The Pennsylvania Commonwealth Court issued a decision last week that was consistent with an amicus brief filed by the PA Chamber and a number of partners calling for the reversal of a Prevailing Wage Appeals Board (the Board) decision.
The case involves a construction project undertaken by Ursinus College, a private school based in Collegeville, Montgomery County. The International Brotherhood of Electrical Workers union brought legal action against the school arguing that the project should be subject to the Pennsylvania 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 Board 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.
Ursinus College appealed to Commonwealth Court and the PA Chamber submitted an amicus brief along with several employer associations including the PA Municipal Authorities Association, the PA Waste Industries Association, PA Council of General Contractors and LeadingAge PA, which represents providers of senior services.
The associations expressed concern that this 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.”
The Commonwealth Court decision, written by Judge Michael Wojcik, cited the amicus brief throughout the decision and ultimately reached the same conclusion espoused by the PA Chamber and other employer associations. The plaintiff has the opportunity to appeal to the Pennsylvania Supreme Court and the PA Chamber will continue to monitor this important case.