
Prevailing Wage and Davis-Bacon Compliance in Maryland
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:
Determine Applicable Wage Rates
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.
Submit Certified Payroll Reports
Submit Certified Payroll Reports
For federal projects: Use the U.S. Department of Labor's Form WH-347.
For state projects: Payroll reports must be submitted to the Maryland Department of Labor.
Handle Fringe Benefits
Handle Fringe Benefits
Post Wage Rates On-Site
Post Wage Rates On-Site
Maintain Accurate Records
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
Maryland Prevailing Wage FAQs
Does Maryland have a state-specific prevailing wage law?
Yes, Maryland has its own prevailing wage law known as the Maryland Prevailing Wage Law. This law applies to state-funded public works projects that meet the criteria for funding and value (projects worth more than $250,000 and funded at least 50% by the state). For federally funded projects, the Davis-Bacon Act applies.
How are prevailing wage rates determined in Maryland?
For federally funded projects, prevailing wage rates are determined by the U.S. Department of Labor through surveys of wages paid to workers in specific job classifications within the local area. For state-funded projects, the Maryland Department of Labor sets prevailing wage rates annually based on wage data from contractors working in the region where the project is located.
What are the penalties for non-compliance with prevailing wage laws in Maryland?
Penalties for non-compliance with Maryland's Prevailing Wage Law or the federal Davis-Bacon Act can be severe. Contractors who fail to pay the correct prevailing wage may incur fines as a consequence. They may also be required to provide back pay to compensate workers for any wage underpayment. Additionally, contractors who repeatedly violate wage laws risk debarment, which disqualifies them from bidding on future public works projects.
How are fringe benefits handled under prevailing wage laws in Maryland?
Fringe benefits are part of the total prevailing wage that must be paid to workers. Contractors can either provide fringe benefits such as health insurance, retirement contributions, or vacation pay, or they can pay the equivalent value in cash. If no fringe benefits are provided, the total wage (basic hourly rate + fringe benefits) must be paid in cash.