Prevailing Wage Laws: Fire Departments' Obligations And Exemptions

Firefighters, paramedics, emergency medical technicians, rescue workers, and ambulance personnel are all considered fire protection personnel. Prevailing wage laws, such as the Davis-Bacon Act and the Service Contract Act, require contractors and subcontractors on federally funded or assisted construction and service contracts to pay locally prevailing wages and benefits. These laws ensure that government-funded projects do not undercut local wage standards. While prevailing wage laws vary across states and cities, they generally apply to public works projects and set compensation rates for government-funded work. Fire protection personnel employed by state and local governments are covered by the Fair Labor Standards Act (FLSA), which mandates a minimum wage of $7.25 per hour and overtime pay for hours worked beyond a standard workweek. Understanding the specific prevailing wage laws relevant to fire departments requires examining the regulations in the respective state and municipality.

Fire protection personnel and the Fair Labor Standards Act (FLSA)

Fire protection personnel include firefighters, paramedics, emergency medical technicians, rescue workers, ambulance personnel, and hazardous materials workers. These personnel are covered by the Fair Labor Standards Act (FLSA) if they meet the following criteria:

• Are trained in fire suppression
• Have the legal authority and responsibility to engage in fire suppression
• Are employed by a fire department of a municipality, county, fire district, or state
• Are engaged in the prevention, control, and extinguishment of fires or response to emergency situations where life, property, or the environment is at risk

The FLSA establishes minimum wage, overtime pay, record-keeping, and youth employment standards for fire protection personnel. Covered non-exempt workers are entitled to a minimum wage of $7.25 per hour, effective July 24, 2009. Overtime pay at a rate of not less than one and a half times the regular rate of pay is required after 40 hours of work in a workweek. There is no limit on the amount of non-exempt work that an employee employed in fire protection activities may perform.

Section 7(k) of the FLSA provides that employees engaged in fire protection may be paid overtime on a "work period" basis, which can range from 7 to 28 consecutive days. For example, fire protection personnel are due overtime after 106 hours worked during a 14-day work period.

Additionally, under certain conditions, a state or local government agency may give compensatory time in lieu of cash overtime compensation. Employees engaged in fire protection work may accrue up to 480 hours of compensatory time.

Prevailing wage rates and their determination

Prevailing wage rates are determined by the Department of Labor (DOL) and are based on the rates of pay and benefits that employers with government contracts or foreign workers are obligated to provide to their employees. Prevailing wage rates are typically based on rates specified in collective bargaining agreements and are meant to ensure that workers on government-funded projects are paid fairly. The rates are usually determined by surveying local employers in the same type of work and geographic area to find the average wage and benefit rate for specific occupations.

In the United States, the Davis-Bacon Act is a federal law that mandates contractors and subcontractors working on federally funded or assisted contracts worth more than $2,000 to pay their laborers and mechanics no less than the prevailing wages and benefits for similar projects in the area.

The prevailing wage rate is defined as the average wage paid to similarly employed workers in a specific occupation and location. Employers can obtain this wage rate by submitting a request to the National Prevailing Wage Center (NPWC) or by accessing other legitimate sources of information such as the OFLC Wage Search.

The requirement to pay prevailing wages as a minimum is common in most employment-based visa programs involving the Department of Labor. Additionally, programs such as H-1B, H-1B1, and E-3 require employers to pay the prevailing wage or the actual wage paid to workers with similar skills and qualifications, whichever is higher.

The Department of Labor, Bureau of Labor Statistics (BLS) has provided wage data collected under the Occupational Employment and Wage Statistics (OEWS) program for use in the Foreign Labor Certification process. The wage data is available on the Foreign Labor Application Gateway (FLAG) website.

To request a prevailing wage determination (PWD) for a Nonagricultural Immigration Program, employers must complete Form ETA-9141 and submit it to the NPWC. Electronic filing using the FLAG System is recommended.

Compliance with the Inflation Reduction Act

The Inflation Reduction Act (IRA) was signed into law by President Biden on August 16, 2022. The Act offers enhanced tax benefits for a range of clean energy projects, with the aim of improving job quality in clean energy industries and incentivizing the expansion of workforce training pathways.

