Chapter 104, HRS

Presented by: Pamela Martin, DLIR, Wages Division,

September 27, 2016

Executive Summary: We present the highlights of a presentation by the State of Hawaii’s Department of Labor and Industrial Relations (DLIR), Wage Standards Division. This is the department that handles what is better known as “prevailing wage”.

Highlights: Contractors who perform public projects for the State of Hawaii or the federal government are likely well aware of the term “prevailing wage”. Prevailing wage is a minimum wage (base wage combined with fringe) that must be paid by a contractor when performing on most public projects.

Basic hourly rate + fringe benefits = Prevailing wage

There are few exceptions to paying prevailing wage on public projects – the only one of significance was projects less than or equal to $2,000.

Below are some examples of when to pay, or not to pay, prevailing wage:

Offsite location

There has long been a bid strategy of constructing or assembling products offsite for incorporation into the project. This practice is still permissible; however, it is worth noting the following:

• In your existing facility – the contractor is not required to pay prevailing wage when work is being performed in a contractor’s existing facility.
• In an addition to your permanent facility – Ms. Martin stated that work in an addition to your existing facility can be paid less than prevailing wage, but only if that facility is for service of the entire company and will be in service after completion of the project.
• In a newly/specially constructed facility: if the contractor constructs a facility specifically to perform work for a particular project, then this work must be paid at a prevailing wage rate.
• Just “offsite” doesn’t work – Ms. Martin shared an anecdote when a contractor went outside of the project fence at Honolulu Airport, and adjacent to the site, and assembled parts for incorporation into the project. The contractor was mistaken in thinking that performing work outside of the project limits would permit paying below the prevailing wage. This location was only used for this project, so it was subject to …