Department of Workforce Development

April 18, 1996

Prevailing wage program updated

Working together cooperatively, labor and management helped state government make
the state's prevailing wage laws easier to enforce, more helpful for workers, and more
flexible for employers.

Gov. Tommy G. Thompson signed into law new prevailing wage legislation April 16 in Eau
Claire. The signing represented the first comprehensive update of the program in over 60
years.

"These changes are good for taxpayers, employers and working people," said Carol
Skornicka, Wis. Secretary of Industry, Labor and Human Relations. "It could not have
happened without the positive working relationship of all concerned. That's how we get
things done in Wisconsin when no one else can."

Prevailing wage rate laws require that employees working on government construction
projects - roads, schools, and jails - be paid no less than wages paid to workers on similar
private sector projects in that labor market. Thirty-two states and the federal government
have such laws. Anywhere from $2.5 billion to $3 billion is spent annually in Wisconsin on
government public works projects.

The Department put to use the cooperative labor-management model (used successfully by
such programs as worker's compensation) to avoid the strife experienced in other states
over this issue and to produce a program that has the active support of all interests.

Legislative passage of the revised prevailing wage laws followed a two-year review in
which seven focus groups were conducted involving organized labor, builders and
contractors, and local municipalities.

State Sen. David Zien, R-Eau Claire, thanked the Wis. Department of Industry, Labor and
Human Relations for "working closely with labor, management and the Legislature to
develop a more workable law that will protect workers while reducing red tape."

State Rep. Daniel Vrakas, R-Hartland, noted that it was the first time the laws had been
comprehensively reviewed since their passage in 1931-33. Zien and Vrakas chair their
respective labor committees.

Overtime: The old laws required overtime after eight hours of work each day and after 40
hours in any seven-day period. The new laws allow up to four 10-hour days of work
Monday through Friday without overtime; overtime would be paid for anything over 40
hours a week, on Saturday, Sunday and six holidays.Thresholds: The old laws required
prevailing wages be paid on any project involving a single building trade costing over
$11,000 and multiple trade projects over $110,000. The new single-trade threshold is
$30,000 and the multiple-trade threshold is $150,000. (A project is considered a single
trade if at least 85 percent of the project's cost is attributable to a single trade.) The new
laws also:

• Set more accurate prevailing wage rates by establishing them annually, by county, rather than project by project.
• Establish a modified weighted average calculation when a majority wage rate cannot be established.
• Can require municipalities and state agencies to withhold a portion of an employer's final payment when wage claims are outstanding.
• Standardize penalties for non-compliance ($200 in fines and six months in jail).
• Applicable prevailing wage rates will be written into project proposals, specifications, and most contracts.

For more information, contact Gary Shealy, construction wage standards section chief,
608/266-3193.