By Zachary D. Morahan, Coughlin & Gerhart, LLP
“Prevailing wages” are the premium wage rates paid to employees who perform labor on a “public” project, often a construction or highway project. Employers in the construction trade know all too well that the failure to pay the correct prevailing wage can have dire consequences, regardless of whether it’s intentional or unintentional. The Appellate Division, 3rd Department, recently reaffirmed the need for employers that perform public project work to understand and pay prevailing wages.
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Background
In May 2008, Central City Roofing Company, Inc., contracted with a school district to install a new roof on a high school building. Central City commenced work on June 30, 2008, and completed the project in May 2009.
Central City paid its employees according to the wage rate schedule included in the project’s specifications. However, the wage rate schedule it used was valid only through June 30, 2008. Central City didn’t use the new wage rate schedule issued for July 1, 2008, through June 30, 2009.
Not surprisingly, a local labor union filed a complaint with the New York State Department of Labor (NYSDOL) claiming that Central City failed to pay prevailing wages. After an investigation and a hearing, it was determined that Central City’s use of the expired wage rate schedule constituted a “willful” failure to pay prevailing wages and supplements.