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Frequently Asked Questions - Prevailing Wage

Overview

1. What is the Maryland Prevailing Wage Law?

The Maryland Prevailing Wage Law applies to certain contracts for public works and requires that contractors and subcontractors pay the employees performing work on the public work a prevailing wage rate that is established by the Commissioner of Labor and Industry.

2. What are some examples of a public work project?

A public work is a structure, including but not limited to, a bridge, building, road, water work, or sewage disposal plant that is constructed for public use and benefit and is paid for in whole or in part with public money. Public work projects can include energy infrastructure projects such as solar panels, broadband installation and installation of electric car chargers.

3. When does the Prevailing Wage Law apply?

The Prevailing Wage law applies to a public work project including school construction where the contract value is $250,000 or greater and (1) the State or an instrumentality of the State is the contracting body and there is any State funding for the project; (2) a political subdivision is the contracting body and 25% or more of the money used for the construction is State money; or (3) a political subdivision is the contracting body for the construction of an elementary or secondary school and 25% or more of the money used is State money. In addition, the prevailing wage law also applies to mechanical service contracts whose value is $2500 or greater.

4. How are public work projects classified as either building or highway?

While the Maryland Prevailing Wage law does not define these terms, the Prevailing Wage Unit generally follows Davis-Bacon Act guidance with regard to the scope of these categories. The “highway” category in Maryland also includes construction that would be classified as “heavy” construction under the Davis Bacon Act, such as dredging, bridges, water, sewer, and utility work and infrastructure.

5. Are Investor-Owned Underground Gas/Electric Utility Construction projects covered by the Prevailing Wage law?

No. These projects are not covered by the Prevailing Wage law, but require contractors and subcontractors, including traffic control service providers, to pay the Prevailing Wage rate determined by the Commissioner of Labor and Industry. See https://labor.maryland.gov/labor/prev/investorownguidance.shtml

6. Are public work projects funded by grants covered by the Prevailing Wage law?

It will depend upon the funding source. A capital project that receives State funds in the annual State capital budget as a local House of Delegates or local Senate initiative is excluded from coverage under the prevailing wage law. If you have questions about a project funded by a grant, you may contact the Prevailing Wage Unit at dldliprevailingwage-labor@maryland.gov or 410-767-2342.

7. What is the Davis-Bacon Act and how does it relate to the Maryland Prevailing Wage Law?

The Davis-Bacon Act is a federal law that requires contractors and subcontractors to pay federal prevailing wage rates on federally funded or assisted contracts in excess of $2,000. Like the Maryland Prevailing Wage law, the Davis-Bacon Act requires contractors and subcontractors to pay covered workers the locally prevailing wage and fringe benefit rates and, in the case of a David-Bacon project, the locally prevailing wage and fringe benefit rates are established by the United States Department of Labor. If there is $2,000 of federal funds on a public works project as well as State of Maryland money, the project will be a Davis-Bacon project and the U.S. Department of Labor will monitor prevailing wage compliance. Employers performing work on a Davis-Bacon project do not file their certified payroll records with the State. If you have questions about Davis-Bacon, here is a link to the U.S. Department of Labor FAQs: https://www.dol.gov/agencies/whd/government-contracts/construction/faq

8. What is a “locality” for purposes of the Prevailing Wage Law?

A “locality” is the jurisdiction - either a county or Baltimore City - in which the work is to be performed. If the public work is located in two or more jurisdictions, the locality includes all counties in which the public work is located.

Survey/Wage Rates

9. What is the Prevailing Wage survey?

Once a year in the fall, the Commissioner conducts a wage survey by soliciting payroll information from contractors, contractor associations, labor organizations and other interested parties. See here for more information. The survey asks for wage data for all classifications in all counties, and that data is used to determine the rates. You do not have to be a prevailing wage contractor to participate in the survey. Survey data may be submitted for work performed by all classifications, regardless of whether the work was performed in connection with a prevailing wage project. Data submissions for underground utility projects should be submitted under the “Highway” category in the survey. If you would like to participate in the survey or want additional information about the survey process, contact the Prevailing Wage Unit at dldliprevailingwage-labor@maryland.gov or 410-767-2342.

