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PA Chamber members urge prevailing wage reform
Commonsense measures would lighten burden on local governments, taxpayers
PA Chamber members support the enactment of legislation that
would lessen the adverse impact of prevailing wage mandates in the Commonwealth.
Since its enactment 50 years ago, Pennsylvania’s Prevailing Wage Act has
burdened local governments and taxpayers by requiring at least a local prevailing
minimum wage payment to workers on public construction projects costing more
than $25,000.
The PA Chamber opposes mandated wage laws because they force
employers to pay workers in excess of what they might voluntarily accept;
impose extensive paperwork and significant costs on employers; and generally
hinder job creation and economic growth. Additional negative effects of the prevailing
wage law are numerous: projects have often been delayed or stopped altogether;
their cost may be inflated by as much as 30 percent; and any perceived economic
benefits are lost as a result.
In the decades since the law’s enactment, jobs subject to
prevailing wage have never been fully defined and the threshold for the cost of
the projects has never been raised. As a result, prevailing wage projects now
encompass nearly every public construction undertaking in the Commonwealth. Add
to that the recent economic downturn and overburdened taxpayers and local
governments can no longer afford the costs associated with the current
prevailing wage law.
Short of a full repeal, PA Chamber members have long supported
efforts to reform the law, and are urging action on two bills currently under
consideration in the House Labor and Industry Committee.
In a memo
sent to lawmakers prior to a recent committee public hearing on the measures, the
PA Chamber expressed support for the legislation:
H.B.
1367 would streamline the process
for setting the prevailing wage rate by requiring that it be based on data
already compiled by the Department of Labor and Industry’s Center for Workforce
Information and Analysis. This commonsense measure would bring some rationality
to the process by which prevailing wage rates are determined so that pay is
actually commensurate with the local rate.
H.B.
1685 proposes updates to the Prevailing Wage Act’s language that would
further define jobs that are subject to prevailing wage, and adopt classifications.
This long overdue change would provide relief to employers who currently have no
guidelines to follow and face harsh penalties for violations.
The high costs to employers, unclear language in the
existing law and the inability of local taxpayers to absorb project costs are
all reasons to implement the proposed Prevailing Wage Act reforms once and for
all.
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Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of Business.
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