April Blog post
HB 104 – Prevailing Wage Repeal In Progress
WILL PREVAILING WAGE CONTINUE TO PREVAIL IN MISSOURI?
As Missouri public school districts are aware, the Missouri Prevailing Wage Law (located at RSMo. 290.210-290.340) (the “Act”) applies to construction projects and generally requires that workers employed by or on behalf of a public body for the “construction of public works, exclusive of maintenance work” be paid the prevailing hourly rate applicable to the county in which the public body is located. The requirements are applicable regardless of the dollar amount of the public works project, and the statute is subject to enforcement by the Missouri Department of Labor and Industrial Relations as well as aggrieved workers. And public bodies include any political subdivision of the state as well as any institution supported in whole or in part by public funds.
So, a project that involves a “construction of public works” by a public body is subject to the prevailing wage requirements imposed by the Act. What does this mean for public entities? Missouri authorities have traditionally interpreted the Act as having extremely broad applicability. For example, “construction” is defined to include any improvement, enlargement, alteration, painting, decorating or major repair. The Missouri Attorney General has opined that “by expressly including ‘painting and decorating’ and ‘major repair’ within the statutory definition of ‘construction’…[I]t is apparent that the legislature intended to enlarge the meaning of the word ‘construction’ so as to include more than is normally comprised within ordinary meaning of the word.” Opinion of the Attorney General No. 32-70, Marshall 10-20-70. And in Utility Service Co. v. Missouri Department of Labor and Industrial Relation, 331 S.W.3d 654 (Mo. 2011), the Missouri Supreme Court held that a contract for the maintenance of a water tank that included for complete repainting of the tank as needed, as well as all specialized services including engineering and inspection services needed to maintain and repair the tank and tower, such as steel replacement, steel parts, and other components would be considered “construction” subject to prevailing wage requirements under the Act.
However, the Republican controlled legislature has taken a significant step toward putting the state of a Missouri on a different path, following in the footsteps of other states such as Kentucky and Indiana. On March 30, 2017, by a vote of 89-60, the Missouri House of Representatives approved HB 104 and sent it on the Senate for the Senate’s first read. If also passed by the Senate and signed in to law by Governor Eric Greitens, HB 104 will completely repeal the Act, so that prevailing wage requirements no longer apply to public works in Missouri (provided the project is not being funded by federal dollars, as the federal prevailing wage requirements imposed by the Davis-Bacon law are still in effect). Governor Greitens has already signaled his willingness to sign such legislation in his first State of the State address, in which he said: “We must repeal our state’s version of the Davis-Bacon act, which drives up the cost of important construction work that needs to get done. It hurts rural workers. It sets back rural families.”
As a result, Missouri public entities entering public works contracts may no longer have to require their contractors to pay prevailing wages. Stay tuned to this space for further updates.