Ross M. Williamson
The core legal obligations related to the payment of prevailing wages on public works projects have not changed recently. Nonetheless, with construction season upon us, now is a good time to review the key prevailing wage requirements in order to keep on the good side of Oregon’s Bureau of Labor and Industries (BOLI).
Please note that prevailing wage is a complex area of the law. This article is necessarily a summary of the various obligations; there are exceptions and details not addressed in this general overview. In addition, federal Davis-Bacon requirements for federally-funded projects provide another layer of complexity that is not specifically addressed here. Please reach out with questions about specific projects.
As you prepare for and make your way through a public works project, your local government agency must contend with several obligations overseen by BOLI. The following are the key obligations that come up before, during, and after a public works project.
- As you finalize a budget for the following fiscal year, you should provide BOLI a list of the anticipated public improvements that you plan to undertake. Form WH-118 is used for this task and should be submitted to BOLI at least 30 days before adopting the budget. This form should also be revised as plans change throughout the fiscal year.
- Each contract for a public works project must include certain statutorily required terms. Leaving these terms out places the local government agency in jeopardy of BOLI enforcement actions. If certain terms are left out of the contract, the local government agency could be on the hook for any underpayment of prevailing wage rates. (Yikes!)
- Most often, the prevailing wage rates applicable throughout the entire contract are those in effect at the time the contract solicitation is advertised. It is important to note this date and reference the correct rates in the contract itself.
- Prior to awarding a public works contract, you should verify that the contractor and known subcontractors are not on BOLI’s list of ineligible contractors. BOLI maintains this list on its website. https://www.oregon.gov/boli/employers/Pages/pwr-ineligible-contractors.aspx
- For projects that require a payment bond (generally contracts over $100,000), you will need to make sure the contractor files the bond. If this step is missed, the contracting agency could be liable for underpayment of prevailing wages. (Yikes again!)
- For each public works project, the local government agency must pay a fee in the amount 0.1% of the contract price, with a minimum fee of $250 and a maximum fee of $7,500. Form WH-39 is used to calculate and pay the prevailing wage fee to BOLI.
- Within 30 days after awarding a public works contract, you must notify BOLI of the contract. This report is made on form WH-81. In addition, the filing made to BOLI should include a copy of the first-tier subcontractor disclosure form.
- You need to ensure that your contractor submits their certified payroll reports monthly. If a report is not submitted, the you should withhold 25% retainage from the contractor’s payment. Note that United States Department of Labor form WH-347 is not sufficient for meeting Oregon’s reporting requirement.
- If the price of the public works project changes during construction, a fee adjustment could be required. Use form WH-40 within 30 days of the final progress payment when costs increase or decrease by $100,000 or more.
In addition to the requirements summarized above, the following are contractor prevailing wage obligations. In order to keep a project moving forward smoothly, it is wise for you to understand these obligations and provide reminders to your contractors.
- With limited exceptions, all contractors and subcontractors required to pay prevailing wage on a public works project must file a public works bond with the Construction Contractors Board (CCB). This even applies to contractors not required to have a CCB license.
- Contracts with subcontractors should contain a prevailing wage requirement.
- The contractor and each subcontractor must post applicable prevailing wage rates at the project site.
- The contractor should ensure that they receive certified payroll reports from each of their subcontractors on the project and withhold 25% retainage if a subcontractor fails to file the report in a timely manner.
BOLI penalties for failing to comply with applicable prevailing wage laws can be substantial. Using the above as a checklist for each public works project will help you stay clear of BOLI enforcement actions.