Does the union not have to pay prevailing wage scale?

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follybeacher

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Let's say there's a large multifamily stick-built project with a lot of labor hours...
...is there ever an scenario, or incentive by the union, where the union doesn't have to pay the prevailing wage scale or is somehow supplemented?
 
follybeacher said:
Let's say there's a large multifamily stick-built project with a lot of labor hours...
...is there ever an scenario, or incentive by the union, where the union doesn't have to pay the prevailing wage scale or is somehow supplemented?
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The IBEW has a stabalization fund. This allows their contractors to bid a job at a lower rate,to compete with non-union, and the union will top up the difference.
I think this is what the OP is asking
 
"In government contracting, a prevailing wage is defined as the hourly wage, usual benefits and overtime, paid to the majority of workers, laborers, and mechanics within a particular area. This is usually the union wage."

https://en.wikipedia.org/wiki/Prevailing_wage

Union contractors like prevailing wage jobs because the non-union companies have to compete on a level playing field.
 
Prevailing wage is a state and federal concept. It is what an employer (not the union) is obligated to pay when doing certain kinds of work, usually for projects funded by local, state, or federal agencies. The level of wage is determined by the "prevailing wage" in an area, and that is almost always taken as the union agreement in a geographic area. So, in NYC, the prevailing wage for electricians is likely a reflection of the union agreement for Local 3. Now, if a bunch of non-union shops in a trade got together and could show that they employed more workers than the union shops and that the average wage was x% lower than the union agreement, they might get that lower wage to be the "prevailing" wage. I am not aware of any instance where this has happened.
 
controlled said:
The IBEW has a stabalization fund. This allows their contractors to bid a job at a lower rate,to compete with non-union, and the union will top up the difference.
I think this is what the OP is asking
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Yes sir, I belive what you describe fits an observation I’m forming which is what prompted this thread. Would you mind elaborating to help me better understand?

Who’s funds are these? Is it a regional IBEW chapter or larger entity?

Do all union shops bidding the project get the advantage of these funds or is it more selective such as only specific signatory contractors?

What projects qualify for these funds? In other words is it projects where union is trying to lower their labor rate on a non-prevailing scale project, or can the fund be utilized on a prevailing project to generate an edge over their competition?
 
gadfly56 said:
Prevailing wage is a state and federal concept. It is what an employer (not the union) is obligated to pay when doing certain kinds of work, usually for projects funded by local, state, or federal agencies. The level of wage is determined by the "prevailing wage" in an area, and that is almost always taken as the union agreement in a geographic area. So, in NYC, the prevailing wage for electricians is likely a reflection of the union agreement for Local 3. Now, if a bunch of non-union shops in a trade got together and could show that they employed more workers than the union shops and that the average wage was x% lower than the union agreement, they might get that lower wage to be the "prevailing" wage. I am not aware of any instance where this has happened.
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............

True.
And in addition:

For a properly executed government project--there is a number of bidders that have to bid on certain project/s. This is a requirement to prevent collusion or fabricated , or ghost contractors that don’t even exist.
There is an exception to this mandate: If you are the only parts maker to make replacement parts to keep the Chinook Helicopters flying-- you’ve got it made. . . no bidding. It also depends on the size of the project.

On the final submission of the bid on government projects, the itemized breakdown of all the expenditure--to complete the project-- is out in the open-- for close examination should any impropriety is suspected. Transparency is a must.
If OP had ever submitted a bid on a government project –he should be (already) aware that every state or local government expenditure is “authenticated” by certified public accountants.
This doesn’t mean that accountants should be engineers or contractors… the government needs assurance that the numbers did not just pop up from a fifth grader’s hand held calculator. lol

A bid by a contractor must show that his summary of the bid clearly indicate that the prevailing wage-- whether union or non- union labor was used in the total man-hour labor cost in the total calculation.

This is again some sort of “check and balances” --so that contractors are not using unskilled labor that they picked up from the sidewalk and being paid peanuts that will give him an edge over other bidders.

A well-run and competitive contractor can have a greater chance of winning a bid if he has (exceptional) control over his OVERHEAD COST and similarly his INDIRECT COST. . . and still provide a high quality workmanship.

DIRECT COST is the hardest part to control because we are beholden to economic condition, worker unrest or natural disasters.

