When working on a government contract, prevailing wage laws dictate how much your team will be paid. This figure varies depending on the laws in your state, but one thing is certain — prevailing wage laws can either be a boon or a curse depending on the current market conditions and details drafted into your contract.
In part one of this two-part series, the Nashville contractor attorneys at Cotney Construction Law explored the history of the eight-hour workday and common misconceptions about prevailing wage laws. In this section, we will continue to weigh the positives and negatives of prevailing wage laws and help you determine if your firm is suited for public projects.
Do Contractors Benefit from Prevailing Wage Laws?
Do prevailing wages prevent contractors from taking home higher earnings at the expense of unionized workers? While many believe this to be true, the fact is that prevailing wages have little effect on contractors because they can factor prevailing wages into the cost of their bid. In either case, unionized workers will acquire the rate of pay established as a result of collective bargaining, not the prevailing wage. When it comes to contractors and prevailing wages, the adage “nothing gained and nothing lost” illustrates their overemphasized relationship succinctly.
Repealing Prevailing Wage Laws
In many states, prevailing wage laws have already been repealed or replaced with different legislation. There are currently 22 states that do not have any form of prevailing wage laws including:
- New Hampshire
- North Carolina
- North Dakota
- South Carolina
- South Dakota
- West Virginia
A large portion of Republican legislators support repealing prevailing wage laws. In 2015, former Senate Majority Leader Scott L. Fitzgerald told the Daily Reporter that repealing prevailing wage laws could potentially cut costs on road projects and vertical construction. Support for repeal is derived from a belief that state and local governments will be able to get more in return for their construction tax dollars.
While there’s no definitive answer to whether or not prevailing wage laws help or hurt public construction, it’s impossible to deny the widespread pushback against these laws. Nearly half of the country has repealed or replaced their prevailing wage laws. As a result, you can argue that prevailing wages are an outdated ideology that no longer meshes with the needs of today’s construction workers. Prevailing wage laws were once used as a device to boost productivity and accountability, but today, these same laws are quickly becoming dispensable.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.