February 5, 2010Client Alert

Prevailing Wage Update: Enforcement of Penalties on Hold, But Contractors Still Have to File Certified Reports

The State of Wisconsin Department of Workforce Development (“DWD”) will place a hold on penalizing contractors that fail to comply with new prevailing wage report requirements. The agreement to place a hold on penalties was reached between DWD and Associated Builders & Contractors of Wisconsin Inc. (“ABC”) during a scheduling conference Wednesday, February 3, 2010 with Dane County Circuit Court Judge John Markson. The scheduling conference was related to a lawsuit filed by ABC challenging the new prevailing wage law, and ABC’s concurrent motion for a temporary injunction blocking enforcement of the law.

The hold on enforcement of prevailing wage reporting requirements is expected to continue until April 19, 2010, when Judge Markson is scheduled to grant or reject ABC’s request for an injunction. However, while DWD will not be assessing penalties, contractors are still expected to comply with the reporting requirements beginning February 7, 2010.

The new prevailing wage requirements went into effect January 1, 2010. In addition to expanding the applicability of prevailing wage to, among others, private construction projects that receive more than $1 Million in direct financial assistance from local governmental units, the new rules require contractors and subcontractors working on a prevailing wage project to file monthly certified payroll reports evidencing compliance with prevailing wage.

The dispute regarding enforceability of the new rules arose from widespread confusion regarding the information that needed to be reported each month. The statute requires contractors to provide their names, the type of work performed by every employee on a prevailing wage project, an accurate record of all hours worked on the wages paid for that work. For union-signatory contractors, the statute requires only that a copy of the contractor’s collectively bargained agreement be filed.

DWD’s reporting spreadsheet, however, contains 50 fields for contractors to complete, including requests for social security numbers, straight and overtime hours for each day, weekly wage and hour totals, union status and union affiliation.

In addition to questions regarding DWD’s ability to request information not required by statute to be reported, contractors’ efforts at compliance with the new rules have been stymied by a large volume of misinformation regarding the applicability of prevailing wage and other requirements of the new law and industry associations have been scrambling to keep their members updated.

If you have any questions regarding the requirements of prevailing wage, please contact one of the authors of this alert or your Michael Best attorney.

View Michael Best's Prevailing Wage Facts and Myths sheet

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