
Prevailing Wage and Davis-Bacon Compliance in Minnesota
Components of Wage Determinations
Both state and federal wage determinations in Minnesota include:
- Basic Hourly Rate: The minimum amount that workers must receive for their job classification, excluding fringe benefits.
- Fringe Benefits: Non-cash benefits, such as health insurance, retirement plans, and vacation pay.
- Total Hourly Rate: The sum of the basic hourly rate and fringe benefits. For example, if the basic hourly wage is $30 and fringe benefits total $10, the hourly rate would be $40. The contractor must pay the full $40 if no fringe benefits are provided.
Compliance for Contractors and Subcontractors
To ensure compliance with prevailing wage laws in Minnesota, contractors and subcontractors must follow these guidelines:
Determine Applicable Wage Rates
Determine Applicable Wage Rates
Use the U.S. Department of Labor's Wage Determinations Online (WDOL) portal via SAM.gov for federal projects.
For state projects, the Minnesota DLI provides prevailing wage rates.
Submit Certified Payroll Reports
Submit Certified Payroll Reports
For federal projects, reports are typically submitted weekly using Form WH-347 from the U.S. Department of Labor.
Payroll reports must be submitted to the public awarding authority for state projects.
Handle Fringe Benefits
Handle Fringe Benefits
Post Wage Rates On-Site
Post Wage Rates On-Site
Maintain Accurate Records
Maintain Accurate Records
Penalties for Non-Compliance
Failure to comply with prevailing wage laws in Minnesota can result in:
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Fines
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Back pay for underpaid workers
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Disqualification from bidding on future public works projects
Unique Aspects of Minnesota's Prevailing Wage System
- No Local Workforce Preference: Unlike many states, Minnesota prohibits local government units from implementing preferential hiring policies for local residents on public works projects.
- Innovative Infrastructure Financing: Minnesota employs a unique municipal infrastructure bonding program that allows counties and cities to issue specialized infrastructure improvement bonds with more flexible repayment terms.
- Comprehensive Green Infrastructure Standards: Minnesota mandates stringent environmental sustainability requirements for public works projects, including mandatory stormwater management, energy efficiency metrics, and sustainable materials usage that exceed federal guidelines.
Relevant Resources
- U.S. Department of Labor: Wage Determinations Online (WDOL): SAM.gov - Wage Determinations
- Minnesota Department of Labor and Industry (DLI) - Prevailing Wage Information: Minnesota Prevailing Wage Information
- Certified Payroll Form WH-347: U.S. Department of Labor Certified Payroll Form
Minnesota Prevailing Wage FAQs
Does Minnesota have a state-specific prevailing wage law?
Yes, Minnesota has a state-specific prevailing wage law that applies to state-funded public works projects. The Minnesota Department of Labor and Industry (DLI) sets prevailing wage rates for different job classifications in the state. For federally funded projects, the Davis-Bacon Act applies.
How are prevailing wage rates determined in Minnesota?
For state-funded projects, the Minnesota Department of Labor and Industry (DLI) determines prevailing wage rates based on wage surveys and collective bargaining agreements in the local area. For federally funded projects, the U.S. Department of Labor determines prevailing wages through local wage surveys.
What are the penalties for non-compliance with prevailing wage laws in Minnesota?
Penalties for non-compliance with prevailing wage laws can be significant. Contractors may face fines for failing to adhere to wage requirements. Additionally, they may be required to provide back pay to workers who were underpaid. In cases of repeated violations, contractors risk debarment, disqualifying them from bidding on future public works projects.
How are fringe benefits handled under prevailing wage laws in Minnesota?
Fringe benefits are a required part of the total prevailing wage. Contractors can either provide fringe benefits such as health insurance, pension contributions, or paid leave, or they can pay the equivalent value in cash. If no fringe benefits are provided, the contractor must pay the full total wage (basic hourly rate + fringe benefits) as cash wages to the worker.