CIVIL 709 - Cost Engineering

Worksheet 1

Jocelyn Le Jeune
ID 1415347
/2010
Question 1:

Describe the main types of labour rates. Illustrate your answer with worked examples of base, fully
loaded and composite labour rates for an industry you are familiar with.

Wages are composed of several types of labour rates

Base Wages
The base wage is the basic part that an employer pays. The amount of this pay depends on the
qualification of the employee and on the work performed. Databases provide standard basic wages
for all types of jobs. This data is based on historical records supplied by firms, chamber of commerce,
government statistics or other sources. The period basis of calculation of the base wage is function of
the type of work performed. In the construction industry, craft labour is often paid on a “per hour
basis” whereas supervision, support staff or engineers are most of the time paid on “a per month
basis”.

Fringe benefits
Paid time off
It is additional benefits of time that corresponds to local and national holydays, vacation and sick
time. This must be thought when calculating the labour cost, by multiplying the base wage by the
appropriate factor. Some special fund exists to address the distribution of paid time off. The
employer pays those funds which then give money to an employee that takes paid time off. The
amount of PTO varies depending of the job and the country of work. As an example, a contractor
should be aware of any local holydays when planning a project.

Medical and life insurance benefits

A firm can provide some medical and life insurance programs for their employee. However, this is
optional and provide those possibilities is the employer’s choice.

Government mandated benefits

These

Overtime wages