KY lawmakers repeal prevailing wage law

Dive Brief:

  • The Kentucky Senate passed a bill Saturday eliminating the state's prevailing wage requirement for state-funded projects, according to WHAS.
  • When Kentucky Gov. Matt Bevin signs the bill as expected, construction companies will set worker wage rates just as they do in the private sector.
  • The bill will go into effect immediately but will not affect federal projects, where the government will still determine hourly pay.

Dive Insight:

Critics of the new law said the quality of public building construction will suffer and that the families of Kentucky construction workers will pay a price. Supporters say it will save taxpayer money and add much-needed momentum to the state's construction program.

The Associated Builders and Contractors came out in full support of the measure, calling the state's prevailing wage law "wasteful." The ABC also called attention to another bill the Kentucky Legislature passed at the same time that keeps workers from being forced to join a labor union in order to secure or keep a job. Bevin is also expected to sign that into law as well, which would make Kentucky the 27th right-to-work state in the country. The anticipated repeal of the prevailing wage law would make the state the 21st not to have wage requirements for workers on public projects.

Issues like prevailing wage and right-to-work status affects how the ABC scores what it considers the business-friendly and "free enterprise" nature of states on its Merit Shop Scorecard. Other factors the organization takes into consideration when rating states are PLA mandates, public-private partnership (P3) legislation, job growth and commitment to workforce development and career education.

The ABC, however, is not the only industry group in favor of doing away with prevailing wages laws, which are part of the Davis-Bacon Act at the federal level. Critics say the rates are usually higher than contractors typically pay, which, along with the additional paperwork, creates an undue burden on employers. Advocates of prevailing wage argue that it keeps contractors from chipping away at pay rates when they're trying to save money.

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Filed Under: Legal/Regulation