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Question:
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Ken:
I have for the first time in 30 years been given the opportunity to perform work for a few Municipalities in my area. Since the first quote that I made I think that I have more gray hair than from all 19 years of raising my two sons.
The law says that it is created to make a level playing field. I have found that the “field” is muddy. The rules, regulations and hoops that you must jump through are confusing, extensive and appear slanted in favor of the union. I have nothing against them as long as they allow me the ability to compete fairly. The fines and penalties are so serious it should bring pause to anyone that is in the business.
I believe that I understand that the rate has to be determined (since 1/7/2010) via a form filing with the Feds.
My biggest concern is that since becoming aware of the complex set of regulations I have found that none of the people that I bid against bid at the Prevailing wage rate. I have no desire to turn them in, (as the DOL representative advised), but I am being blown out of the running due to price. I need to figure out what the rules are, when the jobs (alarm, CCTV, Network/Telco Drops) are required to be paid at that Prevailing Wage rate.
If you could elaborate, I believe many of us would benefit.
Thank you.
WD
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Answer:
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If you bid municipal contracts or contracts where public financing is involved [or sometimes just an owner or general contractor who wants to insist on prevailing wage] you may find the Prevailing Wage provision in the contract. This provision requires you to pay your employees a minimum specified wage. One issue I have heard of was that alarm companies had employee categories that did not fit the employee wage guidelines and were forced to pay much more than they typically did to the employee. You don't want to be paying someone who pulls low voltage wire the same amount as an electrician, so you have to check the employee job description categories before you agree to pay those rates.
The penalty for failing to comply with the prevailing wage provision is usually severe. First, it gives the municipality [or whoever hired you] to terminate for cause. Secondly, it gives with the party who hired you or your employees [I haven't had any of these cases - so if anyone has better advice let us know] the right to sue you. If you agree to a prevailing wage provisions your employees can demand to be paid that amount and can complain to the department of labor if they don't receive that pay.
The municipality's right to terminate for cause brings to mind another typical provision in a municipal contract that can also be cause for gray hair, or no hair. The right to cancel for "any or no reason" and the obligation to pay you for only what work you have completed up until the time of termination. You can kiss your profit good bye, and you can often be made to wait until the job [now to be completed by someone else] is over.
Municipalities have this right to terminate provision because they cannot not commit to spending money that may not be funded in the future. But I have seen this clause in private contracts as well. If you agree to it then be prepared for the consequences when it's invoked against you.
I just has a client leave my office very unhappy that his very large job was canceled in an early stage. The termination for no cause was clear and prominent. His response to me that he agreed to it without bothering to read the contract because he had to agree to get the job is understandable, but he, and you, need to understand that sometimes things just don't work out as expected and when the contract is pulled out and read it is likely to govern your relationship, rights and remedies.
Be careful out there; lots of lawyers looking for something to do.