Montana labor news., 1936-02-27
ATTORNEY GENERAL
GIVES HIS OPINION ON
PREVAILING WAGES.
ON PUBLIC WORKS.
Published by j. M. Crosby,
Helena, Montana

February, ID, 1850.
1. 1t is incumbent upon the State
Highway Commission to penalize con-
tractors who fail to pay the prevailing
rate OF wages to workmen employed
on highway construction, maintenance
and repairing.
2. Prevailing rate OF wages is de-
fined and a method suggested for ia
cilitating the determination of that rate
by the State Highway Commission.
February 5, 1886.
In regard to the requirements of Sec.
l, Chapter l02, Laws of Montana, 1881,
that contracts let by the State High
way Commission for the construction,
maintenance and repair of highways
must contain a provision to the effect
that the contractor must pay "the
standard prevailing rate of wages in
effect as paid in the county seat of the
county in which the work is being per-
formed you have asked us to advise
you as to the method by which the
standard prevailing rate of wages in
effect, as paid in the county seat of any
county may be determined, and, like
wise, under what authority such deter
mination is to be made, at what time
and by whom the same is to be made.
Sec. 3 of the Act provides IF any
person, firm or corporation shall fail
to comply with the provisions of this
act the state, county, municipal or
school officers, who have executed the
contract shall retain five hundred
($500.00 OF the contract price as liqui-
dated damages for the violation OF the
terms of the contract and said money
shall be credited to the proper funds
Of the state, county, municipal or school
districts. In all contracts entered into
under the provisions OF this Act at
least five hundred dollars ($50000) Of
the contract price shall be withheld at
all times until the termination Of the
contract"
Under this section, it is clear that
the State Highway Commissioners, be-
ing the state officers who have exc
cuted the contract, must determine
what the standard prevailing rate Of
wages in the county seat is during the
time that the contract is being per
formed and if the Highway Commits
sion finds that the contractor has not
paid what it finds to be the standard
prevailing rate OF wages, it is manda-
tory upon the Commission to retain
$4,000 of the contract price is liqui-
dated damages (Ryan V. City of New
York, III N. Y. I'll, 278, 90. N. W.
500; Wright V. State Of New York, 223
N. Y. "A, l19 N. Y. 80; Morse v. De-
laney, 218 N. Y. S. ST, 128 Misc. Rep.
3l7.)
How is the standard prevailing rate
Of wages in effect as paid in the county
seat OF the county in which the work
is being performed to be determined?
1t must be determined upon the facts
which it is incumbent upon the State
Highway Commission, as an admins
trative board, to investigate. Ali that
this office may do is suggest certain
legal principles for the Commissions
guidance and which will assist in prop
erly determining the matter.
The term prevailing rate of wages"
has come to have a definition connota-
ton, or, as Mr.. Justice Cardoza, once
said "One finds it hard to believe
that a cliche so inveterate is devoid Of
meaning altogether. Campbell v. New
York City, 244 N. Y. 317, 155, N. E. 628,
reported in w. A. L. R. 1,474 and there
annotated) It is equally true, how
ever, that wages, particularly those Of
such numerous classes as laborers,
worknen, and mechanics tend to uni
formity and stability and so to an aver
age or ordinary rate, which varies
somewhat from place to place and
which Adam Smith speaks of Wealth
of Nations, Chap. Wild as the natural
rates Of wages at the time and place
in which they commonly prevail,
(Ruark v. International Union OF OPP
Grating Engineers 1920, 157 Md. 587,
l46 Att. 80l.
Accordingly, l think you will be we'll
within both the latter and the spirit of
the statute if you insist that the on
tractor pay his employees at a rate
equal to the charge for Oh valuation of
the daily toll OF a laborer, workman or
mechanic, as the case may be, at a
given labor, in a given industry, ac-
cording to the scale or standard of
money compensation generally received
or established by common consent or
estimation in the county seat Of the
county in which the work is performed,
at the time of its performance. (Ruark
v. International Union, supra.)
The fact that this charge or valua-
ton fluctuates does not make the defi-
milton given less operative. The courts
have held that labor has its market
value, and that market is subject to
economic pressures just like the mar
ket for commodities. The rise or fall
in these markets is one OF the risks
which the contractor takes when he
submits his bid. AS the Maryland
Court Of Appeals put it, in the Ruark
case, supra: 1T is not unreasonable
TO impute to a contractor the know
ledge which the nature of his bust
ness, and its prosecution, requires him
to possess, or which might have been
obtained by reasonable Investigation"
Section go Of the 1921 Labor Law of
New York is similar to our Chapter
102, Laws of Montana, 1881. In order
to assist your Commission in determin-
ing this matter and to make it easier
for you to arrive at decisions that are
reasonable and within the spirit and
Of the law, we recommend that
you insert in your contracts a provis-