To comply with the IRA's prevailing wage provisions, taxpayers must ensure that all laborers and mechanics are paid the applicable prevailing wage, including fringe benefits, for all hours spent on construction, alteration, or repair of a qualified facility. The prevailing wage is determined by the Secretary of Labor and is the combination of the basic hourly wage rate and any fringe benefits rate for a specific classification of laborer or mechanic in the area where the work is performed.

The prevailing wage and apprenticeship provisions of the IRA apply to various tax credits, including the Alternative Fuel Refueling Property Credit, Production Tax Credit, Credit for Carbon Oxide Sequestration, and the Clean Fuel Production Credit.

To ensure compliance with the prevailing wage provisions, taxpayers must maintain records that establish that they, as well as their contractors and subcontractors, paid wages that are not less than the prevailing wage rates. These records may include documentation identifying the applicable wage determination, the laborers and mechanics who performed the work, their classifications, hours worked, and the wage rates paid.

In addition to complying with the prevailing wage provisions, taxpayers, contractors, and subcontractors must also continue to adhere to all applicable local, state, and federal laws, including the Fair Labor Standards Act (FLSA) and state minimum wage or prevailing wage laws.

The IRA's prevailing wage requirements generally apply to qualifying facilities where construction begins 60 days or more after the U.S. Department of the Treasury and the Internal Revenue Service (IRS) publish guidance on those requirements. The IRS has provided guidance and resources to help taxpayers understand and comply with the prevailing wage and apprenticeship requirements of the IRA.

Davis-Bacon and Related Acts (DBRA)

The Davis-Bacon and Related Acts (DBRA) are administered by the Wage and Hour Division of the U.S. Department of Labor. DBRA applies to contractors and subcontractors performing work on federally funded or assisted contracts valued above $2,000. This includes work such as construction, alteration, repair, painting, and decorating of public buildings or public works.

A "wage determination" is a listing of the prevailing wage rates and fringe benefits for each type of labour in a given area. The Wage and Hour Division issues two types of wage determinations: general and project determinations. General wage determinations reflect the rates for a specific geographic area and type of construction, while project wage determinations are issued at the request of a contracting agency for a specific project.

There are record-keeping, reporting, notice, and posting requirements for DBRA. Non-compliance can result in penalties such as contract termination, debarment from future contracts, withholding of contract payments, and civil or criminal prosecution.

DBRA ensures that workers on federally funded construction projects receive prevailing wages and benefits, which can include both hourly rates and fringe benefits. This helps to support good wages and benefits for workers, close racial pay gaps, promote quality work, and provide value for taxpayers.

Prevailing wage and apprenticeship requirements

The prevailing wage is the basic hourly rate of wages and benefits paid to similarly employed workers in a given geography. Prevailing wage laws ensure that government-funded projects do not undercut local wage and benefit standards.

In the United States, the Davis-Bacon and Related Acts (DBRA) require contractors and subcontractors on federally funded or assisted construction and service contracts to pay locally prevailing wages and benefits. The DBRA applies to contracts exceeding $2,000 for construction, alteration, or repair. The prevailing wage rates are usually based on rates specified in collective bargaining agreements.

The DBRA requires contractors to pay laborers and mechanics employed on the project job site no less than the prevailing wage rates, including fringe benefits, listed in the contract's Davis-Bacon wage determination for corresponding classes of laborers and mechanics. The rates are determined by the Wage and Hour Division (WHD) based on wages and benefits found to be prevailing for laborers and mechanics employed on similar projects in the area.

Apprentices may be employed at less than the prevailing wage rates if they are individually registered and employed pursuant to an apprenticeship program registered with the Department of Labor or a state apprenticeship agency recognized by the Department. Contractors on DBRA projects are required to pay laborers and mechanics weekly and submit weekly certified payroll records to the contracting agency.

In addition to the DBRA, some U.S. states and cities have their own prevailing wage laws. For example, California's Department of Industrial Relations recognizes the importance of communicating effectively with individuals, including those with limited English proficiency, and provides translation services.

To promote clean energy solutions, the Inflation Reduction Act (IRA) offers enhanced tax benefits for clean energy projects that meet prevailing wage and apprenticeship requirements. Taxpayers can increase the base amounts of many clean energy tax incentives by five times by ensuring laborers and mechanics are paid no less than applicable prevailing wage rates and by employing apprentices from registered apprenticeship programs for a certain number of hours.

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