Stop Bipartisan Support to Expand Prevailing Wage
Senate Republican leadership is coordinating the advancement of legislation that ABC has long opposed. This week, leadership supported moving Sen. Farry’s (R-Bucks) SB 908 out of the Senate Labor & Industry Committee, where it received unanimous support. This is the second consecutive legislative session in which the bill has advanced. SB 908 mirrors Rep. Dawkins’ (D-Philadelphia) HB 846, which is also pending in the Senate.
These bills need to be stopped immediately, and your senator, along with Senate President Pro Tempore Kim Ward and Senate Majority Leader Joe Pittman, need to hear from you now.
Why are these bills a concern?
Both bills would:
- Eliminate the ability to “split rates” for appropriately classified work performed by an employee.
- Apply prevailing wage requirements to custom prefabrication, with exceptions only for precast concrete and steel in order to satisfy unions in those trades.
Ultimately, these policies would dramatically increase project costs, with taxpayers bearing the burden. For our industry, they would move construction practices back to the 1960s by forcing everyone to follow an outdated union business model. Any innovation that allows contractors to work more efficiently would effectively be prohibited.
The bills also assume they can be enforced across state lines and internationally, despite federal case law indicating otherwise. Legislative leadership has ignored the case law we have provided demonstrating this point. As a result, contractors could be held liable for penalties if a supplier outside Pennsylvania fails to pay prevailing wage somewhere within the supply chain—even without the contractor’s knowledge.
What are examples of these policies in practice?
An example of expanding prevailing wage to custom prefabrication would be an electrical contractor who cuts wire or assembles components before arriving on-site to save time. Under these bills, that work would be subject to prevailing wage requirements. In the case of modular construction, the assembly of building sections or room components would also be required to be paid at prevailing wage rates.
These are efficiencies that currently allow work to be completed safely, in less time, and in more controlled environments that benefit customers. Under HB 846 and SB 908, these practices would effectively be prohibited.
An example of the split-rate issue can be found by comparing construction practices from decades ago to those used today.
In the 1950s and 1960s, a construction specialist would wait for a laborer to move materials from the storage area to the work location. Once the materials arrived, the specialist would perform the work. Afterward, a laborer would return to move materials back to storage and clean the jobsite.
Today, specialists often move their own materials, perform their work, clean up the area, and return materials as needed. When they are performing laborer tasks, they are paid the laborer rate. When they are performing their specialty work, they are paid the specialist rate.
These bills would effectively prohibit that multitasking approach. As a result, projects would become more expensive and would likely take longer to complete.
What’s Next?
ABC, the business community, local government organizations, and taxpayer advocates must strongly oppose Senate efforts to advance this legislation with such overwhelming support.
These bills send a clear message to merit shop contractors that they are not welcome in Pennsylvania. Just as importantly, they demonstrate bipartisan support for policies that would increase costs for taxpayers on all prevailing wage projects.
To identify and contact your state senator, please visit: https://www.palegis.us/find-my-legislator.
Tell the full Senate to stop these bills now.
If you have questions or need assistance, please contact jim@abckeystone.org.