Public Employee Press

Who is covered by the state prevailing rate law,
and what does it offer?

Prevailing rate of pay is a legal term that describes the wages paid to unionized employees who work on public projects in a given geographical area.

The term goes back to the federal Davis-Bacon Act of 1931, which requires contractors on federal construction projects to pay the prevailing rate to their workers.

The concept behind the law was that government contractors should not be used to depress the wages of workers and that bids should not be based on how little they could get away with paying.

In New York, Section 220 of the state Labor Law requires certain classes of public employees whose jobs are similar to workers in the private sector to be paid the prevailing rate for their work.

The law covers private sector employees who work for contractors on government projects and public employees who work directly for the government on public works projects.

Comptroller plays key role
In New York City, the Comptroller sets the rate for blue-collar titles covered by the law. These employees generally work eight hours a day, five days a week, with the right to overtime at time-and-a-half.

Prevailing rate New York City employees may accept the wage hikes won by their union in economic agreements, or their union local may file a labor law complaint and ask the Comptroller for a determination on the prevailing rate for their title.

For DC 37 members, this has often meant balancing the pros and cons of higher wages versus greater benefits. Over the years, they have generally opted to accept the economic agreement negotiated by DC 37.

But in recent years, the gap between DC 37 prevailing rate workers in certain titles and their private sector counterparts has grown large enough so that a number of DC 37 locals have decided to exercise their right to file a complaint seeking a Comptroller’s survey comparing their pay with private-sector workers.

City action required
Under Section 220, the city must adjust their pay if the survey shows that the wages and benefits do not match the private sector.

As a matter of routine, DC 37 files a complaint after concluding each economic agreement to keep open the locals’ survey option, according to Dennis Sullivan, director of the DC 37 Research and Negotiations Dept.

The survey process may drag on for years. First, an investigator surveys pay rates in the public and private sectors, and the Comptroller issues a report.

The union and the city both have the right to challenge the Comptroller’s report before a neutral judge at the Office of Administrative Trials and Hearings.

If the judge upholds the survey, the Comptroller then adopts the judge’s recommendation and issues a final determination, which the city may then challenge in court.

Throughout the process and even after the determination, the union and the city may try to reach a negotiated settlement.

Six of DC 37’s 56 local unions represent prevailing rate employees: Construction Laborers, Highway Repairers & Watershed Maintainers Local 376; Laborers Local 924; Motor Vehicle Operators Local 983; Prevailing Rate Employees Local 1087; Dept. of Transportation Supervisory Employees Local 1157 and Sewage Treatment Workers and Senior STWs Local 1320. Not all the jobs in these locals are covered by the prevailing-rate law.

Recently, the U.S. public received a lesson about the important role of the prevailing-rate rule in maintaining community living standards.

Protecting living standards
Last year, President Bush tried to suspend the Davis-Bacon Law on federally funded reconstruction projects after Hurricane Katrina.

But he was forced to retreat after unions led a fight-back campaign that won the support of even Republican politicians, who realized that the suspension would have let contractors undercut the local wages and hurt their constituents by causing a downward wage spiral.

— Gregory N. Heires