Mistakes in prevailing wage calculations causing state to overpay
CARSON CITY – Errors in calculating the ”prevailing wage” for state and local public works projects may be costing Nevada taxpayers millions of dollars this year, the Las Vegas Review-Journal reported Friday.
Some prevailing wage rates published by the Nevada State Labor Commission are more than $13 an hour higher than can be justified by survey data on which the wages are supposed to be based, the Review-Journal said in a copyrighted story.
State law dictates that the published prevailing wage rate, or higher, must be paid to all construction workers on all public works projects in the state. Nevada State Labor Commissioner Terry Johnson said he will continue to enforce the prevailing wage law despite apparent errors.
”We don’t have a position as to whether prevailing wages should be enforced,” he said. ”The Legislature has provided for the enforcement.”
He was unable to explain why the published prevailing wage rates can’t be justified by his agency’s data.
”If you are asking if I knowingly published false information, the answer is no,” Johnson said.
He published the rates in October as required by law, but told the Review-Journal that most of the process of setting them had already been completed by the commission interim staff before he was appointed in August. Johnson replaced David Dahn, who resigned in 1998.
Johnson added that he is revising procedures to assure more accurate rates in the future.
Nevada’s law, covering all public agencies in the state, says the prevailing wages must be based on a formula applied to data gathered in an annual survey of wages in each of Nevada’s counties.
The Review-Journal requested a copy of the database used to calculate the prevailing wages and ran the same calculations the Labor Commission is supposed to perform. In Clark County rates alone, the Review-Journal found 36 instances of published prevailing wages that differed from those the formula should produce.
A few of the announced wages were a little lower than the formula would produce but most were higher.
To be deemed a ”prevailing” wage, the wage, including fringe benefits, is supposed to be paid to at least 30 percent of workers listed in the survey.
But in some cases, not even one hour of reported wages and benefits was as high as the rate later announced to ”prevail.”
One of those cases was that of elevator constructors. The labor commission announced a prevailing wage of $51.17, even though the overwhelming majority of hours were paid at $38, $13.17 less. The highest wage reported was $45.46.
The prevailing wage for plumber foremen was set at $43.61, yet the highest wage reported for any plumber-foreman was $40.86.
The prevailing wage published for hod carriers was $27.63, yet the highest wage reported on the survey was $23.65.
In a few instances the errors went against the employees. Errors in that direction may be less significant, however, because prevailing wages are minimums, not maximums.
The prevailing wage announced for electric sign workers is $25.56, almost $14 less than the most common wage reported on the survey and the one that should have prevailed had the rules been followed.
Highway stripers will get paid at least $18.46 on public jobs, although that is $3.54 less than the wage they should get according to the formula.
Contractors and labor organizations have 30 days after prevailing wages are announced to protest any wage, but only one Clark County contractor objected to the wages announced for this year.
Fence contractor Jelindo Tiberti protested the wage of $37.12 an hour announced for workers who build chain-link fences, noting the wage represented an increase of some $10 over the $26.44 contractors were required to pay in the previous 12 months. He won a reduction to $18.17.