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Prevailing wage: State grant programs

A broadband line lays on grass next to a farm.

Because many state grant programs for construction and public works projects are funded in whole or in part with state dollars, grant recipients and project owners must adhere to prevailing-wage requirements enforced by the Minnesota Department of Labor and Industry (DLI). Specifically, prevailing wage applies to projects that are estimated to cost more than $25,000.

What is prevailing wage?

Prevailing wage is the minimum hourly wage employers must pay certain workers who work on construction and public works projects where state dollars are used to fund the construction. The state dollars may include grants or loans to municipalities or private businesses. The prevailing wage includes the employer's cost of benefits.

Prevailing-wage requirements

Follow these steps to ensure prevailing-wage rates are paid to workers on construction and public works projects supported by state dollars.

  1. If required by Minnesota Statutes 116J.871, ensure the grantee certifies to DLI that laborers and mechanics at the project site will be paid prevailing wages. The certification form should be signed as part of the grant contract.

  2. Ensure all contracts for a project specifically state the prevailing-wage rates, prevailing hours of labor and hourly basic rates of pay.

  3. Ensure applicable prevailing-wage determinations for the project, along with the following contract language, is incorporated into proposals and all contracts, including all contracts with subcontractors, and the wage determination is posted in a conspicuous location on the project site. All work on a project must be performed under contracts that specifically include the prevailing-wage obligations of the Minnesota Prevailing Wage Act.

    • Pursuant to Minnesota Statutes 177.41 to 177.44 and corresponding Minnesota Rules 5200.1000 to 5200.1120, this contract is subject to the prevailing wages as established by the Minnesota Department of Labor and Industry. Specifically, all contractors and subcontractors must pay all laborers and mechanics the established prevailing wages for work performed under the contract. Failure to comply with the aforementioned may result in civil or criminal penalties.

  4. Complete and submit required certified payroll reports no more than 14 days after the end of each pay period.

    • Grant recipients and project owners must collect, keep and maintain these records for a minimum of three years after final payment is made.

Minnesota Housing Finance Agency (MHFA) grants and loans

Border-to-Border Broadband Development Grant Program

The Border-to-Border Broadband Development Grant Program was created in 2014 to provide financial resources that help make the business case for new and existing providers to invest in building broadband infrastructure into unserved and underserved areas of the state.

Prevailing-wage applicability, state-funded broadband projects

For “middle mile” infrastructure, or broadband infrastructure that links a broadband service provider's core network infrastructure to last-mile infrastructure:

  • Does the grant amount exceed $200,000 or loan amount exceed $500,00? If so, prevailing wage will apply.

For “last-mile” infrastructure, or broadband infrastructure that serves as the final leg connecting the broadband service provider's network to the end-use customer's on-premise telecommunications equipment:

  • The infrastructure must be provided to individual residences.

  • Does prevailing wage apply to these grants? No. 

  • Minnesota Statutes 116J.398 Broadband prevailing wage exemption states:

    • “Notwithstanding any other law to the contrary, section 116J.871 does not apply to a project receiving a grant under section 116J.395 for the construction, installation, remodeling, and repair of last-mile infrastructure, as defined under section 116J.394, paragraph (e).”

Resources

Contact

For general prevailing-wage questions, contact dli.prevwage@state.mn.us or 651-284-5091. For questions about the Border-to-Border Broadband Development Grant Program and prevailing-wage applicability, contact Colleen Anderson, DLI senior labor investigator, at colleen.anderson@state.mn.us.

Solar for Schools Grant Program

The Solar for Schools Grant Program was established in 2021 to provide grants to Minnesota K-12 schools, colleges and universities for the installation of solar energy systems. The program provides opportunities to integrate renewable energy use into the school’s curriculum.

Information for workers

How do I know which rate I should be paid for my work on a Solar for Schools Grant Program-funded project?

The prevailing-wage rate would depend on the type of work you perform on the project site. Most of the employees doing the solar installation work would likely be classified as an electrician. Additional classifications may include common labor or equipment operator. Find more labor classification definitions at dli.mn.gov/business/employment-practices/prevailing-wage-information.

Am I eligible for overtime? 

Overtime must be paid after eight hours per day, on the project, at a rate of one-and-one-half times the basic hourly rate plus the fringe rate. Overtime must also be paid after 40 hours per week. For questions about overtime, contact dli.prevwage@state.mn.us or 651-284-5091.

Resources

Contact

For general prevailing-wage questions, contact dli.prevwage@state.mn.us or 651-284-5091. For questions about the Solar for Schools Grant Program and prevailing-wage applicability, contact Stephanie Selb, DLI senior labor investigator, at stephanie.selb@state.mn.us.