(888) 745-0754

MARYLAND PREVAILING WAGE

FREQUENTLY ASKED QUESTIONS ON STATE PREVAILING WAGE

Whether you are just starting out as a prevailing wage contractor or just looking to keep yourself updated, we have compiled these resources about state prevailing wage. Here are the most common questions of prevailing wage contractors and workers to help expand your knowledge!

Contractors for Maryland state-funded public works construction projects face the different regulations surrounding Maryland prevailing wage law. It is essential for any contractor or subcontractor to know the different rules, obligations and potential penalties.

Read on for a comprehensive guide to Maryland Prevailing Wage.

What does the Maryland Prevailing Wage Law Cover?
The Maryland Prevailing Wage Law covers contractors and subcontractors who work on state or political subdivision contracts that have a value over the $500,000 threshold. The law covers the payment of the appropriate trade or craft prevailing wage rate to construction workers, such as carpenters, plumbers, and laborers.

Installation work, including activities such as pulling wires and installation of jacks, are subject to Prevailing Wage Law. On the other hand, vendors listed as a material supplier only, who perform no covered work, are not subject to the law. Truckers who deliver materials to and from a worksite are also generally not subject to the Prevailing Wage Law.

Are all public works projects covered by the Maryland Prevailing Wage Law?
Public work is defined by the Maryland State Finance and Procurement Article 17-201 to 17-226 as “a structure of work… constructed for public use or benefit; or is paid for wholly or by public money”. Examples include a bridge, building, ditch, road or alley. The same article defines a public body as the State of Maryland or any of its subdivisions, as well as any authority created by state Legislature, and also any instrumentality or agency of or within the State.

Projects between a public body and a contractor to perform public work (that is, construction, reconstruction, alteration, custom fabrication, demolition, repair or maintenance work) under a contract and paid for in whole or in part out of public funds are covered by the Maryland Prevailing Wage Law. The State must also fund 50% or more of the project for the Prevailing Wage Law to apply.

Aside from the $500000 contract value threshold, federally-awarded projects, such as work on military bases and on Postal Service buildings, are covered by the Davis-Bacon Act (DBA) instead. In this regard, Certified Payrolls and other obligations should be directed to the proper federal agency.

The Maryland Prevailing Wage Law only applies to contracts awarded by the state or by political subdivisions within the state or by a regional school board. Examples of projects would include schools, airports, and public buildings. In this regard, Certified Payrolls should be filed with the Commissioner of Labor and Industry.

How are wage determinations made in Maryland?
Wage determinations list the wage and fringe benefit rates for each trade or classification in a given locality.

Prevailing wage means the basic hourly rate of pay and the fringe benefit rate. The prevailing wage rate is determined by the Commissioner of Labor and Industry. The determinations are established through a survey done for each of Maryland’s 23 counties and Baltimore City.

Prior to the bidding process, a copy of the wage determination issued for the project should be provided by the concerned public body. The prevailing wage determination should be posted in a prominent manner and should be in an easily accessible place at the worksite. The postage should remain for the full time any worker is employed under the contract. The prevailing wage rate at the start of the work remains in effect for the entire duration of the project, despite any changes in wage rates listed.

If you are unsure as to which classification you should use, speak to the investigator assigned to your project by contacting the Prevailing Wage Unit under the Division of Labor and Industry at (410) 767-2342.

Note that foremen who are performing work should be paid the prevailing rates of pay in the classification for that work.

Are there any regulations on paying apprentice rates in Maryland?
Under Maryland’s Prevailing Wage Law, an unskilled or inexperienced employee can only be paid the apprentice rate the employee is registered with the Maryland Apprenticeship and Training Council, and is approved by the Bureau of Apprenticeship and Training of the US Department of Labor. If they are not registered and approved, the employee should be paid the general prevailing wage rate.
What are the options for workers who feel they have been underpaid?
Workers who believe they have not been paid appropriately can contact the Prevailing Wage Unit of the Maryland Division of Labor and Industry at 410-767-2342 or 410-767-2365.
What records should public works project workers keep?
Workers are responsible for keeping a record of their hours. They should also save their pay stubs to help in the verification of wages received.

