City of Pittsburgh Office of Controller Michael Lamb
Prevailing Wage Ordinance - Frequently Asked Questions

What is the Prevailing Wage Ordinance?

The Service Worker Prevailing Wage Ordinance, passed by Pittsburgh City Council, requires contractors who provide building service and food services to the City of Pittsburgh to pay prevailing wages to employees employed pursuant to such contracts, and to require that building service, food service, grocery and hotel employees employed on projects receiving City subsidies be paid prevailing wages.

Who is covered by the Ordinance?

  • Any employer who employs building service and food service employees for all work performed pursuant to a City service contract.
  • Any employer who employs building service, food service, hotel, or grocery employees for all work performed on or related to projects that will receive a City subsidy after April 3, 2010, the effective date of the Ordinance.

What is a City Contract?

Cities (and other local governments) employ private contractors to provide a range of services for the government and the public. The Service Worker Prevailing Wage Ordinance requires employers that perform city service contracts to pay their workers a “living wage” and to provide health benefits.

What are City Business Subsidies?

In order to attract or retain jobs in their communities, some cities offer taxpayer-funded business subsidies—usually in the form of grants, tax abatements or below-market bonds or loans—to employers that pledge to open or retain facilities in the community. The Service Worker Prevailing Wage Ordinance requires employers receiving city business subsidies to pay their workers a “living wage” and to provide health benefits.

What are Prevailing Wages?

The term refers to the establishment of the Basic Hourly Rate of pay plus the hourly benefits associated with the employee wages. Basic Hourly Rates are the actual take home amount while the hourly benefits are the intangible part of pay for items such as vacations, health plans and retirement funds.

What is the Davis-Bacon Act?

Enacted in 1931, the Davis-Bacon Act (DBA) is intended to protect communities and workers from the economic disruption caused by competition arising from non-local contractors coming into an area and obtaining federal construction contracts by underbidding local wage levels. The DBA requires that “each contract over $2,000 to which the United States or the District of Columbia is a party for the construction, alteration, and/or repair (including painting or decorating) of public buildings or public works shall contain a clause setting forth the minimum wages to be paid to various classes of laborers and mechanics employed under the contract.”

What is a Wage Decision?

Wage determinations are based on information obtained from studying local wage conditions and data. There are three sources of rate information to consider in determining prevailing wage: Bureau of Labor Statistics Market Rates, Local Collective Bargaining Agreement Rates, and Service Contract Act Rates. The wage decision specifies the higher basic hourly wage rates and fringe benefits determined to be prevailing for the described work classifications of a similar character and in specific localities comparison of the above three sources reveals that the highest rates applicable.

Who monitors prevailing wages?

The Pittsburgh City Controller reviews Prevailing Wages through payroll data that is submitted, on a yearly basis. A covered employer shall file the Federal Form WH-347 with the Controller by January 31st of the following calendar year. City Controller Auditors will also make on-site visits to various construction sites and conduct interviews directly with employees working on-site

What are the possible penalties for non-compliance with Prevailing Wage requirements?

Payment of money owed for project work can be withheld or reduced. The non-compliant contractor will be required to submit wage restitution to the effected employee(s). A habitual non-compliant employer is also subject to debarment from future contracting opportunities for up to 3 years. In extreme circumstances, the non-compliant contractor can face civil and criminal charges.

 

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