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Market Theory of Wage Determination. Classical economists argue that wages the price of laborer determined (like all prices) by supply and demand. They call this the market theory of wage determination. The most basic of these is the number of workers available (supply) and the number of workers needed (demand).
The steps involved in determining wage rates involves performing job analysis, wage surveys, analysis of relevant organizational problems, forming wage structure, framing rules of wage administration, explaining these to employees, assigning grades and price to each job and paying the guaranteed wage.
In order to file the PERM application, it is necessary to obtain a prevailing wage determination (PhD) from the DOL. This establishes the appropriate minimum wage level required for the position. Wage determinations take approximately six weeks, as of this writing.
A “wage determination” is the listing of wage rates and fringe benefit rates for each classification of laborers and mechanics. The Wage and Hour Division issues two types of wage determinations. They are general determinations, also known as area determinations, and project determinations.
Once the initial planning step is complete, employers will typically request a prevailing wage determination (PhD) from DOL. As of 2019, processing of Pads takes about four months.
The prevailing wages are determined based on wages paid to various classes of laborers and mechanics employed on specific types of construction projects in an area.
5:51 20:02 Suggested clip The Production Function, Finding the Wage Rate, Rental Rate, and YouTubeStart of suggested client of suggested clip The Production Function, Finding the Wage Rate, Rental Rate, and
Employers calculate wages by multiplying an hourly rate times the number of hours worked. The federal government sets a minimum wage, but states may require workers to be paid more. For instance, as of 20010 the state of Texas required only the federal minimum wage of $7.25 per hour.
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