Doesn’t the State Legislature Have Anything Better to Work On? | June 2024
ABC Keystone has been advocating to the legislature for prevailing wage reform for decades. The prevailing wage statute, established in the early 1960s, has remained unchanged since its inception. Despite the significant increase in construction costs over the years, the threshold triggering prevailing wage for government-funded projects has remained stagnant at $25,000. Consequently, even minor repair and maintenance work now incur prevailing wage rates for the state, school districts, and municipalities.
However, recent legislative action, represented by HB 2153 and SB 841, focuses not on adjusting the threshold amount, but on amending specific aspects of the Prevailing Wage Act. First, these bills aim to restrict what is known as the “split rate.” Currently, workers can be compensated based on the tasks they perform. For example, a carpenter who also works with rebar could be paid at both carpenter and iron worker rates. The proposed amendment would require separate workers for each task, hindering efficiency.
Second, the amended language seeks to expand prevailing wage payment requirements to include offsite work specific to the job, affecting numerous components in commercial and industrial construction.
This change would add complexity to contractor administration and increase construction costs.
Remarkably, both Democrat and Republican Senators on the Senate Labor & Industry Committee, with the exception of one lone Republican, voted in favor of these bills. Despite inquiries about the problem these bills aim to solve, the only rationale provided was to increase onsite work and limit individual task flexibility, sacrificing efficiency and innovation.
If these bills pass and become law, two outcomes are inevitable: prevailing wage practitioners will adapt, passing increased costs to end-users, and contractors not primarily engaged in prevailing wage projects will likely shift focus to private work, reducing competition and raising prices.
Ultimately, these legislative changes will restrict project capabilities for the state, school districts, and municipalities, leading to either reduced project scopes or increased taxes to fund necessary projects. While certain businesses may remain unaffected, the burden of legislation like HB 2153 and SB 841 falls squarely on the shoulders of every taxpayer in the Commonwealth. It begs the question: doesn’t the state have more pressing issues to address?
