Public works include all work, construction, alteration, repair, or improvement, other than ordinary maintenance, done at the cost of the state or any municipality. State law requires open competitive bidding for public works projects, with some exceptions. The small works roster process allows the state or municipality to solicit bids from contractors on the roster rather than advertising the contract in an open bidding process. The small works roster process may be used for awarding contracts estimated to cost $300,000 or less. A small works roster includes any responsible contractor who requests to be on the roster, which may be a single general list or lists for specialties or categories of work. Regardless of the method for awarding the contract, public works contracts for construction, reconstruction, maintenance, or repair must state the hourly minimum wage rate to be paid to laborers, workers, or mechanics.
Employers are required to pay laborers, workers, and mechanics on public works contracts and public building service maintenance contracts at least the prevailing wage rate. The prevailing wage rate is the hourly wage, usual benefits, and overtime paid to the majority of workers in the same trade or occupation in the largest city in the county where the work is performed. The Department of Labor and Industries (L&I) publishes prevailing wage rates on the first business day in August and February, and any updated rates take effect 30 days after publication. The L&I industrial statistician sets prevailing wage rates based on collective bargaining agreements (CBAs) for a trade or occupation, with some exceptions. For a trade or occupation with more than one agreement in a county, the industrial statistician will adopt the higher rate. For trades and occupations for which there are no CBAs in a county, the industrial statistician must conduct wage and hour surveys. To establish the prevailing wage for residential construction, the industrial statistician also uses wage and hour surveys. Residential construction is the construction, alteration, repair, improvement, or maintenance of single-family dwellings, duplexes, apartments, condominiums, and other residential structures not exceeding four stories in height, in certain specified categories, like affordable housing, home rehabilitation programs, and homeless and domestic violence shelters.
The prevailing wage rate for workers is determined at the time of the prime contractor's bid due date, or the date the contract is awarded if the contract is not awarded within six months of the bid due date. The prevailing wage rate determined at that time remains the same for the life of the project.
Except for small works roster projects or residential construction, public works contracts must stipulate that the hourly minimum rate of wage for laborers, workers, or mechanics must be adjusted annually, based on the contract date, to provide that such wage is not less than the latest prevailing wage rate.
The amended bill changes the effective date from July 1, 2027, to July 1, 2028.
(In support) The length of public works projects can extend to three, five, or more years. However, public works projects freeze wages based on the prevailing wage at the time of the original bid. This creates disparities in wages between different projects. Workers may leave a project for better pay on other contracts. This drives up turnover and costs, and slows down projects. Wages should not be frozen. These are skilled workers who have the right to receive the minimum wage and benefits package associated with their craft. Requiring annual updates to wages will improve worker retention and ensure fair competition on all public works projects. Proponents have been working in good faith with interested parties to address concerns related to implementation, and as a result, small works roster projects and residential construction are exempt, and wages are adjusted only annually. Contractors should be able to reasonably estimate costs by reviewing the applicable collective bargaining agreements upon which prevailing wages are based. These agreements have steady and predictable increases, similar to cost-of-living adjustments.
(Opposed) Requiring that prevailing wage be increased in the middle of a project will add costs and endanger the viability of small contractors. Prevailing wage increases are not always predictable. Since the prevailing wage is tied to the highest applicable collective bargaining agreement, some industries have seen dramatic increases. This includes, for example, 73 percent for highway stripers, 38 percent for divers, and 53 percent for general carpenters. There have been instances where a single collective bargaining agreement in King County has dramatically increased rates in rural counties in Central and Eastern Washington. This imported Seattle-level wages to Yakima. While these might be outliers, the fact remains that the state method of setting these wages makes estimating costs unpredictable for contractors. Without additional guardrails, contractors could be trapped by unforeseen increases. This is particularly concerning for small contractors. To protect against this, the committee should consider an amendment to allow change orders for increases above five percent. This allows for the wage adjustment while ensuring viability for the contractor. Contractors should have the same certainty as workers. The public owners of the projects should pay for the cost increases.
(Other) This bill was introduced last session with an effective date of July 1, 2027. The committee should update this effective date to maintain the same implementation timeline. L&I needs the same amount of time to make critical software changes. It is important to note that prevailing wage is the minimum wage for projects. It is not a fixed wage. While the law freezes the minimum wage, many contractors agree to annual or semi-annual wage adjustments during the period of the contract. Those contractors pay wages based on those adjustments even though those wages are higher than the prevailing wage in place at the time of the bid. The bill effectively updates the minimum wage.
(In support) Erin Frasier, Washington State Building and Construction Trades Council; Clint Bryson, IBEW Local 76; Pete Butler, NECA Southwest Washington Chapter; and Christopher Ellis, Bricklayers and Allied Craftworkers.