Prevailing Wages in Massachusetts: Rules for Payment on Public Projects

Many states have prevailing wage laws for construction projects (32 to be exact), and Massachusetts is one of them. Prevailing wage laws ensure that the workers on public jobs are paid roughly the same as those performing similar work in the same geographical area. Let's take a look at the rules for prevailing wages in Massachusetts.

Prevailing wages in Massachusetts: Who's in charge?

In Massachusetts, the Department of Labor Standards (DLS) is the body in charge of the determination of wage schedules and issuing prevailing wage sheets. As far as enforcement, the Attorney General’s Office is the one to contact if you feel your contractor isn’t paying you proper wages. Specifically, the Fair Labor Division of the Attorney General's Office.

What jobs must pay prevailing wage in Massachusetts

In Massachusetts, prevailing wages are paid on any state or locally funded project over $1,000. This includes projects for school districts, universities, local government, etc. Rates are provided by the awarding authority and should be included in the project bid documents and contract.

The wage rates are determined on a per-project basis and apply for the duration of the project, except for multi-year projects, where new wage rates are sent out each year.

Additionally, prevailing wage laws in Massachusetts also apply to hauling. The law states that a “truck or any automotive or other vehicle or equipment that is to be engaged in public works” are required to be paid prevailing wages.

Private companies often work on public projects

Keep in mind: Private companies often work on "public projects" under contract with federal, state, county, or municipal governments. Much like a private project where a contractor is hired by a property owner, a contractor on a public project is hired by a public entity to perform work.

These contractors hire subcontractors and suppliers to carry out the project, and while these are may be private companies, the prevailing wage laws apply to them, too, since they're working on a public project.

So even if your company is private, if you're working on a state or locally funded project in MA over $1,000, that project is subject to prevailing wages.

The MA prevailing wages sheet

Before a public project can begin to solicit bids, the public entity must first solicit a prevailing wages sheet from the DLS. Each sheet applies only to the project for which it was issued. The rates are effective for 90 days. If a bid hasn’t been accepted within that time period, the authority must obtain a new, updated sheet.

After a prevailing wages sheet is obtained, the wage schedule is then set for the duration of the contract. If the project is a multi-year contract, the authority must update the wage schedule each year. The schedule must be posted in a conspicuous place at the worksite for the entirety of the contract.

Prevailing wage rates

Prevailing wage rates are issued by-project by the authorized state or local authority and are to be paid for the life of the project, except for multi-year projects. Multi-year projects require updated wage rates on the anniversary of the contract. These updated rates are provided by the awarding authority.

Wage rates must be posted on-site where all employees have access to them. Here are some sample rates for workers in Boston (accessed February 16, 2022):

Who is subject to prevailing wage rates?

In Massachusetts, all workers who provide labor on a state-funded construction project over $1,000 are considered employees and are subject to prevailing wage rates. This includes owner-operators and company officers.

In addition, all employees working on projects over $10,000 must have proof of completing 10 hours of OSHA training. Proof of training must be submitted with the first certified payroll report an employee shows up on. There are many companies that provide web-based OSHA-compliant training for a reasonable cost.

Financing higher wages

Prevailing wage rates can be double or more than what you pay your employees on private projects. This means you need to increase your estimated costs for labor to ensure you have enough in the estimate to cover the higher wages.

Since it can take up to 83 days or more for contractors and subcontractors to get paid, you also need to monitor your cash flow to ensure that you can pay your employees for the work they’ve done. To ensure that you have the funds you need to meet payroll, you may need to delay payment to material suppliers or seek other funding sources.

Both materials financing and mobilization financing offer you additional time to pay your upfront project bills, so you have the cash to pay your employees.

Overtime

Workers who work more than 40 hours in a workweek are to be paid 1 ½ times the base rate plus fringe benefits for every overtime hour worked.

Massachusetts certified payroll reports

Contractors and subcontractors working on prevailing wage projects are required to submit weekly certified payroll reports with a statement of compliance to the awarding authority on the project.

The certified payroll report provides information on:

• Employees that worked during the week
• How many hours they worked
• How much they were paid
• Any deductions that were taken from employees' pay

The statement of compliance certifies that the contractor has paid the correct wage rates and benefits to their employees on the project and that they have followed the requirements of prevailing wage law in Massachusetts.

How to submit certified payroll reports

All contractors and subcontractors are to submit weekly certified payroll reports and statements of compliance by mail or email to the contracting authority for the project. Reports are reviewed by the authority to ensure that the correct wages have been paid.

Penalties

If a contractor is found to have willfully violated the prevailing wage requirements, for their first offense they may be subject to fines up to $25,000 and/or imprisonment for not more than one year. Subsequent offenses may garner fines up to $50,000 and/or imprisonment of not more than two years. Contractors may also be barred from participating in public works projects for up to five years for willful offenses.

If a contractor is found to have not willfully violated the prevailing wage requirements, for the first offense they may be subject to fines up to $10,000 or imprisonment for not more than six months. Subsequent offenses may lead to fines of up to $25,000 or up to one year in prison, or both.

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