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How Do Employee Benefits Affect Prevailing Wage Requirements?

Posted by Jamison Mark on Sep 13, 2017 4:30:00 PM
New Jersey Attorneys

construction worker.jpgIf you work in construction, maintenance, or other building trades and services for public works in New Jersey, you have likely heard of the New Jersey Prevailing Wage Act (PWA). This law establishes prevailing wage levels for NJ workers engaged in these trades, which vary depending on a workers’ experience, specialty, and location.[1] Besides setting wage rates, however, the PWA also sets out rules for providing “fringe benefits” to New Jersey trades workers.

 

What Are “Fringe Benefits”?

The rates of pay in the current prevailing wage charts under the PWA are based on collective bargaining agreements (CBAs) established and negotiated by the workers’ unions for each particular craft or trade. Besides setting base pay rates, the PWA ensures that workers are appropriately compensated for overtime, weekend work, work performed on legal holidays, and shift differentials. The PWA encourages employers to provide certain fringe benefits, including medical coverage, dental coverage, pension or retirement plans, paid time off (vacation, holidays, sick days), and life insurance, by allowing them to take a credit against an employee’s wages for the cost of those benefits.

To calculate the amount of the credit, per hour, an employer is authorized to divide the annual cost of the benefits, per employee, by 2,000 hours; that amount should be disclosed on each employee’s Certified Payroll Form as "total fringe benefit cost / hr."

 

Employers that do not provide such fringe benefits must pay the entire appropriate fringe benefit amount directly to each employee in each paycheck; employers providing benefits worth less than the fringe benefit amount must pay the balance directly to the employee each payday.[2] For some positions, benefits are increased by the same factor as the wage rate when calculating overtime pay; for others, fringe benefits remain at the same hourly rate.[3]

 

What Are Not “Fringe Benefits”

Many employee benefits are not “fringe benefits” under the PWA, however, and may not be credited towards an employee’s prevailing wage (i.e., deducted from your hourly pay). These benefits include the use of company vehicles or cell phones, lodging reimbursement, and company-provided tools, uniforms, or safety gear. Under no circumstances may statutory deductions (unemployment insurance, income tax, etc.), workers' compensation insurance, or any portion of any fringe benefit that is deducted from the employee's pay be credited towards the prevailing wage.[4] If any of these types of benefits are being deducted from your hourly wages, contact a New Jersey employment lawyer immediately.

 

Duty to Post Prevailing Wage Rates & Benefits

How do you know what rates and benefits you are entitled to for a specific project? All contractors and subcontractors performing public work for a public body must post the prevailing wage rates for each craft and classification, including the effective date of any changes to the rate, in a prominent and easily accessible place at the site of the work or at such places that are used by employers to pay workers their wages. These rate charts also include the amount of fringe benefits to which each type of worker is entitled. If you cannot locate this posting for a specific project, you should contact the contracting public entity (e.g., Monmouth County School Board or Westfield City Council).

 

If you work on New Jersey public works projects, make sure you understand if the prevailing wage applies to you and, if so, what wage rates and benefits you are entitled to. Monitor your payroll records closely to ensure that you are being paid the correct amount and that any benefits deductions are calculated accurately. If you believe you’re not being paid appropriately, consult with an experienced New Jersey wage and hour attorney.

 

Contact the Mark Law Firm today for an appointment with one of our Basking Ridge, Newark, Oradell, Jersey City, or Union, NJ employment lawyers if you believe you have been the victim of wage theft, wage discrimination, retaliation, or other wage and hour improprieties.

 

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[1] N.J.S.A. 34:11-56.25 et seq.

[2] See Current Prevailing Wage Rates.” State of New Jersey Department of Labor and Workforce Development, n.d. Accessed 8 Aug 2017.

[3] Id.

[4]Public Works (Prevailing Wage) FAQs.” State of New Jersey Department of Labor and Workforce Development, n.d. Accessed 8 Aug 2017.

Topics: Wage & Hour, Employment Law