2012 - 4th Quarter

Policy and the Prevailing Wage

By Butch Garrett, Prevailing Wage Coordinator

Issues relating to prevailing wage permeate the public works construction industry on a national basis.  The University of Missouri is no exception.  University policy states that, “The prevailing wages in the community where construction takes place shall be required to be paid on all construction projects for construction work” (70.060 of the Collected Rules and Regulations).  Butch Garrett is the Prevailing Wage Coordinator with Facilities Planning and Development and is responsible for policy enforcement throughout the UM System.  This article provides a brief historical perspective on prevailing wage, illuminates the university’s policy as well as the role of the coordinator at the university.

The prevailing wage is the wage rate predominately paid for a particular construction job in each county in Missouri.  Currently, the Missouri Division of Labor Standards determines the prevailing wage with wage data from projects done in the previous year. The nation’s first prevailing wage law was passed in Kansas in 1891.  The federal prevailing wage law, Davis-Bacon, was not passed until 1931.  Missouri established its prevailing wage law in 1957.  Some believe that prevailing wage increases the cost of construction; however, researchers at the Department of Economics, University of Missouri – Kansas City, reported findings to the contrary.  In The Adverse Economic Impact from Repeal of the Prevailing Wage Law in Missouri, Michael P. Kelsay, Ph.D., L. Randall Wray, Ph.D. and Kelly D. Pinkham, M.S., found that “There were no statistically significant differences in construction costs across thirteen different structure types in the Great Plains states as a result of a state having a prevailing wage statute for the period 1993-2002”.  One possible explanation is that although prevailing wage sets minimum labor rates; construction projects are still subject to fierce competition among bidding contractors on other factors such as productivity.

The Prevailing Wage Coordinator not only enforces the policy on each campus construction project; the policy also covers any construction work done by non-university personnel to any property the University owns or leases.  Similarly, the Prevailing Wage Coordinator conducts worker interviews on jobsites, reviews certified payroll reports, conducts audits of contractor payrolls and fringe contributions, reviews contractor apprenticeship standards, attends pre-bid and pre-construction conferences.  He also provides clarification of state and federal regulations, resolves conflicts and assists university construction management system wide.  The Prevailing Wage Coordinator adds value to the university by “obtaining maximum value for each UM construction dollar”.

Please contact Butch Garrett, Prevailing Wage Coordinator, with prevailing wage questions or compliance issues at garrettab@umsystem.edu or 573-884-7079.

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