The Massachusetts Prevailing Wage Law (“Prevailing Wage Law”) for public works projects establishes the minimum wage rates that must be paid to laborers on various public projects. Public construction projects can include, among other things, additions and alterations to public buildings and demolition tasks.
Generally, the Prevailing Wage Law applies to all public agencies, such as cities, towns, and counties. For purposes of the Prevailing Wage Law, the public agency requiring assistance with a public works project is often referred to as the “awarding authority.” Whether you are a general contractor, subcontractor, or employee performing services related to a public construction project, it is important to understand some basic information about the Prevailing Wage Law and how it may affect you.
Before an awarding authority seeks bids for a public construction project, the awarding authority must obtain a schedule of the prevailing wage rate for the project from the Department of Labor Standards (“DLS”), i.e., the minimum wage rate that must be paid to workers on the project. The DLS must then provide a copy of the prevailing wage schedule to the contractors from whom bids are sought. If the project does not require bids, then the awarding authority must provide a copy of the prevailing wage rate sheet to the potential contractor(s), which will become part of the contract for that project. This allows contractors to factor the prevailing wage rate for the project into their respective bids, e.g., because the prevailing wage rate for a project may be higher than a contractor’s employees’ normal rate(s).
Once a contractor is awarded a public works project, then the contractor should take steps necessary to ensure compliance with the Prevailing Wage Law including, but not limited to, making sure that employees are paid the proper wages. Importantly, the Prevailing Wage Act covers the employees of general contractors and subcontractors, regardless of whether such employees are unionized or non-unionized.
The contractor is also required to post the prevailing wage schedule in a visible location at the jobsite for the duration of the project. This allows covered employees to understand how much they should be paid for that project. In addition to making sure that all covered laborers are paid the proper prevailing wage rate, a contractor should ensure that all eligible employees are paid overtime for hours worked over 40 in a workweek.
In addition, contractors should be aware about various limitations to the deductions that they can take from an employee’s hourly rate on such projects. An employer’s payments to health and welfare, pension, and certain unemployment benefit plans pursuant to a collective bargaining agreement, for example, are supposed to be included in the prevailing wage rate and thus cannot be deducted by an employer to lower the prevailing wage rate. Generally, only an employer’s contributions to a bonafide health and welfare, pension, or supplemental unemployment plan, may be deducted from the wage rate so as to lower the prevailing wage law and remain compliant with the Prevailing Wage Law.
Contractors are also required to submit weekly payroll report forms and required statements of compliance to the awarding authority. Importantly, failure to comply with the Prevailing Wage Law may result in civil or criminal penalties and/or sanctions under Massachusetts law. For specific questions about whether and how the Prevailing Wage Law applies to your situation, please consider contacting an attorney at the Harbor Law Group to discuss your case.
