the new rates," DOL representative Clara Tate told the building trades group in Livonia. She expressed frustration about "working hard to do a survey and not having enough information."

One tool that should ease the way is the relatively new use of computer forms - paper can still be used, but the DOL is now set up to process information electronically. The building trades will be relying on vendors like benefits administrator TIC to set up a system that will compile and regulate the flow of information. Before any of that information is submitted, however, participating unions will need to designate and train people how to go about gathering the information, and coordinate with contractors and other trades so that there isn't a duplication of effort.

"It's important that we're successful," said Local 324 Business Manager Sam T. Hart. "And the only way to be successful is to be coordinated with our affiliated contractors."