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Missouri Changes Prevailing Wage Law

 

ADpwSurvey_smThe Missouri House of Representatives approved a measure changing the way prevailing wages are calculated throughout the state by a vote of 91-65 on March 14th, By not taking action on House Bill 34, Gov. Nixon has allowed House Bill 34 to become law. On 07/12/2013 – since Gov. Nixon took no Action, this basically became law and was sent to Sec of State/Article 3 Sec 31(H) to be entered as state law. 

In short, HB 34 changes the way that the Department of Labor and Industrial Relations determines the prevailing hourly rate of wages on public work projects across the state. Basically, it modifies how prevailing wage is calculated to make it more economical for rural communities, thus making the prevailing wage not the same statewide. To me this is a significant victory for employers/contractors across the state, especially those who are in rural Missouri.

 

Dan Mehan said:  

“Prevailing wage law is antiquated policy that has outlived its purpose. This legislation addresses that fact and provides relief to outstate Missouri, where it is needed most.  We believe it will save thousands of taxpayers’ dollars on public projects.  This is money that can instead be spent on education and other public needs, not artificially inflated wages.”

 

 To me the best part of this is non-union rates will now be included in the prevailing wage determination, which will allow local contractors to participate in projects. Missouri legislation hopes that now city, county and school projects that had been waitlisted due to high union rates will now be able to move forward and help provide local communities with facilities that are more accessible.

Prior to HB 34 passing and becoming law, projects were being calculated based on volunteer surveys collected and submitted by contractors on public work projects. The problem is/was, about 70 percent of Missouri counties don’t have any wages reported. In those cases, the system looked to collective bargaining agreements, sometimes including those in different states or previously reported wages, which usually inflated the rate.

The new law now requires those wage surveys to be split between union and nonunion wages. Then the wage would be set by whichever group, union or nonunion, reported more hours of work. If there are no reports for a current year, the wage would then be set by an average of reports from the last six years. If the county has no reports for the past six years it will look to surrounding counties for these reports instead of using the State average where the big city prevailing wage is extremely high. These modifications will bring the wages more in line with what is normally paid in the local area.

Still the system is still based on the number of contractors reporting their wages, by way of taking the wage surveys.uld be set by whichever group, union or nonunion, reported more hours of work. If there are no reports for a current year, the wage would then be set by an average of reports from the last six years. If the county has no reports for the past six years it will look to surrounding counties for these reports instead of using the State average where the big city prevailing wage is extremely high. These modifications will bring the wages more in line with what is normally paid in the local area.

You can do this electronically, or by Form.

Prevailing wage

 

Are you in MO and need information on Prevailing Wage. Here is a link to the Missouri Department of Labor Prevailing wage section. 

© 2013, Bruce McFarland. All rights reserved.

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1 Comment

  1. July 25, 2013    

    Great article Bruce! This new bill will level the playing field and make wage rates fairer to contractors in rural counties.

    However, there are pros and cons to everything.

    With a single statewide prevailing wage rate the pro (if you want to call it that) is ease of payroll processing due to the fact that you pay the same prevailing wage rate and fringe benefit package no matter where you work within the state.

    When prevailing wage rates and fringe benefit rates change by county – payroll processing becomes more difficult – especially for the contractors that work in various locations. When Joe works on Job A he will be subject to one set of wages & fringes and when he works on Job B he is subject to another set of wages and fringes. This ends up meaning more work for the payroll clerk.

    No matter what accounting software you use to process your payroll you should be able to set it up to handle multiple rates of pay and fringe benefit rates.

    The key is to set up your payroll requirements early and accurately.

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