Workforce West Virginia submits new prevailing wage rules

Calculation of prevailing wage rates will be simpler, more streamlined, and its designers hope, more accurate — under new rules submitted Monday by WorkForce West Virginia.

Under legislation passed this session revamping the way workers’ wages are to be calculated for state-funded public works projects (SB361), Monday was the deadline for WorkForce West Virginia, in conjunction with the Bureau of Business and Economic Research at West Virginia University and the Center for Business and Economic Research at Marshall, to come up with new methodology for calculating prevailing wages.

“I’m very comfortable with it,” Jeff Green, director of Research, Information and Analysis for WorkForce West Virginia, said Monday of the new system.

“It’s a complex issue,” he added. “You want to make sure you give it the best and most accurate information you can.”

Under the new law, oversight of calculation of prevailing wage scales was moved from the state Division of Labor to WorkForce West Virginia.

Critics complained that under the old system, the Division of Labor used an imprecise methodology of surveys sent to contractors and public entities, requiring that they self-report wages paid for various types of construction work by county.

Workforce West Virginia’s new system also will rely to a great extent on surveys that will be sent to some 5,250 contractors and subcontractors doing business in the state. However, WorkForce West Virginia officials expect a higher response rate and more accuracy, noting that the agency is “fully staffed with professionally trained research personnel who have extensive expertise and experience with labor market data collection and analysis.”

The process will also be streamlined — Prevailing wage rates will be calculated using the agency’s seven WorkForce Investment Area regions, rather than using county-by-county calculations.“

Many counties have limited occupational wage data, making it difficult to produce statistically reliable estimates,” the summary of the new methodology states.

The new methodology also streamlines the number of occupational categories on the surveys from 48 to 28 to make the reporting more user-friendly, asking firms for example, to “report wages for laborers broadly, as opposed to different individual classes of laborers.”

Although the original bill called for an outright repeal of the prevailing wage law, the compromise legislation retains prevailing wage for state-funded construction projects of more than $500,000, using the new calculation.

Under the law, the initial deadline for setting the new prevailing wage rates is July 1, but the law gives the legislative Joint Committee on Government and Finance authority to extend that deadline to as late as Sept. 30.

In the report, WorkForce West Virginia indicates it can meet a fall deadline for the new wage rates, noting, “WorkForce West Virginia anticipates that data collection will be complete by the end of summer 2015 with publication of revised prevailing hourly wage rates expected by early fall 2015.”

Passed during the Great Depression and modeled after the federal Davis Bacon Act, prevailing wage was designed to keep contractors from underbidding public works contracts by using low-paid, less-experienced and well-trained workers.

Critics contended that prevailing wage inflates costs for publicly financed construction projects, while proponents cited figures showing that prevailing wage projects are not more expensive, and that it is cost effective to hire highly skilled workers who have high productivity.