As a matter of public policy in Missouri, workers employed by or on behalf of any public body engaged in public works construction projects must be paid prevailing hourly wages. Wage rates are administered by the Missouri Department of Labor and Industrial Relations. Missouri’s Prevailing Wage Act is modeled after the federal counterpart, the Davis-Bacon Act, and is intended to prevent payment of substandard wages.
The Missouri Supreme Court reinforced these longstanding principles in a recent case, Utility Service Co. Inc. v. Department of Labor and Industrial Relations, finding that the act is remedial in nature and therefore all doubts are to be resolved in favor of applying it.
The ruling in this case could influence which construction projects will require payment of prevailing wages in Joplin as the city rebuilds after the May 22 tornado.
Construction vs. maintenance
The recent case centered on how much a contractor was obligated to pay its workers to repaint and perform other work related to a water tower in Monroe City. The state Supreme Court ruled that the work qualified as construction, which is covered by the act, rather than maintenance, which is not covered by the law, and as a result, the contractor had to pay higher wages to its workers.
The Supreme Court gave strong deference to the Missouri DOL, which deemed the work to be construction. Maintenance is defined as “the repair, but not the replacement, of existing facilities when the size, type or extent of the existing facilities is not thereby changed or increased” whereas construction includes “reconstruction, improvement, enlargement, alteration, painting and decoration, or major repair,” according to the act. The Supreme Court held that the term “maintenance” cannot be applied in a way that reduces the scope of what construction is defined as under the law. In this regard, construction can encompass work that occurs without any change to a facility’s size, type, or extent if the work is considered a “major repair.” The Supreme Court found that the scope of work of the contract at issue contained a combination of reconstruction, improvements, alterations and painting, and therefore the contractor was subject to the act’s higher wage rates.
Implications for Joplin
The devastation in Joplin has elevated the debate about the viability of the Missouri Prevailing Wage Act. Some legislators and lobbyists have campaigned for the suspension of prevailing wage laws during reconstruction in Joplin with the notion that lower wages and thus decreased cost of construction would expedite the city’s revitalization following the May 22 tornado. The common response, however, is that the absence of wage laws would violate workers’ rights to fair wages, and the workmanship of the construction would be sacrificed due to the absence of skilled laborers on site.
One thing remains very clear based on the Missouri Supreme Court’s recent decision. Although they should be taken on a case-by-case basis, many of the planned public works projects in Joplin as a result of the tornado will likely be deemed “construction” projects rather than “maintenance” projects, in which case prevailing wages must be paid. Public entities, contractors and subcontractors should make sure that they are following all rules and regulations concerning prevailing wage projects long before the bidding phase of the project in order to avoid surprises during construction.
Attorney Richard B. Maltby is an associate with Carnahan, Evans, Cantwell & Brown PC in Springfield and a member of the firm’s litigation practice group. He may be reached at rmaltby@cecb.com.[[In-content Ad]]
