Commercial Labor Rates

[Greg1707]

My bid for replacing 20 light fixtures was accepted. Later I received a purchase order from the GC.

The purchase order requested the usual information about license and insurance. In addition, there is a request for labor rates: foreman, journeyman and apprentice.

What's up with this? I am a very small contractor. I do not have foremen, journeyman and apprentices.

Should I just provide the prevailing wage for my area?

 

[Fulthrotl]

My bid for replacing 20 light fixtures was accepted. Later I received a purchase order from the GC.

The purchase order requested the usual information about license and insurance. In addition, there is a request for labor rates: foreman, journeyman and apprentice.

What's up with this? I am a very small contractor. I do not have foremen, journeyman and apprentices.

Should I just provide the prevailing wage for my area?

Foreman: $0
Journeyman: $0
Apprentice: 0

when you have those classifications employed, you
can update them with the rates you establish.

 

[kwired]

Who is the owner or financial provider of the project? If government entity, prevailing wage laws may require reporting of such wages. If you have no employees, there is nothing for you to have to comply with, not sure what to report, N/A on any forms provided likely works.

 

[ksmith846]

My bid for replacing 20 light fixtures was accepted. Later I received a purchase order from the GC.

The purchase order requested the usual information about license and insurance. In addition, there is a request for labor rates: foreman, journeyman and apprentice.

What's up with this? I am a very small contractor. I do not have foremen, journeyman and apprentices.

Should I just provide the prevailing wage for my area?

Locally I have found that some of the GCs we work for require us to provide those labor prices to be prepared when they get a change order for any possible added work. So they can avoid any issues by not knowing what you plan to charge in that situation. I simply fill in $100 per hour for each line item which is what I expect to charge for any added work labor hour, regardless of their classification.

I have found that if I fill in more accurate amounts per classification, they want to bicker about which classification of employee actually did the work.

 

[Chamuit]

Locally I have found that some of the GCs we work for require us to provide those labor prices to be prepared when they get a change order for any possible added work. So they can avoid any issues by not knowing what you plan to charge in that situation. I simply fill in $100 per hour for each line item which is what I expect to charge for any added work labor hour, regardless of their classification.I have found that if I fill in more accurate amounts per classification, they want to bicker about which classification of employee actually did the work.

(That's what I've had to do, as well. It's for the extras/changes.) The last one I did (that required this), I put in the same rate for everything. Although I was higher on the "base" hourly rate by $5/hr, with zero differentiation between employee classification and task I got the project.

 

[brantmacga]

It's for change-orders. I would leave it blank for now and see if anything is said. I've only had this requested a handful of times, and I've never given a rate nor been questioned on it. If they do want a rate, I'd go with the previous advice and put $100/hr or something like that. Just tell them it's your average rate and that's the number you use when figuring the costs.


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[petersonra]

If you read the contract that you are about to sign it probably has a blurb in it about how change orders are figured. My guess is they are asking for this because this is part of how change orders are figured. You will probably get time and material plus some small amount of overhead perhaps 15%.

 

[Strathead]

Leaving it blank as suggested is an option, but I usually explain that we use an aggregate rate of XXX per hour. Let them argue that out.

 

[kwired]

I'd write in there that change orders will be based on how much money we have already lost on the main contract

 

[tadavidson]

I charge same rate for Electrician, Journeyman and apprentice if they are all doing the same work. If the apprentice is simply moving ladders and such I give a break on rate for this work. But as for filling in those numbers. I would have all the same.

 

[Ponchik]

Why does the customer need to know my labor rate. I charge by the job not by the hour. If there is a change order submit a bid for the additional work.

IMO, If you share the hourly rate then you are asking for trouble. Why is it taking you so long? why are you taking a break, why are you on the phone, why are you paying your helper $$$ he should be making $ only....

You see where I am going with this?

 

[kwired]

I charge same rate for Electrician, Journeyman and apprentice if they are all doing the same work. If the apprentice is simply moving ladders and such I give a break on rate for this work. But as for filling in those numbers. I would have all the same.

