MDOT continues their focus on prevailing wage compliance. They have asked MITA to distribute the following information as a reminder about the payment of prevailing wages for the following types of employees:
Managerial and Professional Salaried Employees (i.e. Working Foreman)
The following excerpts were copied from the US Department of Labor (US DOL), Field Operations Handbook.
Salaried employees.
In many cases salaried employees perform work on DBRA covered projects and noncovered projects in the same w/w (workweek). To determine whether the employee has been properly paid for the time spent on the DBRA project, it is first necessary to determine the hourly rate of pay. For example, an employee who is working 40 hours per week and paid a salary of $600.00 per week would be paid at the rate of $15.00 per hour. If this same employee is entitled to a prevailing rate of $19.50 per hour for DBRA covered work, he or she would be entitled to an additional $4.50 per hour for work performed on the DBRA project. An employer may not arbitrarily allocate a greater portion of the employee’s salary to DBRA work in order to achieve compliance with the Act. It should be kept in mind that a nonexempt (i.e., 29 CFR Part 541) salaried employee is only due the applicable DBRA rate for those hours actually spent performing laborers’ and mechanics’ duties. (See 29 CFR § 5.2(m) and FOH 15e15(b).)
Managerial and professional employees.
- An individual employed in a bona fide executive, administrative, or professional capacity, as defined in 29 CFR Part 541, is not a laborer or mechanic for purposes of DBRA.
(The following section applies to all working supervisors including Foreman)
- A supervisory employee who is not exempt under 29 CFR Part 541 and who spends more than a substantial amount of time (20 percent) in a given w/w as a “laborer” or “mechanic” must be paid the applicable DBRA prevailing wage rate for the classification of work performed for all hours engaged in such work as a laborer or mechanic. For example, if a nonexempt working foreman spends 60 percent or 24 hours of a 40 hour w/w performing administrative functions such as preparing time cards, supervising the project work, and arranging for deliveries and the remaining 40 percent (16 hours) of the time performing the duties of an electrician, the individual must be paid the electrician’s prevailing wage rate for the 16 hours. (See 29 CFR § 5.2(m).)
- An employee who owns at least a bona fide 20-percent equity interest in the enterprise in which he or she is employed, regardless of the type of business organization (e.g., corporation, partnership, or other), and who is actively engaged in its management, is considered a bona fide exempt executive. The salary and salary basis requirements do not apply to the exemption of business owners under 29 C.F.R. § 541.101. An individual with a 20 percent or greater interest in a business who is required to work long hours, makes no management decisions, supervises no one and has no authority over personnel does not qualify for the executive exemption. To qualify for the exemption, a minority owner with at least a bona-fide 20 percent interest in the business must be an employee of the business and actively engaged in management. See 29 C.F.R. § 541.101.
If you have any questions or comments contact Glenn Bukoski at glennbukoski@mi-ita.com or Doug Needham at douglasneedham@mi-ita.com or call them at the MITA office at 517-347-8336.