Note:
I’m not aware of Unions subsidizing a bidder’s projected fund to carryout in performing a contract.
This sounds like collusion or price fixing to my understanding.

This is aimed at disqualifying a non-union bidder from getting a shot of getting the job.
I worked as estimator and ran my electrical contracting business years ago.
 
I have heard of a few cases where construction unions have come up with contracts that allow lower pay for certain kinds of work as a way to compete outside of government jobs. I don't know how common or successful such efforts are.

The bigger issues with union versus non-union are not the wages paid to the employees.

I have to give some credit where credit is due though. Thinking back over my nearly 40 years in the control business, I can recall a time when it was all but impossible to find a union contractor that had competent controls and low voltage guys available. That has improved the last few decades, at least from what I am seeing, which is admittedly a very small sampling.

I still run across contractors that have guys who cannot wire from simple control schematics though (both union and non-union). They can make pretty pipe runs but the wiring is a mess. When I see a PM who has gone through a schematic and made a wire list in Excel for the electricians to wire from, I generally cringe because I know it will be problematic.
 
petersonra said:
I have heard of a few cases where construction unions have come up with contracts that allow lower pay for certain kinds of work as a way to compete outside of government jobs. I don't know how common or successful such efforts are.

The bigger issues with union versus non-union are not the wages paid to the employees.

I have to give some credit where credit is due though. Thinking back over my nearly 40 years in the control business, I can recall a time when it was all but impossible to find a union contractor that had competent controls and low voltage guys available. That has improved the last few decades, at least from what I am seeing, which is admittedly a very small sampling.

I still run across contractors that have guys who cannot wire from simple control schematics though (both union and non-union). They can make pretty pipe runs but the wiring is a mess. When I see a PM who has gone through a schematic and made a wire list in Excel for the electricians to wire from, I generally cringe because I know it will be problematic.
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The short time we were Union, they did beautiful pipe work, but like you said, when it came to wiring transformers and contactors, I was very surprised at the lack of knowledge, at least on the jobs we were on. Expected it from non-union, but not the Union guys. They couldn’t wire a simple up/down security gate, didn’t know how to properly bond a transformer, the worst was mounting Square D latching contactors sideways. The wiring was beautiful, but the contactors would not work half the time because they are designed to use gravity to release. This was in South Carolina.
 
controlled said:
The IBEW has a stabalization fund. This allows their contractors to bid a job at a lower rate,to compete with non-union, and the union will top up the difference.
I think this is what the OP is asking
Click to expand...
But that would never be used on a prevailing wage job...that is only used on non-prevailing wage jobs. It is not needed where all contractors have to pay the same wage.
 
don_resqcapt19 said:
But that would never be used on a prevailing wage job...that is only used on non-prevailing wage jobs. It is not needed where all contractors have to pay the same wage.
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And that would appear logical... but a better understanding of the “rules” surrounding when a ”stabalization fund” could be utilized and for which type of project could help shed light on my question.
 
follybeacher said:
I would only imagine that direct labor cost is what’s supplemented, seeing as how you cant skirt certified payroll, but who knows....
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DIRECT COST doesn’t just cover LABOR COST.

It covers the whole spectrum of project cost.
Cost of materials, fuel prices, logistics, politics, inflation and as mentioned-- even the devastating events like Covid-19.
Engineers are not equipped to handle these unexpected events.
In many cases you can buy insurance, but there is no guarantee for this umbrella. And if there is one available--the cost of running the business would be astronomical.
You have to bid higher than anybody else to cover this expense and then-- there goes your contracting business.

If only Madame Fortune Teller could lend us her Crystal Ball--we’d be OK.

When you are commissioned to make a ballpark estimate (on ie. months) before the project is expected to commence in earnest—you never can tell what the future holds.

The best thing you can do is throw-in a contingency plans. . .and hope your GUESSTIMATE would hold true.
For small projects-- we can pretty much (with certainty) come up with numbers that are pretty close.

For large projects the GUESS becomes more evident to almost become abstract.
Hence, cost overruns always increase the total cost of the project.
 
follybeacher said:
And that would appear logical... but a better understanding of the “rules” surrounding when a ”stabalization fund” could be utilized and for which type of project could help shed light on my question.
Click to expand...
That is totally up to what the IBEW local and their NECA counterpart agree to in that LU jurisdiction.
 
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