The PA Chamber today hailed a recent state Supreme Court ruling as a significant victory for taxpayers and employers in the ongoing debate over the application of the Commonwealth’s Prevailing Wage Act. The decision, which upheld a 2022 Commonwealth Court ruling in the case of Ursinus College v. Prevailing Wage Appeals Board (PWAB), reinforces the longstanding interpretation of the law.

The case involved a construction project undertaken by Ursinus College, a private school based in Montgomery County, which a union argued should be subject to the Prevailing Wage Act, which mandates workers on public projects be paid a pre-determined wage that is often artificially inflated and can significantly increase costs.

In June 2021, the PWAB ruled in favor of the union, agreeing that prevailing wage rules applied, despite the school’s private status, because the project was financed by bonds issued by the Montgomery County Higher Education and Health Authority.

The PA Chamber coordinated a coalition of leading industry associations in submitting amicus briefs to both the Commonwealth Court and Supreme Court over the last few years. The associations expressed concern that the PWAB decision, if upheld, would harm communities, economic development, and employers from a range of industries.  Their brief argues prevailing wage is only intended to apply when the public entity has a close relationship to a project, either as a contracting party or funder.

According to the brief, “The Board’s holding essentially requires private entities to pay prevailing wage without obtaining the benefit of any public funding. The result is likely to be a reduction in private construction projects that affect the public good and a diminished role for municipal authorities.”

Other associations joining the brief included the PA Municipal Authorities Association, the PA Waste Industries Association, the PA Council of General Contractors, and LeadingAge PA, which represents providers of senior services.

The Commonwealth Court in 2022 overturned the PWAB and ruled against the union, citing our amicus brief throughout the decision and ultimately reaching the same conclusion espoused by the PA Chamber and other employer associations. The union appealed that decision to the state Supreme Court, which ruled last week, affirming the Commonwealth Court decision.