On Wednesday, April 2, the General Assembly approved the “Procurement – Prevailing Wage – Applicability” bill, which requires all school construction projects that cost over $500,000 and receive funding of 25 percent or more from the State to pay workers the “prevailing wage.” As the current law stands, local public works projects are not required to pay workers the prevailing wage unless the projects are funded by at least 50 percent from the State.
The bill (HB 727/SB 232) will make its way to Governor Martin O’Malley’s desk awaiting signature, after passing through the Senate on a 32-15 vote. Assuming the bill is signed into law by the Governor, it is likely to affect 10 of the 23 counties within Maryland, namely Anne Arundel, Baltimore, Calvert, Carroll, Garrett, Kent, Montgomery, Queen Anne’s, Talbot, and Worcester counties. The prevailing wage rates vary between each county and type of worker. For example, the prevailing wage rate for an electrician in Montgomery County is $40/hour, whereas the rate for an electrician in Carroll County is $35.10/hour. Ultimately, the State Commissioner of Labor and Industry determines the prevailing wage, which is meant to reflect wages commonly received in the area.
There is much debate between Democrats and Republicans on the effects of the new prevailing wage bill. Republican Senator Allan Kittleman of Howard County voiced his concern regarding the high labor costs for prevailing wage workers. “By adopting this legislation, we’re going to make it harder for our local school systems to build more schools,” Kittleman said. “We’re going to make it harder to have better quality in those schools and I just think it doesn’t make sense to encourage our school systems to pay more.”
However, Democratic Senator Thomas Mac Middleton of Charles County feels it is important to look past the costs on paper. According to Middleton, “[w]ith prevailing wage, you get more skilled workers and if you don’t get skilled workers you get the job training component vs. the non prevailing wage where you just don’t have that. Besides the dollar value, you have to look at … the millions of dollars the state of Maryland has dropped in job training.”
The prevailing wage bill, if signed into law, will take effect July 1, 2014, and will only apply to procurement contracts executed on or after that date.
UPDATE (May 6, 2014):
HB 727 and SB 232 were signed into law by Governor O’Malley on May 5, 2014.