On June 25, 2021, the Pennsylvania Prevailing Wage Appeals Board issued a first-impression decision concerning the applicability of the Pennsylvania Prevailing Wage Act to construction projects at Ursinus College (a private liberal arts college in Collegeville, PA). The projects were financed by bonds issued by the Montgomery County Higher Education and Health Authority (the “Authority”).
What Projects Are Covered by the Prevailing Wage Laws?
In order for work on a construction project to be covered by the Pennsylvania Prevailing Wage Act (and thus require all workers on the job to be paid prevailing wages), four criteria must be met:
- The work is under contract;
- The work is construction work;
- The project is paid in whole or in part by the funds of a public body; and
- The estimated total project cost exceeds $25,000.
The Parties in the case agreed that elements 1, 2, and 4 were met. Thus, the only dispute was whether the project was paid for with public funds.
The financing arrangement in Ursinus was complex. The Authority issued bonds to the public totaling $23 Million. The Authority sold the Bonds to an underwriter, RBC Capital Markets, who paid for those bonds “to the order of the Authority.” However, according to other documentation, the bond proceeds were paid to the project Trustee, B.N.Y. Mellon.
The question then became, assuming the bond proceeds were never actually received by the Authority (indisputably a public body), but instead were received by the Trustee, were these bond proceeds “public funds” sufficient to trigger the contractors’ obligation to pay all workers on the project prevailing wages?
The Board Ruled that Proceeds of the Bonds Were Public Funds
The Board held that the bond proceeds were public funds and thus the contractors had to pay prevailing wages. The Board’s reasoning is as follows:
Ursinus’ and the Authority’s claims that the project was not covered by the Prevailing Wage Act were rejected because the financing for the project was generated by a public body for the purpose of paying for construction projects.
According to the court’s opinion*: “Although the Authority may not have directly paid for the projects, Ursinus would not have had this funding stream available but for the existence of the Authority and its coordination of the funding through its statutory powers as a public body.
“The fact that the funds found their way through financing processes and contractual relationships with the Trustee and Underwriter does not change the reality that the funds were only available because of the Authority’s statutory ability to issue the Bonds. The proceeds from the Bond sale did not lose their character as the ‘funds of a public body’ just because the monies journeyed through other nonpublic financial transactions. Penn National II, 808 A.2d at 889. Accordingly, workers on the Ursinus Projects were entitled to receive the appropriate prevailing wages as determined under the Act.”
*Source: https://www.pacourts.us/assets/opinions/Commonwealth/out/ 828CD21_8-4-22.pdf
The case is IN RE: Grievance filed by International Brotherhood of Electrical Workers, Local No. 98, Case No. PWAB-1G-2018 (Pa. Prevailing Wage Appeals Board June 25, 2021).
How Can I Learn More About Joining a Class Action?
If you worked on a bond-financed construction project and were not paid prevailing wages, please contact We Stop Wage Theft at 844-696-7492 (toll-free) or email us at [email protected]. You can also fill out the form on this page.
Do I Have to Pay Attorney’s Fees?
No. We Stop Wage Theft attorneys handle claims for unpaid wages on a contingent fee basis. In other words, the lawyers don’t get paid fees unless they get money for you.
* James Goodley (now Managing Partner at Goodley McCarthy LLC) argued the case for IBEW Local 98 (the Grievant in the case), while he was an associate at Jennings Sigmond, P.C.