A few weeks ago I got to toot our horn about the J.D. Donovan case, whereby the Minnesota Supreme Court held that transportation of supplies to non-work sites is not “work under the contract” pursuant to Minn. R. 5200.1106, and thus not subject to the Minnesota Prevailing Wage Act (MnPWA), Minn. Stat. 177.41-.44. Unfortunately, it took the Minnesota Supreme Court to determine whether the MnPWA applied to a Minnesota Department of Transportation project – overruling the Minnesota Court of Appeals. If those learned judges were unable to determine properly whether work was covered, what about the rest of us?! Unfortunately, the MnPWA and related rules are not as clear as they could be, leading up to cases such as J.D. Donovan v. Minnesota Department of Transportation.
Generally, the prevailing wage is the hourly rate plus fringe benefits, required by law to be paid for each trade or occupation while performing work on qualifying federal, state, or local municipality-funded construction projects. The federal Davis-Bacon Act (DBA) and each state (often called “Little Davis-Bacon Acts”) may (and often do) define “prevailing wage” and “covered work” differently. Thus, even if you are not a Minnesota contractor – if you are doing work in Minnesota, you should take care to understand the MnPWA and how it differs from either the DBA or your usual state prevailing wage statue.
What is the Minnesota Prevailing Wage?
Under the MnPWA, the prevailing wage is the hourly basic rate of pay plus the employer’s contribution/cost for fringe benefits (medical or hospital care, pensions on retirement or death, life insurance, disability and sickness insurance, or accident insurance, for vacation and holiday pay, for defraying the costs of apprenticeship or other similar programs, or for other bona fide fringe benefits—but only where the contractor or subcontractor is not required by other federal, state, or local law to provide any of those benefits). Whether something is a “fringe benefit” is another big issue – one for another post. The prevailing wage rates for a project should be listed on the determination included with the bidding documents. What if the bidding documents are missing the rates, or you want to verify? The current commercial wage rates can be found here. The highway/heavy prevailing wage rates may be found here. Unlike some other state prevailing wage acts, Minnesota’s prevailing wage rates do not change throughout the project (with some extremely limited exceptions such as a correction).
When Does the MnPWA Apply to a Project?
The MnPWA applies to “laborers, workers and mechanics” that erect, construct, remodel, or repair public buildings or other public works, financed in whole or part by state funds.
Continue Reading When Does the Minnesota Prevailing Wage Act Apply to a Project?