If a work is performed under more than one classification, the worker should also identify at what time of day he or she was specifically performing various jobs, and indicate the total hours worked in each.

How are fringe benefits discussed under the Maryland Prevailing Wage Law?
To meet the prevailing wage fringe benefit range, there are many types of fringe benefits a company may take credit for. These include medical coverage, dental coverage, pension or retirement plan, paid time off in vacation, holidays or sick days, or life insurance. Items such as company vehicles, lodging reimbursement or other company-provided tools cannot be credited towards the prevailing wage. Statutory deductions (unemployment insurance, income tax, etc), Workers’ Compensation Insurance, or any portion of the fringe benefit deducted from the employee’s pay cannot be credited towards the prevailing range.

The cost per hour of the fringe benefits is calculated by dividing the annual cost of the benefits by 2080 hours for each employee.

Are all contractors in Maryland required to have a license?
Any person or business organization is required to obtain a construction license from the appropriate Clerk of the Circuit Court annually. You can contact the appropriate Clerk of the Circuit Court in the county where the work will be performed or the Maryland Business Licenses Online website here.
How is “credit” for the A&T Fund calculated?
Contractors on a Maryland prevailing wage project, as well as subcontractors with a contract amounting to $100,000 or more must pay $0.25 per hour each employee under a registered apprenticeship program, or to the State Fund.

The employer may use payment of an annual or semi-annual tuition payment to a registered program on behalf of an apprentice to meet the obligation on that particular employee. The tuition payment should correspond to the time when the work is performed. Any accounting issues should be resolved between the apprenticeship program and the contractor; that is, the employer and the apprenticeship program should ensure that the tuition amount is at least equal to $.25 per hour for that employee in the covered craft.

Prevailing wage contractors are not liable for work done before the tuition payment was made. Likewise, an employer is prohibited from using tuition payment as credit for a job performed beyond the time the tuition payment was made.

What are the consequences to failing to comply with the Maryland prevailing wage law?

Failing to comply with Prevailing Wage Law means certain liabilities. If the Commissioner determines that the contractor has paid less than the appropriate prevailing wage rate, the contractor is liable to pay employee restitution. The contractor can also be liable for liquidated damages for the failure to provide proper pay. In that instance, the contractor may be liable for $20 per laborer per day. Starting October 1, 2016, prevailing wage contractors may be held liable for any increase in liquidated damages. The employer may be ordered to pay $250 per day for each prevailing wage worker if it is found that the employer knew or would have reasonably known that he is required to pay the prevailing wage rate, and that he deliberately failed or refused to do so. To determine whether a prevailing wage contractor knew or reasonably should have known of the obligation, the following are considered by the Commissioner:

  • Previous violations of the
  • Prevailing Wage Law by the contractor
  • Refusal or failure to produce certified payroll records
  • Refusal or failure to cooperate with an investigation by the Commissioner
  • Evidence of the contractor properly paying certain employees while not paying others the proper prevailing wage rate

Any other evidence of the contractor’s actual knowledge, deliberate ignorance or reckless disregard of the requirements of the law

After investigation, the Commissioner will inform the contractor in writing of the failure to pay the prevailing wage rate. If the contractor informs the Commissioner of an unwillingness to pay, or if the contractor fails to respond to the request within a reasonable timeframe, then the contractor would be considered as deliberately failing or refusing to pay.

Finally, prevailing wage contractors who violate such provisions are subject to administrative fees and penalties. They may also be prohibited from engaging in future public works projects.

LEARN MORE ABOUT MARYLAND PREVAILING WAGE WITH ARCHER JORDAN

Administrative fees and penalties, as well as the possibility of being prohibited from future projects, should be more than enough motivation for government contractors and subcontractors to comply with the Maryland Prevailing Wage Law. Aside from that, clear and dedicated compliance with the law can make business with the government easier and more profitable.

Here at ARCHER JORDAN, you can trust our decades of experience to help ensure your compliance with the Maryland Prevailing Wage Law and contract success.