10. Why should I participate in the survey?

The survey process relies upon information voluntarily submitted during the survey period. Higher levels of participation help to ensure accurate prevailing wage rates. Participation is crucial in the survey process. Please see here for additional information about the survey. Please note that although you need not be a prevailing wage contractor to participate in the survey, you must register in our prevailing wage database to obtain notice of the survey and related communications, and to participate in the survey. Data submissions for underground utility projects should be submitted under the “Highway” category in the survey. Please contact the Prevailing Wage Unit to participate at dldliprevailingwage-labor@maryland.gov or 410-767-2342.

11. When does the survey open and how long is it open?

The survey opens on September 1 of each year, and submissions are accepted through October 31.

12. What payroll data may be submitted for consideration in the survey?

As provided in COMAR 21.11.11.03.E.(2), any payroll information submitted must be for work performed within the 12-month period ending on August 31 of the year in which the survey is conducted (i.e., the period September 1 of the preceding year through August 31 of the survey year). Payroll data submissions for work performed outside that period will be excluded from the survey.

13. How do I submit payroll data for consideration in the survey?

Submissions of payroll data should be made electronically here. Payroll data forms are available to assist in gathering information for the submission. Submissions must contain all relevant information to be considered in the survey.

14. Must I be registered in the prevailing wage system to submit payroll data for consideration in the survey process?

Yes. Please register at the portal.

15. May I submit collective bargaining agreements for consideration in the survey process?

Yes. As provided in the COMAR 21.11.11.03.C.(2), copies of signed, current collective bargaining agreements will be accepted, if submitted with a completed attestation form.

16. Is the information submitted in the survey subject to verification?

By submitting data in connection with the survey, a submitter is attesting to the accuracy of the data reported to the Commissioner. Please ensure that you retain any and all underlying materials supporting your survey data submission. At the direction of the Commissioner, submissions will be subject to audit to ensure that the data used in determining the prevailing wage is sound.

17. In responding to the annual wage survey, what should I consider to be fringe benefits?

Fringe benefits are: (1) The hourly rate of contributions irrevocably made by a contractor or subcontractor to a third party under a bona fide fringe benefit fund, plan, or program that provides health insurance; retirement, disability or death benefits; or unemployment life or accident insurance; insurance or compensation for occupational injury or illness; vacation and holiday pay; subsidies to defray costs of apprenticeship or other similar programs; or other bona fide fringe benefits; or (2) The hourly rate of costs incurred by a contractor or subcontractor that may be reasonably anticipated in providing bona fide fringe benefits under an enforceable commitment to carry out a financially responsible plan or program that was communicated to the workers in writing. A contract may include the actual cost of health and dental insurance, pension or retirement plan, paid time off such as vacation or sick days and life insurance. To calculate the cost per hour, divide the annual cost of benefits by 2,080 hours for each employee.
Payments required by federal, State or local law are not included in the fringe benefit calculation. These include, but are not limited to, payments required to fund Social Security, unemployment compensation and workers’ compensation programs. In addition, other benefits such as the use of a company vehicle, cell phones, lodging reimbursement, and company owned tools may not be credited toward the fringe benefit amount.

18. How are prevailing wage rates calculated?

For both the basic hourly rate and fringe benefit rate, the Commissioner looks at whether the prevailing wage is the wage paid to 50% or more of the workers in a classification in the locality on projects similar to the proposed public work. If fewer than 50% of the workers in the locality working in the same classification receive the same rate, the prevailing wage rate is the rate paid to at least 40% of those workers, or if fewer than 40% receive the same rate, the rate is calculated through a weighted average..

19. In calculating the rate paid to 50% of workers in a classification in a locality, do wage variations in collective bargaining agreements (e.g., graveyard shift premiums, foreman premiums) get counted toward the modal rate?

Wage variations such as shift differentials or premiums are not counted when determining the rate. The goal is to identify the base hourly rate that prevails in the locality.

