Prevailing Wage Projects

The prevailing wage rates are determined by the Department of Labor & Industry for the actual work performed based upon the workers’ job classification and the locality of the work being performed. The rates are based upon collective bargaining agreements and other data for the craft and classification in the county where work on the public works project is being performed. The prevailing wage rate may include the cash paid and fringe benefits provided to the worker. 

Payment of wages by lump sum or piece rate violates the Prevailing Wage Act.

Depending on the public works project, Labor & Industry issues these rates:

• Building-Construction of sheltered enclosure with a walk-in access for housing people, equipment or supplies and includes utility installation, equipment and incidental grading and paving. The structure does not have to be habitable.
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• Highway-Includes the construction, alteration or repair of roads, streets, highways, taxiways, alleys, trails, paths, parking areas and other projects which are not incidental to building or highway construction.
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• Heavy-Projects that may not be classified as building, highway or residential. Examples include:
  
  
  • Antenna towers.
  • Bridges.
  • Dams.
  • Demolition that is not necessary for building construction.
  • Pipeline installation.
  • Subways.
  • Sewage installation not necessary for building.
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• Residential-Includes detached single-family home, single unit in condominium, unit in duplex, and a single townhouse.

A public body includes:

• Pennsylvania State government.
• Any authority created by the Pennsylvania General Assembly.
• A Commonwealth instrumentality or agency.
• State university and state-related university.
• A Pennsylvania political subdivision including the following:
  
  
  • County
  • City
  • Borough
  • Incorporated town
  • Township
  • School district
  • Vocational school district
  • County institution

Yes. Under section 8 of the Pennsylvania Prevailing Wage Act, an interested party may file a petition and seek a hearing challenging a rate determination within 10 days from the publication and issuance of the specifications for the contract for a specific project. A party challenging Labor & Industry’s prevailing wage rate has the evidentiary and legal burden of establishing alternative rates at the hearing.

A worker includes a laborer, mechanic, skilled and semi-skilled laborer, and apprentices employed by any contractor or subcontractor engaged in in the performance of duties directly upon the public works site regardless of whether the work becomes a component part of the project.

Examples of workers include:

• Workers performing testing and balancing of air handling, alarm, cable, and other systems
• Surveyors
• Truck drivers hauling materials around a jobsite and from an adjacent borrow pit to the jobsite
• On-site, engineering testing or inspecting that must be completed as part of the construction and before the project may be considered completed

Labor and Industry issues prevailing wage rates for each project. These are contained on the Department’s website. The Pennsylvania prevailing wage rates should be contained in the bid specifications issued for a public works project.

No. Payment of Pennsylvania prevailing wages is unconditionally required if the work is financed in whole or in part with public funds or payment by a public body. For example, a private developer receiving any public financing for a commercial project is required to pay Pennsylvania prevailing wages. The project’s total cost, not the amount of the public financing, determines whether Pennsylvania prevailing wages are required.

Furthermore, prevailing wages may be required if a private entity is performing work on a public body’s behalf, including acting as the public body’s instrumentality or alter ego.

Locally funded highway and bridge projects contracted after January 1, 2014 require Pennsylvania prevailing wages if the project’s total cost exceeds $100,000 and:

• The work is construction, reconstruction, demolition, alteration and repair work other maintenance work;
• Done under contract; and,
• The project is paid for in whole or in part of the funds of a public body.
• A locally funded highway and bridge project is a highway or bridge project that is funded entirely by funds:
  
  
  1. Paid to counties under section 9010(b) of the Vehicle Code (relating to disposition and use of tax), including borrowed funds under section 9010(b)(2)(ii), whether expended by the county or allocated or apportioned to political subdivisions;
  2. 
     
  3. Allocated or appropriated to municipalities under the Liquid Fuels Tax Municipal Allocation Law;
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  5. 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 under the Highway-Railroad and Highway Bridge Capital Budget Act for 1982-1983, and its supplements;
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  7. Awarded to municipalities as transportation enhancement grants under section 3116 of the Vehicle Code (relating to automated red light enforcement systems in first class cities) or 3117 of the Vehicle Code (relating to automated red light enforcement systems in certain municipalities);
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  9. Allocated from municipal budgetary sources using revenues derived through municipal taxes or fees; or,
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  11. Allocated to municipalities under 58 Pa.C.S. (relating to oil and gas).

No. Pennsylvania prevailing wages are required for a public works project even after construction commenced or was completed.

