Tales from the Small Business Trenches: DOR’s Prevailing Wage Speed Trap

Prevailing wage laws are supposed to protect employees by guaranteeing that fair wages are paid to them by their employers. The Prevailing Wage for each category of worker is adjusted by county. This could be a long diatribe about how the system often doesn’t represent actual prevailing wages and how the law increases the cost of public construction, but instead let me tell you how DOR uses the Prevailing Wage law as a speed trap to collect more taxes.

DOR enforces Prevailing Wage laws by requiring contractors on public projects to file a Statement of Intent to Pay Prevailing Wages at the beginning of the project, and an Affidavit of Wages paid at the end of the project. From the DOR website:

“The agency administering the contract may not make any payments until contractors have submitted an Intent form that has been approved by the Industrial Statistician.”

Affidavits also must be approved by the Industrial Statistician. You can check out the FAQ’s here.

There is an exception, or what should be an exception. When a contractor on a public project is a self-employed worker and has no employees, Prevailing Wage requirements do not apply. No need to protect you from yourself, no need to file Statements and Affidavits and waste the Industrial Statistician’s time, right? Wrong.

Filing used to require carbonless paper forms in multiple copies. Self employed contractors didn’t have to file paperwork, the paperwork would have made more work for DOR and served no purpose.

However, once DOR had the filing system on line there was nothing to hold them back. This year every public agency we work for must have gotten a DOR memo, and we now must file a Statement of Intent to Pay Prevailing Wages at the beginning of the project (indicating not applicable), and an Affidavit of Wages paid at the end of the project (indicating not applicable). DOR collects $40 each time.

$80 here, $80 there, and pretty soon you’re talking real money for small businesses performing small contracts.


[featured photo credit: bredgur]



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