OLR Report 2013-R-0393 summarizes (1) the prevailing wage thresholds in other states, (2) how prevailing wage rates are determined, (3) prevailing wage rates in Connecticut and neighboring states, and (4) enforcement of Connecticut's prevailing wage law. It also summarizes any new prevailing wage laws Connecticut enacted in the past several years.
Prevailing wage laws generally require workers on public works construction projects to receive the same wage that is customarily paid for the same work in the project's town. Thus, if an electrician on a private-sector job in a particular town customarily receives $50 an hour in wages and benefits, a prevailing wage law would require an electrician on a public works construction project in the same town to be paid the same rate. By establishing a standardized pay rate for these workers, the laws aim to keep government's use of low bid contracting from significantly reducing the market price of labor.
Prevailing wage laws operate at the federal level, through the Davis-Bacon Act, and the state level, through an individual state's laws. The federal prevailing wage law applies to federally funded or assisted contracts over $2,000 for the construction, alteration, or repair of public buildings or public works. Thirty-two states, including Connecticut, have prevailing wage laws.
Generally, these laws only apply when a public works project's contract value meets or exceeds a pre-determined threshold amount. Connecticut's threshold has been $400,000 for new construction and $100,000 for remodeling projects since 1991. Its new construction threshold is the second highest in the nation, behind only Maryland's $500,000 threshold for all types of public works projects. Connecticut's remodeling threshold is the third highest in the nation, behind Indiana's ($350,000) and Kentucky's ($250,000), both of which apply to all types of public works projects. Since 2010, four states have increased their thresholds and one, Vermont, has lowered its threshold.
In Connecticut, prevailing wage rates are determined by the U.S. Department of Labor (USDOL). USDOL determines the rates by surveying contractors, contractors' associations, labor organizations, public officials, and other interested parties about the wages and benefits paid on completed construction projects in a particular geographical area. If it finds that the majority of workers in a particular occupation earn the same wage, that wage becomes the occupation's prevailing wage for that area.
A comparison of prevailing wage rates for six common occupations in Connecticut, Rhode Island, and nearby areas of Massachusetts and New York indicates that Connecticut's rates are generally in the middle and lower half of the rates paid in the six areas surveyed. In general, Connecticut's rates are $12.64 to $18.01 per hour lower than the highest rates paid to a particular occupation (usually in New York's bordering counties).
Connecticut law subjects contractors and subcontractors to both civil and criminal penalties for failing to meet the state's prevailing wage requirements. The law is generally enforced by the state Department of Labor (CTDOL), however the state's attorney's office can become involved in criminal prosecutions and the attorney general's office can become involved in civil suits to recover unpaid wages. Those who knowingly and willfully violate the law must pay fines between $2,500 and $5,000 and cannot bid on other prevailing wage projects for a certain period. They may also face criminal charges for a first degree false statement (a class D felony) and larceny.
The Connecticut General Assembly has not made any major changes to the prevailing wage law over the past five years. The three related laws that were enacted (1) specify how contractors must submit their certified payroll records; (2) allow contractors to sue subcontractors who failed to pay their workers prevailing wages, under certain circumstances; and (3) change the safety training requirements for certain workers on prevailing wage projects.
For more information, read the full report.
