The NSCA Codes & Compliance Committee provides a forum for members to ask questions and find answers to the issues they’re most concerned about in regard to compliance.
Ask our committee a question and the most appropriate subject-matter expert will provide you with direction or advice. We may point you to other resources on NSCA’s website or to the leading authorities on the topic as well.
Our goal is to provide direction and best practices while respecting the local authority having jurisdiction (AHJ). The general advice we provide may still require you to check local ordinances, codes, or permitting regulations.
Labor Laws, Licensing & Prevailing Wages (4)
Are rules changing about the use of subs and other 1099 contract employees and if so where and how?
This seems to be an ongoing concern. We are particularly interested in the recently adopted CA AB 5. The rules on determining who is an independent contractor and who is an employee are being tested again through companies like Uber and others who have very restrictive rules and policies to where they appear to governing agencies to conduct business more as an employee. You can follow that legislation here… https://www.nsca.org/track-legislation/
Federal law dictates that each state is responsible for the code requirements of a state and/or municipality/city. Some states have a state code that each municipality/city must adhere to.
In addition, each municipality/city may have supplementary requirements. Some states (i.e. Missouri) have a state code for state buildings, but allow each municipality/city to decide which codes are valid within that municipality/city.
While this may seem confusing, a school district should conduct an online search of municipality/city codes. From there, the district will quickly discover whether the municipality/city has a unique code or whether the municipality/city is under the requirements of a state code.
Online resources such as www.municode.com have up-to-date lists of all municipality/city codes.
We are seeing new legislation and hearing reports of increased sub-contractor claims against our members on prevailing wage projects. Does NSCA know if that is a state by state thing? A federal David Bacon provision or what? The scenario would be that we comply with certified payroll and all but bring in subs that pull wire or whatever and not pay their people prevailing wage. Do you see any new regs clamping down on that?
A: The federal Davis-Bacon Act requires that prevailing wages be paid on federally funded public works projects, such as construction, repair or alteration of public buildings, or construction of public roads or bridges. The federal law sets a minimum threshold of $2,000. States must abide by the Davis-Bacon Act when federal funds are involved in public works projects within the state. Not all occupations are subject to prevailing wage under Davis-Bacon, but the prevailing wage for those occupations that are subject (specifically on-site laborers and mechanics) are determined by the U.S. Department of Labor through surveys of wages paid in those occupations in surrounding areas and they include both union and nonunion labor. States also have their own prevailing wage requirements, sometimes known as the “little Davis-Bacon Act”. The actual prevailing wage rates and application depend upon the state in which the project is located. States that do have prevailing wage rates have dollar thresholds for contract coverage (summary of thresholds by stated is posted at the DOL online here). The rate itself is determined by the prevailing wage determination assigned to the subcontractor (e.g. sound and signal technician), which in many cases also varies by county (similar to Davis-Bacon). We price both our labor and our subcontractor labor using the applicable prevailing wage rate (where prevailing wage applies). Our subcontractors are required to make their own prevailing wage determination (as it relates to which prevailing wage rate applies); however, in most instances, it is the same determination we use for that jurisdiction. We also push down the prevailing wage requirements to our subcontractors via contract and, therefore, we require them to include certified payroll reports with their applications for payment as a condition to payment (much like we do with lien releases). I believe the biggest source of these issues is the need for integrators to push down these requirements to their subcontractors and ensure their subcontractors are complying with these regulations to the same extent to which we, as integrators, are required to comply as it relates to the work being performed by that subcontractor.
A: Generally, when prevailing wage rates are required to be paid we use our own labor to perform the work and pays our employees the required prevailing wage rate. We probably subcontract out roughly 20% of work that is subject to prevailing wage rates. When we subcontract out to a third party for work performed on a prevailing wage rate project we advise the subcontractor (i) this project is subject to prevailing wage and you will be required to furnish us certified payroll proving you paid prevailing wage rates; (2) we need you to include prevailing wage rates in your pricing; (3) we provide them with the prevailing wage rate pricing schedules if they do not have them; and (4) we confirm when we receive the proposal that they did include labor rates which meet the prevailing wage rates required. Thereafter, we require the subcontractors to submit to us certified payroll monthly which is required for us to pass along to the General Contractors or Customer direct (depending on if a GC is involved). We have an employee who reviews the certified payroll received from subcontractors to verify the correct rates were paid as well. In my opinion, any issues related to this is more of a miscommunication issue of an AV integrator not advising a subcontractor that prevailing wage rates are required when they request a quote from the subcontractor and thereafter not require certified payroll to prove that prevailing wage rates were paid to the subs employees. Also, another miscommunication may be an AV integrator not asking the customer/GC if prevailing wage rates are required to be paid. We always ask on all projects that we bid as a standard RFI.
Visit the U.S. Department of Labor site. Also look at NSCA’s Legislative Tracking Map to track new laws and regulations on proposed changes in your state.