20. When is the public notified of the survey results and how long are the rates in effect?

The Commissioner will publish the rates from the annual survey on or about December 1st. The rates are in effect for one year from the date of issuance. Here is a link to access the wage rates: https://www.dllr.state.md.us/PrevWage/web/content/PWRequestRates.aspx

21. Is there a list of classifications included in the survey?

A current list of classifications can be found in the Prevailing Wage Unit public portal in the “Related Data” tab, and titled “Active Classifications List.” Please consult the craft crosswalk on the prevailing wage portal if help is needed in matching a job to a classification in the survey. Please contact the Prevailing Wage Unit if you have further questions.

22. Is there a process for determining whether a new classification should be established?

Yes. However, this process (which is called a "conformance" under federal prevailing wage law) is limited in nature. It is used to establish a new classification only when the work performed by the proposed new classification falls outside the scope of work of any other existing classification(s).

23.What kinds of information should I provide to propose the establishment of a new classification?

Please contact the prevailing wage unit at dldliprevailingwage-labor@maryland.gov to discuss the issue and receive any specific guidance. As a general matter, for any proposed new classification, it will initially be helpful to have as thorough an understanding as possible of the job duties performed by the proposed new classification. A written, detailed description of the work performed should be submitted by the requestor, substantiated with documentation such as, job descriptions, task lists and responsibilities, unique tools or techniques used by the proposed classification, work structure (crew composition or organization), etc. If the requestor contends that this classification is part of an "area practice" in the industry, evidence of that practice in the specific jurisdiction or jurisdictions in which the classification is sought to be established should be provided. It is also helpful to provide hourly wage and fringe rate information for the classification (again, for each jurisdiction in which the classification is sought to be established), as that may demonstrate the skill level of the proposed classification relative to other existing classifications. Under the federal process, the requestor must also include the views of other interested parties, including any prime contractor, and any workers and/or worker representative(s) if known. Although the Department’s process is not as formal, information concerning any potential areas of agreement or disagreement is helpful, if that information is known. Finally, a rationale for establishing the new classification (meaning an explanation of why you think the work performed lies outside the scope of work performed by existing classifications) is helpful in the Department’s consideration of the issue.

24. What wage information should be submitted in the survey?

The wage and fringe benefit rates reported must reflect the actual wage rate and the actual fringe benefit paid to a given identifiable worker during the identified payroll week for work performed on the qualifying project in the reported classification. COMAR 21.11.11.03(c). The wage rate reported must be the straight-time rate actually paid for the work performed in the reported classification, not including overtime, differentials, “travel” rates, “training” rates, holidays or any pay for time not worked, other supplement or reduction.

25. Does the survey require that the specific project be identified?

Yes. A submission must identify the specific project on which the work was performed. COMAR 21.11.11.03(c). A general description of the type of project will not be accepted.

26. Are there limitations on the types of projects for which payroll data may be submitted?

Yes. Data from residential projects is not considered in the survey process. Data from out-of-state projects is also not considered in the survey process. In addition, projects and payrolls submitted must meet the requirements for recency, as explained further below.

27. Will payroll data for work performed under master (or on-call or task-based) contracts be considered?

Yes. A master contract is considered a single contract for purposes of the prevailing wage survey. Required information about the contract should be entered. Only one week of data for each classification may be submitted. The contract and the payroll data submitted must be within the required time-frames to be considered.

28. Must the project be current or recently completed?

Yes. Only information concerning projects that are either under construction at the time of survey or which were completed between March 1 and August 31 will be considered.

29. Does the wage information have to be from a single payroll period?

Yes. A submitter must choose a single payroll period during the performance of the qualifying project to submit data for a given classification.

30. Must payroll data be recent?

Yes. For this year’s survey, only payroll data for work performed within the 12-month period ending on August 31 (i.e., the period September 1 through August 31) will be considered.

31. Does a submitter have to enter each worker’s wage information separately?

Unless workers received identical rates, both wage and fringe, each worker’s payroll information will have to be entered separately. However, if more than one worker in a given classification on a given project during the selected payroll week was paid the identical wage and identical fringe rates, a submitter need not enter each worker separately. In this circumstance, the submitter may enter the total number of workers in the classification receiving that rate and fringe.

32. What if work was performed on the same project in multiple jurisdictions?

For each qualifying project, a submitter must select a single payroll week for each classification, and enter information only for that pay period. If work was performed on the same project in multiple jurisdictions, the submitter must select a single payroll week for each classification in each jurisdiction.

