Significant Expansion of Wisconsin's Prevailing Wage Law

Dec 14 2009


Since the 1930s, a local government entity has been required to ensure that prevailing wages are paid on that entity’s public works projects, when those projects exceed a designated threshold cost. In 2009, that threshold cost was $48,000 for projects completed by a single type of trade or $234,000 for projects that involved multiple trades. Superintendents and School Business Officials need to be aware of two significant changes recently made to the prevailing wage law. First, the distinction between projects completed by one trade and projects involving multiple trades was eliminated. Second, beginning January 1, 2010, all public works projects with a cost of $25,000 or more must comply with the prevailing wage law and receive a prevailing wage determination from the Department of Workforce Development.

What types of projects are covered by the prevailing wage law?
The prevailing wage law applies to all public works projects with a cost of at least $25,000. Public works include erecting, constructing, remodeling, repairing, and/or demolishing projects. The law excludes minor service or maintenance work. In determining the cost of a project, the District should include all labor, material, furnishings or other things required to be supplied by all of the bidders necessary to construct a project for its intended use (not including the cost of land, architectural and engineering fees and planning and research costs.) The prevailing wage law also applies to “turn key” projects in which the District does not gather the bids itself, but instead leases, purchases, or acquires the project upon completion.

What does the prevailing wage law require of School Districts?
When a public works project will cost $25,000 or more, the District must:

  • Request a prevailing wage determination from the Department of Workforce Development at least 30 days before soliciting bids or negotiating contracts;
  • Inform potential contractors at the time of soliciting bids that the project is subject to the prevailing wage law and that violating the prevailing wage law could result in liquidated damages of 100% of the wages owed to the employees;
  • Include a copy of the prevailing wage rate determination in the construction contract;
  • Require contractors to provide the DWD with monthly certified payroll records;
  • Post the prevailing wage rate determination at the project site; and
  • Obtain an affidavit of compliance from each prime contractor before making final payment for the project.

If a District has ongoing projects subject to the prevailing wage law, then the District must inform the contractors that effective January 1, 2010 the contractor must file monthly certified payroll records with the Department of Workforce Development.

Impact
Superintendents and School Business Officials must be aware of the new thresholds for application of the prevailing wage law. Because these thresholds were significantly lowered, school districts must be prepared to comply with the prevailing wage law more frequently than ever before. School Districts will also need to strategically analyze how they schedule and perform construction projects so as to minimize the economic costs from these reduced thresholds.


von Briesen & Roper Legal Update is a periodic publication of von Briesen & Roper, s.c. It is intended for general information purposes for the community and highlights recent changes and developments in the legal area. This publication does not constitute legal advice, and the reader should consult legal counsel to determine how this information applies to any specific situation.