Prevailing Wage and Davis-Bacon Compliance in Pennsylvania

Pennsylvania's Public Works Regulations

Pennsylvania has a dual system of prevailing wage laws:

• State Law: The Pennsylvania Prevailing Wage Act (Act of August 15, 1961, P.L. 987, No. 442) requires contractors and subcontractors on public works projects funded by state or local governments to pay their workers at least the prevailing wage rates as determined by the Pennsylvania Department of Labor and Industry (L&I).
• Federal Law: The Davis-Bacon Act mandates that workers be paid prevailing wages as determined by the U.S. Department of Labor.

Key point: The Pennsylvania Prevailing Wage Act applies to public works projects where the total cost is $25,000 or more.

Definition of "Public Works" in Pennsylvania

In Pennsylvania, public works generally refers to construction, reconstruction, demolition, alteration, or repair work financed in whole or in part by public funds. Public works projects can include:

• Roads, highways, and bridges

• Public schools, government buildings, and other public infrastructure

• Water and sewage systems

Public works projects exceeding $25,000 in Pennsylvania are subject to the state prevailing wage law, while federally funded projects are subject to the Davis-Bacon Act.

Prevailing Wage Determinations: Federal and State Requirements

Federal Davis-Bacon Act

• This applies to federally funded or assisted projects
• Contractors must pay no less than the locally prevailing wages and fringe benefits as determined by the U.S. Department of Labor.
• Wage rates are based on local wage surveys for specific labor classifications and geographic regions.

Pennsylvania's Prevailing Wage Law

• The Pennsylvania Department of Labor and Industry (L&I) establishes the prevailing wage rates for state-funded public works projects for various job classifications.
• These rates are determined based on collective bargaining agreements and wage data from the local area and are updated regularly.

Components of Wage Determinations

Both federal and state wage determinations in Pennsylvania include:

• Basic Hourly Rate: The minimum wage rate paid directly to workers in a specific job classification.
• Fringe Benefits: Non-cash benefits include health insurance, pensions, and vacation pay.
• Total Hourly Rate: The sum of the basic hourly rate and fringe benefits.

For example, if the basic hourly rate is $25 and fringe benefits are $10, the total hourly rate would be $35. If the contractor does not provide fringe benefits, the worker must receive the entire $35 as wages.

Compliance for Contractors and Subcontractors

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

1. Determine Applicable Wage Rates:
   • Contractors must identify the prevailing wage rates for each job classification in the area where the work is being performed.
   • For federal projects: Use the U.S. Department of Labor's Wage Determinations Online (WDOL) portal via SAM.gov
   • For state projects: Wage determinations are available through the Pennsylvania Department of Labor and Industry (L&I)
2. Submit Certified Payroll Reports:
   • Contractors must submit certified payroll reports to the relevant authorities to demonstrate compliance with prevailing wage laws.
   • For federal projects: Use the U.S. Department of Labor's Form WH-347.
   • For state projects: Payroll records must be submitted to the Pennsylvania Department of Labor and Industry.
3. Handle Fringe Benefits:
   • Either provide the fringe benefits as specified or pay the equivalent value in cash to workers
4. Post Wage Rates On-Site:
   • Display the prevailing wage determinations in a conspicuous place on the job site
5. Maintain Accurate Records:
   • Contractors must maintain detailed payroll records that include hours worked, wages paid, and fringe benefits provided. These records must be kept for at least three years and made available for inspection.

Penalties for Non-Compliance

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

• Back pay to workers
• Fines
• Disqualification from bidding on future public works projects

Unique Aspects of Pennsylvania's Prevailing Wage System

• Statewide Coverage: Pennsylvania's Prevailing Wage Act applies to all public works projects exceeding $25,000, ensuring standardized wages across the state.
• Project-Specific Wage Determinations: The state sets prevailing wage rates uniquely for each project, considering local labor conditions and collective bargaining agreements.
• Certified Payroll Reporting: Contractors must submit detailed certified payroll records, ensuring transparency and compliance with wage requirements on public works projects.

Relevant Resources

• U.S. Department of Labor: Wage Determinations Online (WDOL): SAM.gov - Wage Determinations
• Pennsylvania Department of Labor and Industry (L&I) Prevailing Wage Information: Pennsylvania Prevailing Wage Information

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