33. Can a submitter aggregate or average wage information as part of the survey?

No. The law requires the calculation of rates based on the percentage of workers receiving the rate. See §17-208(b)(1), Md. Code Ann., State Finance and Procurement Article. A submitter may only submit an entry for more than one worker if all of the workers whose information is part of the entry receive the identical hourly wage rate and fringe benefit amount on the project during the selected payroll week. Averaged or aggregated wage data should not be submitted, and will be excluded from consideration in the determination.

34. How should I submit survey data for a worker who performed tasks of multiple classifications on the project in the chosen workweek?

Payroll for a worker may only be submitted under one classification on a given project. If a worker performed tasks of different classifications on the project during the chosen workweek (and those tasks were not incidental to the worker’s primary classification) the worker’s data should be reported under the classification whose tasks comprised the majority of hours for the chosen workweek.

35. How much wage data per classification does the Commissioner need in a locality to issue a rate for that classification?

The Commissioner may set a rate based on a single valid submission for the locality in a given classification.

36. How are localities grouped for purposes of determining whether survey data can be borrowed when there is not sufficient wage data for a classification?

Currently, the Prevailing Wage Unit has 6 groupings: Group 1: Baltimore City, Baltimore County, Anne Arundel, Carroll, Harford, and Howard. Group 2: Dorchester,Somerset, Wicomico, Worcester. Group 3: Calvert, Charles, and St. Mary’s. Group 4: Caroline, Cecil, Kent, Queen Anne’s, and Talbot. Group 5: Frederick, Montgomery, Prince George’s. Group 6: Allegany, Garrett, and Washington. These groups are periodically examined and may be updated.

37. What should I do with the data backing up my survey submission?

Please keep all of the data pertaining to your submission close at hand, as you will need to produce it promptly if audited.

38. What should I do if I know I made an error in my survey submission?

Please contact the prevailing wage unit at prevailingwage@dllr.state.md.us, and provide the receipt for your submission and an explanation of the information you wish to remove.

39. What should I do if I receive an audit request from the Prevailing Wage Unit?

Please provide a full response within the requested time frame. The survey period is limited, and thus time frames for responding are short. Failure to respond fully within the time frame will result in exclusion of the audited submission(s).

40. What happens if a submission does not comply with the submission requirements or it contains invalid or inaccurate data?

A submission with incomplete or inaccurate information or that otherwise does not comply with the submission requirements will be excluded.

Wage Determination

41. What is a wage determination?

A wage determination lists the prevailing wage rates and fringe benefit rates for each classification of laborer and mechanic that the Commissioner has determined are prevailing in a given locality. The public body should provide a copy of the wage determination to prospective bidders prior to commencement of the bid process.

42. How do I obtain a wage determination?

A public body will request a wage determination from the Commissioner prior to advertising for bids or proposals for a public work contract. Once the wage determination is issued, interested parties can request a copy of the determination from the public body or by contacting the Prevailing Wage Unit at dldliprevailingwage-labor@maryland.gov or 410-767-2342. Informational prevailing wage rate are available to the public on the Department’s website: https://www.dllr.state.md.us/PrevWage/web/content/PWRequestRates.aspx

43. What happens if the wage determination does not have all of the classifications of work that a contractor intends to use on a project?

If a wage determination is issued and does not contain all of the classifications of work that a contractor believes will be performed on the project, the contractor should contact the Prevailing Wage Unit prior to commencing work at dldliprevailingwage-labor@maryland.gov or 410-767-2342.

44. Is it possible that more than one wage determination could apply to a public work project?

Yes. Public work projects are generally classified as either building or highway. However, in some limited circumstances, there may be situations in which the category of the project is unclear. In these circumstances, please contact the Prevailing Wage Unit at dldliprevailingwage-labor@maryland.gov or 410-767-2342 for assistance. Further guidance on this issue can be found at https:// www.dol.gov/sites/dolgov/files/WHD/legacy/files/memo-131.pdf.