The following are excluded from Pennsylvania prevailing wage requirements:

• Projects where the U.S. Government requires Federal prevailing wages for the project and its cost exceeds $2,000.
• Maintenance work. (Explained in FAQs 13 and 14).
• Work performed under a rehabilitation or manpower training program.
  
  
  • Work performed under a rehabilitation program is work arranged by and at a Pennsylvania State institution primarily for teaching and upgrading the skills and employment opportunities of that institution’ s inmates.
    
    
• Grants pertaining to the use or acquisition of equipment, job training, etc. only if the grant recipient does not have any discretion to utilize the grant for construction.
• Construction financed by tax abatements if no public financing is used. This exception does not apply if the language specifically creating the tax abatement requires the payment of prevailing wages.
• Off-site work.
• Material suppliers who do not perform services at the job site.
• Public body employees.
• Furniture assembly if the furniture is not installed, incorporated, or attached to the structure.
• Supervisory work if the supervisor does not use any tools or equipment.

Maintenance work is the repair of existing facilities when the size, type or extent of the facilities is not changed. Maintenance work also occurs when a facility, once in usable condition, was restored to that condition by being partially overhauled or patched.

Reconstruction and replacement in kind is not excluded as maintenance and requires Pennsylvania prevailing wages be paid. Work requiring prevailing wages includes reconstruction which is defined as “to construct again; to rebuild; to form again or anew.”

Maintenance work does not include facilities that are enlarged or altered according to industry standards.

The following are examples of work that requires Pennsylvania prevailing wages and is not maintenance work:

• In-kind sidewalk replacement.
• Telecommunication wiring using existing conduits.
• Roof replacement.
• Road milling and replacement.
• Repair and rehabilitation of manholes.
• Painting other than covering up minor imperfections.

Yes. Pennsylvania prevailing wages are required for on-site engineering, testing or inspection work on a public works project occurring during construction or which is integral part of part of the construction that is necessary for completion. This work is classified according to the prevailing wage classifications related to these services.

A public body has the following duties:

• Request Pennsylvania prevailing rates for the project from Labor & Industry. A new request must be made if the contract is not awarded within 120 days from the determination date. 

• Submit the Prevailing Wage Awarding Agency Form to Labor & Industry within 5 days from the date of ward of contracts. 

• Place the Pennsylvania prevailing wage rates in the specifications and the notice for securing bids for every public works project.

• Incorporate the Pennsylvania prevailing wage rates issued by Labor & Industry for the project into the contract. The contract shall also contain the information specified in the Regulations, 34 Pa. Code § 9.103.

• Enforce the posting of Pennsylvania prevailing wage determinations at the public works project.

• Require the weekly filing of certified payrolls from contractors and subcontractors.

• Assure that the Labor & Industry’s prevailing wage rates were paid on the public works project and that the job classifications were maintained before payment is made to the contractor and or a subcontractor.

• Inform Labor & Industry if the contractor or subcontractor fails to pay the Pennsylvania prevailing wage rates for the correct classifications.

• Comply with these requirements even if construction already commenced and Pennsylvania prevailing wage rates were not contained in the specifications and contract.

Contractor and subcontractor duties include:

• Unconditionally pay Pennsylvania prevailing wages, except for authorized deductions, to all its workers on the project for their actual trade, craft and classification.
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• Maintain the following records:
  
  
  • Accurate records showing each worker’s name, craft or classification, number of hours worked each day, hourly wage rate including employee benefits, deductions to each worker on the public works project.
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  • Accurate and complete records of fringe benefits and deductions.
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  • Timecards for all workers.
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  • Signed indentures for each apprentice and approvals of the Pennsylvania Apprenticeship and Training Council.
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• Complete and submit weekly certified payrolls to the public body. Falsification of certified payrolls may be prosecuted as a criminal misdemeanor in Pennsylvania.
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• Keep all required records for at least 2 years and provide access to these records to Labor & Industry and the public body that awarded the contract at reasonable hours.
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• Post Pennsylvania prevailing wage rates for the public works project in an accessible location for the duration of the construction. The posting shall also contain the information listed Labor & Industry’s regulations, 34 Pa. Code § 9.103(7).

Contractors and subcontractors must pay workers the prevailing wage rate for all hours worked on a public works project in cash or take credit for bona fide fringe benefit contributions or legitimate authorized deductions.

Contractors or subcontractors may claim credit for contributions actually being made to a bona fide fringe benefit program. Labor & Industry will also recognize certain authorized deductions as bona fide fringe benefits that are provided solely for the workers’ benefit and convenience, and which were previously authorized in writing by the worker.

