Opinion ID: 2539485
Heading Depth: 2
Heading Rank: 1

Heading: Prevailing Wage Law

Text: Prevailing wage laws require contractors constructing government projects to pay their employees a wage equal to or greater than that which is typically paid to similar workers in the locality where the project is being built. 64 Am.Jur.2d Public Works and Contracts § 213. By requiring government contractors to pay their employees the locality's prevailing wage, these laws protect community wage standards and ensure that local contractors and laborers have an opportunity to compete for publicly funded projects. Universities Research Ass'n, Inc. v. Coutu, 450 U.S. 754, 773-74, 101 S.Ct. 1451, 67 L.Ed.2d 662 (1981). They also prevent government contractors from exploiting the labor which they employ. Cassady v. Board of Aldermen of City of Bowling Green, 277 S.W.2d 1, 2 (Ky.1955). Prevailing wage laws have been enacted by the federal government [2] and in the majority of states, including Kentucky. Ginny Wilson et al., An Analysis of Kentucky's Prevailing Wage Laws and Procedures, 3-4 (Dec. 13, 2001), available at http://www.lrc.ky.gov/lrcpubs/RR304.pdf. In the Commonwealth, the General Assembly has charged the Labor Cabinet (the Cabinet) with the duties of establishing prevailing wage rates and enforcing the prevailing wage law. See KRS 337.520(1); KRS 337.550.
For every locality in the Commonwealth, the Cabinet must set the prevailing wage rate for each classification of construction workers  from bricklayers to electricians to plumbers. [3] KRS 337.520(1). The prevailing wage for each type of construction worker in a locality includes two components: (1) the basic hourly rate paid to that type of worker; and (2) an hourly figure based on the fringe benefits  such as medical care, life insurance, and retirement benefits  provided by local employers to that type of worker. KRS 337.505. In setting the prevailing wage rates for each locality, the Cabinet must consider the wage rates paid on previous public works projects in the locality, the wage rates paid on comparable, private projects in the locality, and collective bargaining agreements relating to the locality. KRS 337.520(3). Whenever a government entity, known as a public authority, [4] wishes to construct a public works [5] project, it must contact the Cabinet and obtain the prevailing wage rates for each type of worker needed to complete the job. KRS 337.510(1). After the Cabinet provides it with a prevailing wage schedule, the public authority must incorporate the schedule into its bid documents and project specifications so that contractors bidding on the project are aware of the wage rates and may properly estimate their labor costs. See KRS 337.510(1). Once the contract is awarded, the prevailing wage schedule must also be incorporated into the construction contract itself. KRS 337.510(1). Additionally, the contract is required to contain a stipulation that the contractor and all of its subcontractors will pay no less than the prevailing wage. KRS 337.530(1).
In addition to setting prevailing wages rates, the Cabinet is also responsible for enforcing the prevailing wage law by ensuring that government contractors properly pay their workers. KRS 337.550. To this end, contractors and subcontractors working on prevailing wage projects are required to keep records indicating the hours worked by every employee in each classification of construction and the wages paid for that labor. KRS 337.530(2). For example, if an employee performs both pipefitting work and sheet metal work, his employer must maintain records noting the number of hours worked as a pipefitter and as a sheet metal worker and the wages paid for each type of work. These records must be made available for the Cabinet's inspection at any reasonable time. Id. If an employee performing work on a prevailing wage job believes that he has not been properly paid, he may file a complaint with the Cabinet. KRS 337.550(1). The Cabinet must investigate the worker's claims and, if appropriate, bring a legal action to assist him in collecting the back wages allegedly due from his employer. KRS 337.550. If the worker is employed by a subcontractor, the Cabinet may take action against either the subcontractor or the prime contractor, which is jointly and severally liable for any wages the subcontractor fails to pay. KRS 337.990(12). The Cabinet also has the power to penalize contractors and subcontractors that violate the prevailing wage law. KRS 337.990. The Cabinet may do so by issuing a citation describing the violations that occurred and imposing a civil penalty. KRS 336.985(3). The civil penalties assessed by the Cabinet can range from one hundred to one thousand dollars for each violation. KRS 337.990(12). If the contractor fails to pay the penalties within fifteen days of receiving the citation, the Cabinet must file a civil action to collect them. KRS 336.985(3). With this statutory framework in mind, we turn to the facts giving rise to TECO's claims.