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Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20130&cosponId=12383
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House of Representatives
Session of 2013 - 2014 Regular Session

MEMORANDUM

Posted: April 4, 2013 02:10 PM
From: Representative Sheryl M. Delozier
To: All House members
Subject: Introduction of Legislation to Amend the Prevailing Wage Act
 
Please find attached a copy of legislation I plan to introduce in the near future to amend the Prevailing Wage Act to: 1) raise the threshold of the law from $25,000 to $500,000 (with annual COLA adjustment thereafter); and 2) establish a process that determines actual prevailing minimum wage for a particular county. With respect to determining the true prevailing wage rate in an area, my legislation requires the Secretary of Labor & Industry to 1) establish prevailing wage rates on a county by county basis; 2) base such rates on wage data actively solicited from contractors; 3) base such data on actual wages paid on private-sector construction projects in a particular county. My legislation would ensure that wage data submitted by contractors be kept confidential by the Department of Labor & Industry.

The Pennsylvania Prevailing Wage Act was enacted in 1961, and it requires that workmen on public projects that cost over $25,000 be paid the "prevailing minimum wage" in their locality. I believe raising the threshold to $500,000 will provide great relief to our municipalities when initiating small construction projects.

In addition, it is important to note that the act does not specify how the Secretary of Labor & Industry is to determine the wage rates, or how they are to be promulgated. In the past, different Administrations have used various interpretations of the law to determine the prevailing wage rates for public projects using no standard methodology. The Ridge Administration tried to initiate a county by county wage survey process. The Rendell Administration made no serious attempt to gather comprehensive wage data and simply utilized collective bargaining rates (which is still the process being used). I believe the Legislature needs to provide firm guidance to the Secretary on how he/she should be calculating prevailing wage rates.

The most rationale means of determining the “prevailing minimum wage” rate is to find out what wages are actually paid on private-sector construction projects in a particular locality. This means that the Secretary must gather accurate wage data from contractors. Quite frankly, nonunion contractors have been hesitant to share wage information with the department because of the fear that such data would become public information. My legislation promotes the gathering of such information by requiring that it be kept confidential by the department; with this guarantee, I believe we can see much greater participation in wage surveys by nonunion contractors.

It is important to note that my legislation simply amends the Prevailing Wage Act so as to give specific guidance to the Secretary on how to determine the actual "prevailing" wage rate in a given area. The current process (utilization of union age rates) is not reflective of how the system, or law, was intended to operate. There are many counties where the use of union wage rates is not representative of the "prevailing minimum wage rate" actually paid by contractors in a particular area. My legislation offers a reasonable means of determining these wage rates.

My legislation is supported by the PA State Association of Township Supervisors, PA State Association of Boroughs, and Associated Builders and Contractors (ABC), PA League of Cities and Municipalities, and PA School Boards Association.

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Introduced as HB1191