Prevailing Wage and Davis-Bacon Compliance in Maryland

Maryland's Public Works Regulations

Maryland has both state and federal regulations governing prevailing wages for public works projects:

• State Law: The Maryland Prevailing Wage Law applies to state-funded public works projects and requires contractors and subcontractors to pay their workers prevailing wages determined by the Maryland Department of Labor.
• Federal Law: For federally funded or federally assisted projects, contractors must comply with the Davis-Bacon Act, which sets wage standards based on federal determinations.

Key Point:

• The Maryland Prevailing Wage Law applies to public works projects with a total value of $250,000 or more that receive 50% or more of the state's funding.

Definition of "Public Works" in Maryland

In Maryland, public works are defined as construction, reconstruction, maintenance, or repair projects financed either in whole or in part by public funds. Public works can include:

• Roads, highways, and bridges

• Public buildings, schools, and government facilities

• Public infrastructure such as water treatment plants, utilities, and parks

Key Points:

• Any construction project that public funds fully or partially funds is considered a public works project.
• The Maryland Prevailing Wage Law applies to state-funded public works projects that meet the criteria for funding and value.
  

Maryland Prevailing Wage Determinations: State and Federal Requirements

Maryland Prevailing Wage Law

• For state-funded projects, the Maryland Department of Labor determines the prevailing wage rates for various job classifications based on wage data collected from local contractors.
  
• These rates are updated annually and are specific to the region where the public works project is located.
  
• Contractors on state-funded projects must follow these wage rates to ensure compliance with state law.
  

Federal Davis-Bacon Act (DBA)

• Under the Davis-Bacon Act, the U.S. Department of Labor sets prevailing wages for federally funded projects.
• These rates are based on local wage surveys and cover basic hourly wages and fringe benefits for various job classifications.
  

Components of Wage Determinations

Both state and federal wage determinations in Maryland include:

• Basic Hourly Rate: The minimum wage rate paid directly to workers for every hour worked.
• Fringe Benefits: Non-cash benefits include health insurance, retirement plans, and vacation pay.
• Total Hourly Rate: The sum of the basic hourly rate and fringe benefits.

For example, if the basic hourly wage is $30 and fringe benefits are valued at $10, the total hourly rate would be $40. If fringe benefits are not provided, the contractor must pay the full $40 in cash wages.

Compliance for Contractors and Subcontractors

Contractors and subcontractors working on public works projects in Maryland must:

1. Determine Applicable Wage Rates:

• For federal projects: Use the U.S. Department of Labor's Wage Determinations Online (WDOL) portal via SAM.gov
• For state projects, Refer to the Maryland Department of Labor

2. Submit Certified Payroll Reports:

• For federal projects: Use the U.S. Department of Labor's Form WH-347.
• For s.tate projects: Payroll reports must be submitted to the Maryland Department of Labor

3. Handle Fringe Benefits:

• Contractors must ensure that all workers are paid at least the prevailing wage for their job classification. This includes both the basic hourly wage and any required fringe benefits.
  

4. Post Wage Rates On-Site:

• Contractors must post prevailing wage determinations in a visible location on the job site so workers can easily access the information.
  

5. Maintain Accurate Records:

• Contractors must maintain detailed records of hours worked, wages paid, and any fringe benefits provided. These records should be made available for inspection by the Maryland Department of Labor or the U.S. Department of Labor.

Penalties for Non-Compliance

Failure to comply with prevailing wage laws in Maryland can result in:

• Fines
• Back pay for underpaid workers.
• Disqualification from future public works contracts

Unique Aspects of Maryland's Prevailing Wage System

• High Project Threshold Requirement: Maryland's Prevailing Wage Law applies only to public works projects valued at $250,000 or more and funded at least 50% by state money. This high threshold limits prevailing wage requirements to larger, state-funded projects.
• Annual Wage Surveys to Determine Rates: Maryland conducts annual wage surveys, gathering data from contractors, unions, and public bodies to establish prevailing wage rates for each county. This ensures that wage rates are current and reflective of local standards.
• Strict Apprenticeship and Training Fund Requirements: In Maryland, contractors must contribute to an approved apprenticeship or training fund. If they do not, they must pay an equivalent amount as part of the wages, supporting workforce development in the construction industry.

Relevant Resources

• U.S. Department of Labor: Wage Determinations Online (WDOL): SAM.gov - Wage Determinations

• Maryland Department of Labor: Prevailing Wage Information: Maryland Prevailing Wage
  

• Certified Payroll Form WH-347: U.S. Department of Labor Certified Payroll Form