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REFERENCE GUIDE
Standard Wage Rates for Certain Service Workers

Questions and Answers Regarding P.A. 99-142

 

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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?
No, these services do not have to be included for coverage under this law.
 
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
 
9. 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.
 
10. Please provide an example of how an hourly rate and thirty percent surcharge would be calculated.
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.
 
11. 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.
 
12. When must a state agent contact the Labor Commissioner to receive the standard wage rates?
The rates must be requested at least 10 days prior to the date such contract will be advertised for bid.
 
13. Are contractors required to complete certified payroll forms and to whom must these be submitted?
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.
 
14. 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


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