January's Monthly Ramblings of a Recovering Architect
THE 2018 WAGE RATE INCREASE
For much of the last decade, the base wage rate plus fringe for a roofer in the Type B, General Building category was $15.68. This compensation was one of the lowest of all the trade classifications, despite the skill associated with proper application of most roofing assemblies, extensive safety requirements and occasional harsh conditions of the work environment.
Effective January 1st of 2018, that wage rate doubled on publicly funded projects to $31.38 per hour.
The only other trade seeing a larger increase is Boilermakers, while a few others such as Bricklayers and Cement Masons actually saw a small decrease in their hourly rate.
NRC has been an advocate of raising the wage rate for years and has been consistently increasing the salaries of its roofers to well above the previous wage rate levels. NRC believes fair compensation will be good for roofing as it should allow the roofing industry to attract and maintain a larger proportion of the labor market.
That is the good news! The challenges with such a large and sudden increase will be in harmoniously and effectively implementing the new wage rates while staying competitive. Companies who already pay employees higher salaries should have an easier time with the transition, but all companies will have to deal with the large discrepancies in salaries going to employees working on publicly funded projects from those working on privately funded, negotiated bid projects.
The playing field for companies bidding on wage wate projects will stay level if all of the competing companies define “roofer” and “laborer” in the same way; companies who load their crews up with a disproportionate number of “laborers” may get awarded the project, but might later run afoul of the Department of Workforce Solutions if some of those laborers make a claim that they were actually doing “roofing’ work. No matter who is awarded the project, the cost of the roof on these projects will most likely increase. Since the new wage rates will double the labor portion, it could effectively increase the total cost of some Public Works roof projects by as much as 30%.
This overall cost increase may be reduced by some fortuitous reductions in the cost of materials, labor efficiency, or if the new definition for “roofer” is adopted. The proposed definition moves metal associated with roof work under the classification of ‘Roofer’ instead of “Sheetmetal Workers", who are billed out at the higher rate of $46.44 per hour. We may have to wait until the end of this year for a decision on this revised definition.
Owners, Estimators, Contractors and Architects working on Public Works projects should be aware of this potential cost increase when developing their budgets. Due to the fact that labor represents an even larger proportion of the total costs of a tear-off /re-roof, those projects should see the highest increases.