On November 21, 2013, the House and Senate of the Pennsylvania General Assembly finally passed a $2.3 billion transportation bill. Governor Corbett is expected to sign the transportation bill on Monday, November 25, in State College, Pa.
The transportation bill includes a provision that increases the threshold for prevailing wages to $100,000, but only for “locally funded” highway and bridge projects. The increase is effective with contracts entered on or after January 1, 2014.
A “locally funded” highway or bridge project is defined as one that is “funded entirely by funds”:
1) paid to counties from the Liquid Fuels Tax Fund;
2) allocated to municipalities under Liquid Fuels Tax Municipal Allocation Law;
3) made available to municipalities from the Highway Bridge Improvement Restricted Account within the Motor License Fund for expenditure on bridge rehabilitation, replacement and removal projects;
4) awarded to municipalities as transportation enhancement grants (under red light enforcement systems);
5) allocated from municipal budgetary sources using revenues derived through municipal taxes or fees; and
6) allocated to municipalities under 58 Pa.C.S.(relating to oil and gas).
For all other public projects, the prevailing wages threshold remains at $25,000.
The full transportation bill can be found here.
It’s that time of year again, when Republican legislators in the Pennsylvania General Assembly seek to amend the Pa. Prevailing Wage Act. There are now several proposals to do just that, and two bills are farther along in the process than the many others that have been proposed. In April, the House Labor and Industry Committee voted along straight party lines to report out of committee two bills proposing changes to the Prevailing Wage Act.
The first bill, HB796, will raise the threshold amount from $25,000 to $100,000.
The second bill, HB665, will exempt routine road maintenance contracts.
In addition to these two bills, still more bills have been proposed. Here is a small sampling of some of the other bills pending in the General Assembly:
HB1095 would impose a 3-year moratorium on the Prevailing Wage Act.
HB999 would exempt KOZs from requirements of the Prevailing Wage Act.
HB1257 would require at least 51% of a project to be paid with public monies before the Prevailing Wage Act would apply.
It seems likely that this year will see some changes to the Prevailing Wage Act. What those exact changes will be still remains to be seen. Of course, these newest proposed amendments may lead nowhere, as the amendments proposed last year never came to pass.
The U.S. Department of Labor will offer a free training session in Philadelphia on prevailing wage requirements for federal contracts. The training will be conducted on July 10-12.
This training is not just for federal government contractors. For example, federal agencies must ensure that recipients of assistance funded by federal stimulus funds require contractors and subcontractors to pay laborers and mechanics at least the Davis-Bacon prevailing wages. Thus, this training will also be useful for contractors performing work on federally-funded public contracts.
The press release with details on the training and how to sign up can be found here.
The Pa. Prevailing Wage Act mandates the payment of specified wages for publicly-funded public works contracts of $25,000 or more. The wages are typically tied to the wages established by area collective bargaining agreements.
Currently, there are a number of proposed amendments to the Act which would alter application of the Act to different public contracts.
House Bill 709, or the “School Construction Cost Reduction Act,” would exempt school districts as a public entity required to pay prevailing wages, unless the school board votes to be subject to prevailing wage.
House Bill 1329 would raise the contract monetary limit from $25,000 to $185,000. The $25,000 limit was set in 1961.
There are opposing viewpoints on the various proposed amendments to the Act as well as to the general concept of payment of prevailing wages on public contracts. Viewpoints in favor of the amendments and against the Act can be found here and here. Viewpoints in favor of the Act and opposing the proposed amendments can be found here and here.
For a non-partisan viewpoint from an economist with the nonpartisan Keystone Research Center, click here.
Needless to say, the proposed amendments would radically alter the landscape of public contracting in Pennsylvania. Whether such an altered landscape would actually result in lower construction costs for public entities and taxpayers, without a reduction in decent, middle class wages for workers on public works projects, is an open question. In all likelihood, the possibility of significantly lower costs on public contracts is probably just an illusion, and something touted by politicians looking for votes.