Prof Awad S. Hanna Labor Cost and Sources of Labor Costs.

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Presentation transcript:

Prof Awad S. Hanna Labor Cost and Sources of Labor Costs

Prof Awad S. Hanna L ABOR C OST Six Components to the Labor Cost: 1. Wages 2.Worker's Compensation Insurance 3.FICA Tax, Federal Insurance Contribution Act. 4.Unemployment Compensation Tax/Insurance 5.PL&PD- Public Liability and Property Damage Insurance 6.Fringe Benefits

Prof Awad S. Hanna L ABOR W AGES  Vary Considerably with Locations and Type of Crafts, and union vs. op shop.  Agreements Such as Union / Open-Shop / Prevailing Wage  The Above Wage Rates are Known as Base Wage Rate  Compensation for 40 hr/week ( 8 hr/day for 5 days )  For Work Over 8 hr/day Or Weekends the Base Rate is Times  Average Wage Rate Considers S.T. and O.T. = B.W.Rate * ( * O.T.) (Actual Hours Worked per Week)

Prof Awad S. Hanna W ORKER'S C OMPENSATION I NSURANCE  Insurance Paid by Employers  Covers Employees in Accidents or Death Caused by Work  Premium Rate is Specified in $s per $100 of Base Wage  Discounts are Given Depending on Company's Records in enforcing Safety Programs.( Experience Modification Rate, EMR )  EMR can be > 1, With Bad Safety and Accident Records

Prof Awad S. Hanna Federal Insurance Contribution Act - FICA (Social Security)  Federal Government Requires Employers to a tax for providing retirement benefits for employees  The Rate = 7.51% of Total Earnings (Avg. Wage) up to $45,000/Year of Employee wage  The Employee Contributes an Equal Amount Through the Employer

Prof Awad S. Hanna U NEMPLOYMENT C OMPENSATION T AX /I NSURANCE  A Tax Collected by the State to Provide Unemployment Insurance.  Paid by Employers  Approximately 3% of Total Earnings (Avg. Wage) of the Employees.

Prof Awad S. Hanna Public Liability and Property Damage Insurance (PL&PD)  An Insurance Protecting the Contractor from Liabilities Involving Damage to a Third Party and Public Property Caused by Contractor's Employee During Construction  Premium is Specified in $s per $100 of Base Wage

Prof Awad S. Hanna F RINGE B ENEFITS  Employers often Pay Benefits in Terms of :  Paid Vacations  Pension Plans  Training Programs, etc.  Others  Rate Ranges From 0.75 to 2.1 $/hr

Prof Awad S. Hanna Union Labor Rates  Means Labor Rates for the construction industry  Provide annual hourly union wages for 46 buildings construction trades in major U.S. and Canadian cities.  The Richardson Report  Provides quarterly union wages for 16 crafts in 120 U.S. and Canadian cities.  The Construction Labor Research Council (CLRC)  Provides construction union labor cost for 17 crafts in 300 cities (average of 3000 projects)

Prof Awad S. Hanna Sources for Non-Union Labor Costs  Means Open Shop Building Construction Labor Costs, R.S. Means  Employment and Earning, Bureau of Labor Statistics