New prevailing wage rates creating sticker shock for cities

New legislation changed how prevailing wages are determined – and resulted in dramatic increases. Cities are asking the Department of Labor & Industries (L&I) to take another look at the new rate.

SB 5493 passed during the 2018 session and took effect this summer. The bill requires L&I to establish the prevailing wage rate based on collective bargaining agreements (CBAs), where possible. For trades with more than one collective bargaining agreement, the higher rate controls. For trades that do not have collective bargaining agreements, the prevailing wage must be established by wage and hour surveys.

The new method has created significant spikes in prevailing wages for landscape laborers. Cities are experiencing doubling and tripling of rates depending on their geographic region. While the new legislation was expected to result in some increase in rates, the dramatic size of the increase for landscape laborers is beyond what most stakeholders anticipated. As a result, some cities are indicating that they can’t afford to contract out for this work and will look at other options.

AWC is encouraging cities to reach out to L&I and ask them to review the rate setting decision. Some key points you may want to include:

• The new legislation directed L&I to use CBAs for those trades and occupations that have collective bargaining agreements. It appears that the CBA L&I used was for trades that do not match the description for landscape construction.
• WAC 396-127-01346 describes the landscape construction trade in a very limited context. It appears that the trades in the CBA used by L&I was for heavy construction and do not match up with those described in the rule.
• When there is not an applicable CBA available, L&I must still use wage and hour surveys.

Letters should be sent to:

Jim P. Christensen
Industrial Statistician/Program Manger
Department of Labor & Industries
Prevailing wage
P.O. Box 44540
Olympia, WA 98504-4540
Jim.Christensen@Lni.wa.gov

AWC would appreciate it if any cities that send letters to L&I could also share those with our staff. Additionally, if you have data about the impact of the rate increase for your city, it would be helpful if you could also share that with AWC.