Labor

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Labor

• Estimating labor involves determining how long it
  will take to do the work involved, what labor
  types will be required, and at what pay rates.
• The unit of time for estimating labor is the hour.

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Factors Affecting Labor Estimate - 1

• - Wage Increase- For large projects that take
  years to build allowances must be made for pay
  increase
• - Availability and Productivity of Workers- When
  there is a lot of work available and workers are
  scarce, labor costs will most likely go up.

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Factors Affecting Labor Estimate - 2

• Climatic Conditions- Any weather extremes will
  slow down work and may require additional
  precautions.
• Working Conditions- Little working space, limited
  storage space, and difficult delivery situations
  affect productivity.
• Actual amount of work time per hour-

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Breakdown of a Typical Craftworkers Hour
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Best Source

• The best source for the estimator to determine
  labor productivity is to check the companys past
  project records and then consult with the general
  superintendent.

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Closed or Union Shop vs Open Shop

• - Closed Shop- Employer will not hire any non
  union member
• - Union Shop- Employer can hire nonunion workers,
  but they must join the union
• - Open Shop- Employer can hire any individual
  qualified to perform the job

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Union vs nonunion

• Average productivity for a union worker is lower
  than that of equally qualified nonunion worker,
  because of work rule, lost time due to labor
  disputes, nonworking job stewards, and paid break
  periods.
• Associated General Contractors of America (AGC)
  and National Constructors Association (NCA)
  represent contractors in negotiation with local
  unions. Associated Builders and Contractors (ABC)
  represents open shop contractors.

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Pricing Labor
Quantity of work Labor Cost
---------------------- x Cost per hour
Productivity Cost per hour Base hourly cost
Payroll burden Base Hourly Cost Union Scale
(union contractors/contracts) Nonunion Scale
(open shop) Prevailing Wages in the Area
(federal projects)
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Payroll Burden Items - 1

• Fringe Benefits- vacation pay, employer paid
  health and welfare costs, pension costs, and
  training.
• Workers Compensation Insurance
• Fixed Overhead-
• Federal and State Unemployment Costs
• Social Security Taxes (FICA)

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Payroll Burden Items - 2

• Special Costs
• Overtime Premium Pay
• Transportation (mileage or transportation)
• Travel Time
• Shortened Shift Time (6 am to 1 pm and 1 pm to 8
  pm)
• Area Premium Pay (unfavorable working conditions)

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