Scott of Smith, Currie & Hancock LLP Published May 18, 2021 On April 27, 2021, President Biden issued Executive Order 14026 – Increasing the Minimum Wage for Federal Contractors (“EO 14026”), which sets the minimum wage for federal contractors at $15.00 starting in 2022
Under this three-step process, in the absence of a wage rate paid to a majority of workers in a particular classification, a wage rate is considered “prevailing” if it is paid to at least 30% of such workers as opposed to 50% under the previous rules. If no wage rate is paid to 30% or more workers in a classification, only then will a weighted average rate be used. WHD also can count functionally equivalent but non-identical wage rates, such as zone rates, escalator-clause rates, night-shift differential and combined hourly-fringe rates, as the same rate for the purposes of determining the prevailing wage.[26] Non-collectively bargained wage rates may now be periodically updated based on Bureau of Labor Statistics’ data. However, the rates may be adjusted no more than once every three years, no sooner than three years after the date of the rate’s publication, continuing until the next survey results in a new general wage determination.[27] The “area” unit used in wage determinations now includes circumstance-specific alternatives to the existing definition. For multi-county projects, there is an option to include counties’ data and issue a single wage rate per classification to be used for the project
Under the legislation, some states prosecute the workers’ wage claims, whereas other states allow a private cause of action.
One of DOL’s goals with the new rule was to create mechanisms to increase wage and fringe benefit rates on a more frequent basis
These wage determinations are calculated through the use of wage surveys conducted by DOL to determine what wage and fringe benefits are prevailing in the locality. 2
“Prevailing Wages” Formula Currently, DOL identifies a wage rate as prevailing in the area if it is paid to a majority of workers in a classification on the wage survey (i.e., more than 50%)
Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) and the Wage & Hour Division (WHD) have jurisdiction over certain construction contractors
Section 220-i applies to contractors and subcontractors for all New York public works, and for all covered private projects under the recently expanded prevailing wage laws. 3 Each contractor/bidder must obtain and submit a registration certificate from DOL with its bid for a public project, or prior to commencing work on a covered private project. This requires the contactor to provide DOL with information and documentation regarding: its business entity, owners and officers; tax identification number, unemployment insurance registration number and workers’ compensation board employer number; proof of workers’ compensation insurance coverage; outstanding wage assessments, debarment history, final determinations as to any violations of labor, employment tax, workers’ compensation and workplace safety laws; apprenticeship program participation; and MWBE status
Employees that have been improperly classified as independent contractors may also be able to assert a claim against their employers under the Virginia Wage Payment Act, which generally requires employers to make timely payment of all wages earned. As discussed in a previous update , the Wage Payment Act provides for the recovery of up to three times the amount of any wages owed, making it a particularly attractive tool for employees seeking to challenge their classification as independent contractors. Importantly for employers in the construction industry, the Wage Payment Act also specifically provides that contractors on certain large-scale commercial projects may be liable for the wage payment violations of any subcontractor on the project
Under the PPP, borrowers who have spent all of their PPP loan on permitted expenses still faced reductions in their forgiveness amount if they had reductions in their FTE counts or reduced salary or wage rates during the covered period. Not having to be penalized for headcount reductions or reductions in salaries or wage rates should be welcome relief for these small borrowers