Apprentice is supposed to be learning, this may mean some extra attention coming from the journeyman - sort of evens out to some degree anyway.

Why does the customer need to know my labor rate. I charge by the job not by the hour. If there is a change order submit a bid for the additional work.

IMO, If you share the hourly rate then you are asking for trouble. Why is it taking you so long? why are you taking a break, why are you on the phone, why are you paying your helper $$$ he should be making $ only....

You see where I am going with this?

Absolutely, you bid the job, shouldn't matter how long it takes other then that you meet any deadlines. If there are change orders, you submit them and the owner and/or GC need to approve them before they are an addition to the contract, and again you gave them a cost and they approved it, who cares how many man hours it may take outside of meeting any deadlines.

 

[Strathead]

Why does the customer need to know my labor rate. I charge by the job not by the hour. If there is a change order submit a bid for the additional work.

IMO, If you share the hourly rate then you are asking for trouble. Why is it taking you so long? why are you taking a break, why are you on the phone, why are you paying your helper $$$ he should be making $ only....

You see where I am going with this?

I may be wrong but my assumption was the question was asked to determine prior to change orders, the rates that would be used as a basis for change orders. This is quite common in my experience. And it is often better to get that out on the table early then if there are any discussions (arguments) about it they can be had without necessary work hanging over your heads.

 

[kwired]

I may be wrong but my assumption was the question was asked to determine prior to change orders, the rates that would be used as a basis for change orders. This is quite common in my experience. And it is often better to get that out on the table early then if there are any discussions (arguments) about it they can be had without necessary work hanging over your heads.

Knowing those labor rates means what? You still don't know how many hours will be figured into any particular change until it is submitted. Final change order amount is all that should really matter, just like the initial bid worked out.

If someone wants to make a change and then does a double take when they see the cost of the change order - don't you have a talk before accepting the change order amount?

$100 an hour for five hours is still same to the guy writing the check as $500 an hour for one hour, if you get the same result either way.

 

[brantmacga]

Knowing those labor rates means what? You still don't know how many hours will be figured into any particular change until it is submitted. Final change order amount is all that should really matter, just like the initial bid worked out.

If someone wants to make a change and then does a double take when they see the cost of the change order - don't you have a talk before accepting the change order amount?

$100 an hour for five hours is still same to the guy writing the check as $500 an hour for one hour, if you get the same result either way.

Whenever I've received this request in a contract, it comes from the customers PM, not the GC. They can check your number against labor units and material costs. I fully understand why they do it, and I don't disagree. Not all contractors are honest.


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[petersonra]

Whenever I've received this request in a contract, it comes from the customers PM, not the GC. They can check your number against labor units and material costs. I fully understand why they do it, and I don't disagree. Not all contractors are honest.


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it is not even about honesty. just knowing what you plan to charge them for labor on change orders up front. nothing wrong with that.

 

[Strathead]

Knowing those labor rates means what? You still don't know how many hours will be figured into any particular change until it is submitted. Final change order amount is all that should really matter, just like the initial bid worked out.

If someone wants to make a change and then does a double take when they see the cost of the change order - don't you have a talk before accepting the change order amount?

$100 an hour for five hours is still same to the guy writing the check as $500 an hour for one hour, if you get the same result either way.

So many of our repeat customers expect a breakout of labor, material, markup etc. as justification for change orders, that I automatically take them off that way and provide the report with the change order. I don't let them dispute the cost. It is laid right out in front of them. The only dispute they have is, if I made a mistake and put in too many fixtures, for example.

 

[Strathead]

it is not even about honesty. just knowing what you plan to charge them for labor on change orders up front. nothing wrong with that.

My thoughts are the same. Since I use and aggregate rate, occasionally someone will ask why I charge the same for a foreman as a laborer. I explain that I don't charge for the foreman's truck, or paper printing, or my warehouseman ordering and delivering material or any of a dozen other hard to quantify items, and when I use a lower skilled person then I must have more supervision. It gets it out of the way before there is a dispute.