Prevailing-wage changes baffle industry

Published: October 16, 2009
Tags: Associated Builders & Contractors of Wisconsin Inc., Janke General Contractors Inc., prevailing wage, Wisconsin Department of Workforce Development

Paul Snyder
paul.snyder@dailyreporter.com

Nonunion contractors working on prevailing-wage projects that continue into 2010 better be ready on Jan. 1 to start reporting their payrolls to the state.

The state Department of Workforce Development on Jan. 1 better be ready to deal with a confused and irritated construction industry, said John Mielke, vice president of the Associated Builders & Contractors of Wisconsin Inc.

“It’s a hassle to catch people in midproject,” he said. “It seems to me it’d be a heck of a lot easier to require reporting on projects awarded after Jan. 1.”

It does not matter if it would be easier because it would be against the law, said Julie Eckenwalder, chief of the DWD’s prevailing-wage section.

The state’s new prevailing-wage law takes effect Jan. 1 and will lower the threshold from $234,000 to $25,000 at which contractors must pay prevailing wages to employees working on state and local government public works projects. The state surveys contractors annually to find out what they pay workers on private projects. The state then uses the results to set the prevailing wage for each county.

The DWD will apply the new threshold only to projects bid or negotiated after Jan. 1, which is a small relief for Steven Janke, president of Athens-based Janke General Contractors Inc. Janke, whose company performs 90 percent of its work on municipal projects, is working on a Wisconsin Dells boat launch project estimated at $168,000 that is below the threshold now, but would be over after Jan. 1.

It’s only a small relief because Janke, starting Jan. 1, must comply with the state’s new monthly payroll reporting requirement for every prevailing-wage project. Nonunion contractors on those projects will be required to electronically submit to DWD a certified record of employees who worked on the project. DWD then is required to post the records on its Web site, and the records will include work on prevailing-wage projects begun this year.

The state previously had no reporting requirement.

“You’re going to see more overhead costs because it means more office work,” Janke said. “If you’ve got someone that now has to put these reports together, that’s more time taken out of other work they could be doing for other projects.”

The change might have been more palatable, he said, if the state had notified the industry the switch was on the way.

“If we’re not anticipating a change, that’s the worst part,” he said. “I heard of rumblings of prevailing-wage changes, but I haven’t heard anything from the state or local governments telling us to be prepared.”

Notifications and explanations of the prevailing-wage law changes are available on the DWD Web site, Eckenwalder said, and the change was approved in the 2009-11 state budget, which is available for anyone to see.

But Mielke said even with the DWD’s explanations and posted rules, the state has not cleared up the reporting confusion that almost certainly will plague the industry starting Jan. 1.

“Hopefully, they’re working on that,” he said. “I’m guessing they want to adopt an implementation plan that reduces confusion.”

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