45. What is the process for challenging a prevailing wage determination?

There is a detailed summary on the challenge process on the Prevailing Wage Unit’s portal page. Here is a link to the summary: or.maryland.gov/labor/prev/prevchallengingprevailingwage.pdf

46. Is there a requirement that prevailing wage rates be posted?

Yes. The wage determination must be posted in a prominent and easily accessible place at the work site and it must remain posted for the duration of time that any covered employee is working on the project.

Prevailing Wage Rates

47. What happens if the prevailing wage rates change after I have submitted my bid or started work?

The Prevailing Wage rate in effect at the time the work begins remains in effect until the project is complete.

48. When can the apprentice rate be paid?

An individual employed as an apprentice may be paid a lower wage rate than the prevailing wage rate on the wage determination only if the individual is employed and individually registered in a bona fide apprenticeship program registered with the Maryland Apprenticeship and Training Council and approved by the U.S. Department of Labor, Bureau of Apprenticeship and Training. If you have questions about whether an individual meets these criteria, you can contact the Maryland Apprenticeship and Training Program, (410) 767-2246 or email info@mdapprenticeship.com.
If an apprentice on a covered project has not been properly registered in a registered bona fide apprenticeship program, the apprentice must be paid the applicable wage rates for laborers and mechanics employed on the project performing in the applicable classification. This applies regardless of the classifications that may be listed on the certified payrolls and regardless of their level of skill.

49. How is overtime calculated under the Prevailing Wage law?

Overtime pay is calculated based on the employee's "regular" rate of pay. If the hourly rate paid by the employer is higher than the basic hourly rate in the prevailing wage determination, overtime wages must be determined using that rate. Whether the hourly rate is actually the employee's "regular rate" of pay or cash in lieu (in which case it is excludable) is a fact specific question.

Overtime rates are required to be paid by the contractor and any subcontractors under a contract and agreement with their employees which in no event shall be less than time and one-half the prevailing hourly rate of wages for all hours worked in excess of ten (10) hours in any one calendar day; in excess of forty (40) hours per workweek; and work performed on Sundays and legal holidays. For example, if an employee worked 12 hours one day but only 35 hours for the week, the contractor would be required to pay the employee 2 hours of overtime. If an employee worked under 10 hours each day, but still worked 42 hours in the week, the contractor would still be required to pay 2 hours of overtime.

50. When can an employer take a credit against the fringe benefit amount?

The employer must pay the full basic hourly rate and fringe. If an employer takes a credit against an excess fringe of up to 20% of the basic hourly rate but it is still less than the full basic hourly rate in the wage determination, the employer must pay the difference. The credit permitted under this regulation is capped at 20% of the applicable basic hourly wage rate. If, after that cap is applied, the basic hourly rate is still less than the wage rate set in the wage determination, the employer must pay the difference.

51. In calculating the hourly rate for fringe benefits, what are the standard annual hours worked for a full time employee?

The Commissioner utilizes 2,080 hours for the standard annual hours worked.

52. Does the Commissioner accept a request to approve a self-funded fringe benefit plan?

The Commissioner will accept a request to approve a self-funded fringe benefit plan under the Maryland Prevailing Wage law if the plan has been approved by the U.S. Department of Labor.

Prevailing Wage Coverage

53. Is a truck driver who is hired by a material supplier to deliver materials to and from a worksite covered by the Prevailing Wage law?
In general, a trucker who hauls materials or supplies to and from a worksite is not subject to the Prevailing Wage law. However, a laborer or mechanic who hauls materials within a worksite is covered by the Prevailing Wage law.

State Apprenticeship Training Fund

54. What is the State Apprenticeship Training Fund ?
The State Apprenticeship Training Fund is a special fund established in Section 17-602 of the State Finance and Procurement Article to improve and expand apprenticeship training in the State.

55. When are apprenticeship contributions required?

Contractors and subcontractors performing work valued at $100,000 or more on a public work project covered by the State prevailing wage law must contribute $ 0.25 per hour for each employee in each covered craft who is employed by the contractor or subcontractor on the covered project regardless of whether they employ apprentices on the project. The contribution must be made either (1) to a registered apprenticeship program, or to an organization that has registered apprenticeship programs, or (2) to the State Apprenticeship Training Fund.

