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
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
7. What is the definition of
building, property, or equipment services?
These services include any janitorial, cleaning, maintenance, or related
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
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
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
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