Quick Reference to Standard Wage Rates
for Certain Service Workers
Questions and Answers Regarding
QUESTIONS AND ANSWERS FOR CONTRACTING STATE AGENTS REGARDING THE SETTING OF
STANDARD WAGE RATES FOR CERTAIN SERVICE WORKERS
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- 1. When does this act take effect and
when are contracts required to include standard wage rates?
Although the act takes effect on July 1, 1999, the provisions only apply to
those contracts or agreements entered into after July 1, 2000.
- 2. Does this Act cover an employer that
pays the state for a franchise to provide food preparation or
service, or both, for the state?
Yes, even those contracts that do not exceed the
$49,999 threshold as required by section (i) of the Act.
3. Are all contracts covered regardless of
the dollar amount of the contract?
No, the provisions of the Act only apply to those
contracts, agreements, or grants exceeding $49,999 per year.
4. Which contract services
are covered by this new law?
Those services which provide for food, building,
property, or equipment services or maintenance whose rate of reimbursement
or compensation are determined by state contract or agreement.
5. Are the providing of
security services or health services covered under this law?
As of July 1, 2013
security services will be covered under 31-57f. Please refer to the
Department of Administrative Services for contract information. Health
services will still not be covered.
6. What is a state agent
under Section 1 of the Act?
A state agent is defined as any state official, state
employee, or other person authorized to enter into a contract or agreement
on behalf of the state.
7. What is the definition
of building, property, or equipment services?
These services include any janitorial, cleaning,
maintenance, or related service.
8. How are the standard
wage rates for each classification established?
Under section (e) of the Act, the Labor Commissioner
shall determine the standard rate of wages for each classification of all
hourly, non-supervisory employees which shall be equivalent to the minimum
hourly wages set forth in the federal Register of Wage Determinations under
the Service Contract Act, plus a thirty percent surcharge of the hourly rate
to cover the cost of health, welfare, and retirement plans.
Are there definitions of
the classifications established by the Labor Commissioner?
Yes, these definitions are based on the applicable
occupation codes and titles set forth in the federal Register of Wage
Determinations under the Service Contract Act and will be made available to
any interested party.
Please provide an example
of how an hourly rate and thirty percent surcharge would be
If the hourly rate for a classification is $10.00 per hour, the
30% surcharge would equal $3.00 for each hour worked. The
contractor can either show a cost for providing benefits equal
to $3.00 per hour to pay that amount or pay the balance in cash
to the employee.
What benefits would be
included under health and welfare?
An employer can provide health or life insurance as well as
vacation, sick or holiday pay. Those benefits that are required
by federal or state law such as workers' compensation coverage,
social security, and unemployment benefits cannot be credited
against the 30% surcharge.
When must a state agent
contact the Labor Commissioner to receive the standard wage
The rates must be requested at least 10 days prior to the date
such contract will be advertised for bid.
Are contractors required to
complete certified payroll forms and to whom must these be
Yes, certified payroll forms supplied by the Labor Department in
accordance with section (h) of the Act shall be required to be
filled out and the contracting state agent may require in
writing that they be submitted to said agent.
Are there penalties for not
complying with the provisions of this Act?
Yes, any required employer or agent of such employer that
violates subsection (b) of the Act shall pay a civil penalty in
an amount not less than two thousand five hundred dollars
($2,500) but not more than five thousand dollars ($5,000) for
each offense. The Labor Commissioner may also make complaint to
the proper prosecuting authorities for the violation of any
provision of subsection (b) of this Act.