Public WorksQuestion 491 of 1632

A general contractor on a public works job pays a laborer the basic hourly rate in cash but provides NO health, pension, or training contributions. To comply with the prevailing wage determination, the contractor must:

a.Ignore the fringe part, since the cash base rate is paid
b.Pay the fringe amounts in a lump sum at job's end
c.Report the worker as exempt from the prevailing wage
d.Pay the required fringe values to the worker as wages

Explanation

Under Labor Code §1773.1 the prevailing wage is one package: the basic hourly rate plus employer payments for benefits. An employer that makes no qualifying contributions must pay the dollar value of those benefits to the worker as additional cash wages, so the total meets the determination. Ignoring the fringe portion underpays every hour and is a §1775 violation. Deferring it to the end of the job fails because the obligation attaches to each pay period, not to project closeout. And there is no exemption to report: coverage follows the classification and the work performed.

Law Reference: Labor Code §1773.1(d); §1773.1(a)

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