Prevailing Wage and Project Labor Agreements

Prevailing wage laws require contractors on public projects to pay workers at least locally prevailing wage and benefit rates. Project labor agreements (PLAs) are pre-hire collective bargaining agreements between a project owner or contractor and construction unions that set employment terms for a specific project. Both tools are central to the agenda of the Building and Construction Trades Council.^[1]

1 Prevailing wage

Three layers apply. Federal projects follow the Davis-Bacon Act; state-funded public works follow the Pennsylvania Prevailing Wage Act of 1961^[3]; and the City of Philadelphia applies its own rules to city contracts. The city explains that a contractor with a public-works contract with the City must pay the prevailing wage, a pay package determined by the U.S. Department of Labor or by the City, to anyone performing work on that contract. The wage depends on the type of work (heavy and highway construction, building construction, service or residential) and on whether the contract is federal or City. Employers on City public-works contracts must meet the Davis-Bacon Act and Chapter 17-107 of the Philadelphia Code. Both the City and the federal government update their prevailing wage rates regularly, and the City posts its rates on phila.gov.^[1]

The rules are enforced by the Office of Labor Standards in the City's Department of Labor, which also negotiates with City unions and administers the worker-protection laws covered in Office of Worker Protections. The Department of Labor says it makes sure that employers with City contracts pay prevailing wages.^[1]

2 Project labor agreements

A project labor agreement is negotiated for a specific project, so its terms can differ from one project to the next: the owner or lead contractor and the building trades agree in advance on wages, hours, hiring and dispute procedures, and typically agree that no strikes or lockouts will occur during construction. Whether the City requires a PLA on a particular public project depends on the City's policy and on mayoral executive orders, which are posted on phila.gov under executive orders; current thresholds and requirements should be confirmed with the Procurement Department or the contracting agency before bidding. The trades' view of PLAs is described in Philadelphia Building and Construction Trades Council, and IBEW Local 98's website lists defending prevailing wage and project labor agreements among its political priorities.^[2]

3 Enforcement and how to report problems

The Office of Labor Standards monitors contractors on city public-works contracts, which must submit weekly payroll information through the LCP Tracker system to show they are paying the prevailing wage and must take part in job-site visits by wage compliance officers. A worker who believes there has been a violation can complete the city's prevailing wage violation form, ideally with pay stubs, personal records of hours worked and information about the employer's pay practices, and submit it by email to LaborStandards@phila.gov or by mail; the office can also be reached at 215-683-5492. The process is similar to complaints handled by the Office of Worker Protections. For contract bidding rules, see Understanding City Contracts and Bids.

4 The policy debate

Supporters, including unions, say prevailing wage and PLAs raise standards, support apprenticeships and ensure skilled workers, and that they promote diversity commitments associated with the trades; see Building Trades. Critics, including some open-shop contractors and fiscal conservatives, argue that they raise costs and limit competition. The effect on costs is disputed in academic literature, and the disagreement is not settled. See also Labor and Politics in Philadelphia.

See also: Organized Labor in Philadelphia, IBEW Local 98, Commerce Department.

References

1. City of Philadelphia, "Report a prevailing wage violation" and "City prevailing wage rates," phila.gov; Philadelphia Code, Chapter 17-107.
2. City of Philadelphia, Mayor's executive orders, phila.gov/departments/mayor/executive-orders; IBEW Local 98, "Politics," ibew98.org.
3. Pennsylvania Prevailing Wage Act of 1961 (43 P.S. section 165-1 et seq.); Davis-Bacon Act (40 U.S.C. section 3141 et seq.).