56. How does a contractor or subcontractor report apprenticeship contributions?

The contributions of $0.25 are required to be reported by the contractor or subcontractor(s) in the Division of Labor and Industry's electronic certified payroll reporting system. The State Apprenticeship and Training Fund is administered by the Maryland Apprenticeship and Training Program. For more information, visit the Maryland Apprenticeship and Training Program website.

57. What notices and verifications are required in connection with the State Apprenticeship Training Fund law?

Contractors and covered subcontractors are required to provide subcontractors with the following notice:

  • Notice: Contractors or subcontractors who hire subcontractors to perform work valued at $100,000 or more on a covered project must provide written notice that (1) the subcontractor is performing work valued at $100,000; (2) they are required to register online with the Division of Labor and Industry, Prevailing Wage Unit; (3) they are required to complete the project log information and (4) they are required to make contributions consistent with the State Apprenticeship and Training Fund law.

  • Verification: In addition, a covered subcontractor must provide written verification that (1) they participate in an apprenticeship training program for each covered craft in which it will employ persons for the covered project; and (2) that they will either make payments to the State Apprenticeship Training Fund, or will make payments to a registered apprenticeship program or organization that has registered apprenticeship programs.

58. How long must notice and records be retained?

Contractors and covered subcontractors are required to retain a copy of the written notice provided to subcontractors for 3 years after the completion of their work on the public work project.

59. Are apprenticeship and training fund contributions considered permissible deductions from employee pay? From the fringe benefit amount?

Apprenticeship and training fund contributions are not permissible deductions from an employee’s pay but may be counted toward the fringe benefit amount. Note that apprenticeship and training fund contributions are required to be paid for every worker on the project – not just apprentices – for every hour worked. See
https://labor.maryland.gov/employment/apprfund/apprfundfaqs.shtml#:~:text=However%2C%20if%20there%20are%20no,contribution%20to%20your%20sponsor%20program.

Miscellaneous Questions

60. Are contractors required to have a license?

Any person or business organization performing construction work is required to obtain a construction license from the appropriate Clerk of the Circuit Court in the county where the work will be performed or go to the Maryland Business Licenses Online website. Here is a link: https://www.dllr.state.md.us/license/oplinks.shtml. Workers performing certain types of work must also be licensed. See https://labor.maryland.gov/license/oplic.shtml.

61. Can corrections be made to certified payroll submissions?

The Prevailing Wage Electronic Certified Payroll System is a reporting system, not an accounting system. As such, all information entered cannot be deleted. To amend a payroll record, simply log into the system as usual and select "Amend" instead of "Certified." You can then enter the information that needs to be updated.
Please note that when an entry is made—whether it is an amended report or a duplicate entry—it will appear on the record. Each entry is timestamped, allowing you to identify the most recent entry.

62. How will the Commissioner determine if a contractor knew or reasonably should have known of the obligation to pay the prevailing wage rate and failed to do so?

If the Commissioner determines that a contractor knew or reasonably should have known of the obligation to pay the prevailing wage rate and the contractor deliberately failed or refused to pay the prevailing wage rate, the contractor may be liable for increased liquidated damages in the amount of $250 for each laborer or other employee for each day the contractor is in violation of the law.
In determining whether the contractor knew or reasonably should have known, the Commissioner will consider the following:

  1. Whether the contractor has any previous violations of the Prevailing Wage law;
  2. Whether the contractor refused or failed to produce certified payroll records;
  3. Whether the contractor refused or failed to cooperate with an investigation by the Commissioner;
  4. Whether there is evidence that the contractor is properly paying certain laborers or employees the appropriate prevailing wage rate while not paying other laborers or employees the proper prevailing wage rate; and
  5. Whether there is other evidence of the contractor’s actual knowledge, deliberate ignorance, or reckless disregard of the requirements of the prevailing wage law?

For additional information, contact:
Division of Labor and Industry
Prevailing Wage for State Funded Construction Unit
10946 Golden W Drive Suite 160
Hunt Valley, MD 21031
410-767-2342
e-mail: dldliprevailingwage-labor@maryland.gov
Ayuda en Español: Jose Ruiz, 410-767-2370