Bona fide fringe benefits include:

• Health insurance
• Vacation
• Certain travel expenses (reimbursement but not charging for transportation)
• Retirement funds
• Fringe benefits where Labor & Industry certifies that the contributions are actually being paid to a bona fide fringe benefit program that is for the worker’s exclusive benefit

Contractors and subcontractors may claim authorized deductions Pennsylvania’s Wage Payment and Collection Law allowed or authorized by the Wage Payment and Collection Law’s regulations for the convenience of employees (34 Pa. Code § 9.1).

 You can view the regulations here.

Examples of other authorized deductions include the following if these are authorized in writing by the employee and solely for the worker’s benefit:

• Payment into worker’s personal savings account or Christmas club at a credit union, bank, or the purchase of United States Government bonds
• Contributions for charitable purposes
• Repayment to the employer of bona fide loans
• Purchases for goods, wares, merchandise, services, rent or similar items from the employer or third parties

Unauthorized fringe benefits or deductions include:

• Per diem payments
• Motel room expenses
• Employer funded events, such as parties and picnics
• Providing transportation to the job site
• Costs of obtaining clearances required by law
• Tool rental
• Safety fines
• Clothing and hats with company logos
• Company-provided meals
• Holiday bonuses

Pennsylvania’s Minimum Wage Act requires overtime for work exceeding 40 hours per workweek. That rate should be calculated at 1½ times the hourly prevailing wage rate issued by Labor & Industry for the public works project.

Yes. Examples of permissible deductions that do not require written authorization from the worker include:

• Amounts deducted to comply with a court order
• Administrative fees for processing garnishments (up to statutory limit)
• Pension administrative fees charged by outside firms

An intentional violation of the Prevailing Wage Act is:

• Any acts of omission or commission done willfully or with a knowing disregard of the rights of workers resulting in payment of less than the prevailing wage rates; or,
• Failure to correct underpayments to workers after Labor & Industry found that the contractor committed an unintentional violation of the Pennsylvania Prevailing Wage Act.

Contractors commit intentional violations by being oblivious to the obvious or looking the other way when violations are being committed. A contractor’s or subcontractor’s ability to pay may not excuse an intentional violation.

A non-exhaustive list of examples of intentional violations includes:

• False certification of payment of prevailing wages
• Advising workers to lie to Labor & Industry investigators
• Failure to provide requested payroll information to Labor & Industry investigators
• Using preset ratios of craft and laborer work instead of paying workers for the actual work performed
• Paying workers at a lower rate in a contractor’s training program that was not a program registered with the Pennsylvania Apprenticeship and Training Council
• Failure to keep required records
• Requiring workers to under-report craft time
• Misclassification of workers to avoid paying higher prevailing wage rate
• Secret payment of cash supplements instead of the full prevailing wage with tax deductions
• Requiring workers to endorse blank checks to make it appear as if some workers received prevailing wages

Penalties for any contractor or subcontractor found to have intentionally violated the Pennsylvania Prevailing Wage Act are:

• Debarment from public works projects for 3 years during which the contractor or subcontractor may not be awarded public works contracts for that time
• Payment of the prevailing wages owed to the workers
• Referral may be made to the Attorney General to seek liquidated damages
• Labor & Industry may direct the public body to terminate the contractor or subcontractor from continuing to work on the public works project
• There may also be criminal penalties if the contractor or subcontractor committed fraud or misrepresented information on documents and records required under the Prevailing Wage Act
• A person, firm, corporation, corporate officer or partnership may face these penalties

Failure to pay prevailing wages that was unintentional. For example, an unintentional may occur where the public body did not request prevailing wages and work commenced on the construction.

A contractor or subcontractor which unintentionally violated the Pennsylvania Prevailing Wage Act has the opportunity to pay the prevailing wages owed to its workers. Failure to correct these underpayments may constitute an intentional violation of the Prevailing Wage Act.

Yes. Contractors and subcontractors have the right to a stenographically-recorded administrative hearing before a neutral hearing examiner to contest these allegations. Each party may present testimony and documents and engage in direct and cross-examination of witnesses. Labor & Industry bears the burden of proof.

Labor & Industry’s adjudication and order may be appealed to the Prevailing Wage Appeals Board and then to Commonwealth Court.

An interested party may file a grievance with the Prevailing Wage Appeals Board challenging the Department’s interpretation of the Prevailing Wage Act (34 Pa. Code § 213.8). Procedures and forms may be obtained: https://www.pacodeandbulletin.gov/Display/pacode?file=/secure/pacode/data/034/chapter213/chap213toc.html&d=