Prevailing Wage


From original questioner:

I have been given the opportunity to bid on a job which requires prevailing wage. This is a first for me. I have heard people say how they make so much money on these types of jobs but I can't figure how I would make more money by having to pay my employees more. When bidding these jobs how do you adjust your hourly rate? What am I missing here? Any insight would be helpful.

From contributor ja

is it state, federal or private,, is this the only spec on this ?

From contributor Mi

A percentage of the total project is for business profit....If your cost are higher than normal ( wages) then your total cost of the project would be higher and so would your profit...Is the prevailing for the entire work you will be doing ? Our last project was prevailing for only the time spent on the jobsite..which was about 30% of the time. Keep good records.

From contributor ja

We do Federal projects which fall under the Davis Bacon Act. we file Certified Payrolls for "Prevailing wages" which are Minimums and less than what we actually pay, Like Mike this is for the onsite work only.

From contributor La

The term "prevailing wage" is a bit of a miss nomer. It generally means highest union wage and not just in your town. Check to see what it is defined as in your area. Keep very good records. It may also require you to pay "health & welfare" payments to the union, even though your employees can't collect on them. Your on-site workers will have to conform to the "work rules." I moved a piece of angle iron out of the way. The steelworker's steward shut down the entire job while he and the contractor negotiated how much had to be paid to the union for a "willful" violation of the work rules. Only steelworkers can move steel! I worked one summer as a member of the Teamsters, learned a lot about the "system."

From contributor Wy

It is a federal job under the Davis Bacon act like James mentioned. I was given all the info with the bid package so I know what to pay my crew i was just wondering how you adjust your rate to profit from the increased pay. Michael's method sounds logical. James, according to the document I need to pay my employees almost 50 dollars an hour. You already pay your employees more than that?! Are you hiring? Thanks for the responses. I am still open to more suggestions if anyone has any.

From contributor ro

prevailing wage is no different than any other bid except it is likely that they will be required to pick the lowest bidder. So you adjust your labor cost to cover higher wages and then bid it. If you bid lowest, you win. Just like all other bids. That is what I do... Ron

From contributor Al

If you have health insurance and vacation and paid holidays you can pay the difference between what you pay and what the union carpenter gets in fringes directly to the employee.
So if you pay $10 per hour and the union is $15 and you health and vacation add up to $5 per hour and the union is $10
you pay your employees $25 per hour to cover the $5 difference in wages and $5 differences in fringes. If there is an apprentice plan you may need to contribute to that.

Being aware that you will be paying your employees $10 per hour more, you may experience that the employees may take longer to complete tasks to enjoy the windfall